Department of Veterans Affairs 

Collaboration Opportunities with 

affiliated medical institutions AND 

the DOD

Hearing

before the

Committee on 

Veterans’ Affairs

House of Representatives

one hundred ninth congress

second session

March 8, 2006

Printed for the use of the Committee on Veterans’ Affairs

Serial No. 109-37

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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 8, 2006

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Department of Veterans Affairs Collaboration Opportunities 

With Affiliated Medical Institutions and the DOD ...............

OPENING STATEMENTS

Hon. Steve Buyer, Chairman ....................................................

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

Prepared statement of Mr. Brown ............................................

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

Hon. Jeff Miller ..........................................................................

Hon. Sylvestre Reyes ................................................................

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

Prepared statement of Ms. Brown ...........................................

STATEMENTS FOR THE RECORD

Hon. Lane Evans, Ranking Member ........................................

Hon. Tom Udall .........................................................................

Wiblemo, Cathleen, Deputy Director, Veterans Affairs and 

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

Paralyzed Veterans of America .................................................

Witnesses

Perlin, Jonathan B., M.D., Ph.D., MSHA, FACP, Under Secretary for Health, Department of Veterans Affairs ...............

Prepared statement of Dr. Perlin .............................................

Winkenwerder, William, Jr., M.D., MBA, Assistant Secretary

of Defense for Health Affairs .................................................

Prepared statement of Dr. Winkenwerder ...............................

Greenberg, Raymund S., M.D., Ph.D., President, Medical 

 University of South Carolina .................................................

Prepared statement of Dr. Greenberg ......................................

Moreland, Michael, Director, VA Pittsburg Healthcare System

 Department of Veterans Affairs ............................................

Prepared statement of Mr. Moreland .......................................

(III)
Smithburg, Donald R., Executive Vice President, Louisiana

State University System, CEO, Healthcare Services Division .........................................................................................

Prepared statement of Mr. Smithburg .....................................

INFORMATION FOR THE RECORD

Department of Veterans Affairs Report to Congress on Plans

for Re-establishing a VA Medical Center in New Orleans ..

POST-HEARING QUESTIONS FOR THE RECORD

Questions for the Department of Veterans Affairs .................

 

(IV)

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(1)

Department of Veterans Affairs

Collaboration Opportunities with affiliated

medical institutions AND the DOD

Wednesday, March 8, 2006

U.S. House of Representatives, 

Committee on Veterans’ Affairs,

Washington, D.C.

The Committee met, pursuant to call, at 2:00 p.m., in Room 334, 

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

Committee] presiding.

Present: Representatives Buyer, Baker, Brown of South Carolina, 

Miller, Campbell, Michaud, Reyes, Brown of Florida, Udall, Berkley, 

and Boozman.

The Chairman. The House Committee on Veterans’ Affairs, Full 

Committee, will come to order March 8, 2006. We are here today to 

learn more about the promise and progress of collaboration in the 

provision of healthcare.

 I would like to thank all of our panelists today for their testimony, 

and we especially welcome the Assistant Secretary of Defense, Dr. 

Winkenwerder, who I believe is making his first visit to the Committee in this second session.

We appreciate your presence, and Dr. Greenberg, Mr. Moreland, 

and Mr. Smithburg, who are also on the next panel and who travelled 

to Washington, so we can learn more on a topic that grows more important by the minute and one that holds great promise for the future 

of VA and perhaps your own institutions.

Dr. Perlin, as always, you have become a favorite face when it comes 

to the topic of the healing arts, and to Mr. McClain, my respect for 

you continues to grow and we appreciate your presence here today. I 

want to thank you for your role in the Gulf Coast Planning Group and 

your leadership with regard to the “Charleston Model.” It is kind of 

interesting that this is what everybody seems to be calling it, Dr. Perlin, the Charleston Model. And both of you are to be congratulated 

for your work with the Medical University of South Carolina.

I look forward to hearing about your experience today, especially 

with regard to the Gulf Coast Planning Group and the Charleston 
2

Model.

The complexity of medicine today is unprecedented, so it is very 

expensive and so is the expectation among Americans that when 

they need medical care, it will be there for them. This has become 

a reasonable expectation among Americans, an expectation that in 

practice is usually fulfilled, and that is a profound blessing of our 

economic, technological and cultural progress. We cannot permit this 

progress to lapse.

Along with the complexity and escalating costs, the very nature of 

healthcare delivery has been revolutionized in the last 15 or 20 years. 

The rise of outpatient medicine and the fruits of preventative care 

have rendered much of our inpatient facilities perhaps obsolete.

As we look to expand VA’s outpatient capabilities, we also look to 

enhance and modernize its inpatient care. Conceivably it is the more 

critical of the two, for it is the most acutely ill patients who are admitted to the hospital.

I believe that the idea of collaboration, whether it is the collaboration between government agencies or between the public and state 

entities, promises significant efficiencies as we move down this next 

stretch in the path of the 21st Century health system.

Of course, sharing is not a new concept. With its affiliations among 

the nation’s teaching universities, the VA has been sharing human 

capital for years. Half of the doctors in America were trained at some 

point in VA hospitals.

In Charleston, South Carolina, some 90 percent of the doctors at 

the Medical University of South Carolina also practice medicine at 

the Ralph Johnson VA Medical Center, just a stone’s throw away.

VA and DoD began sharing resources in 1982, with the passage 

of a law that directed them to pool resources, increase efficiencies 

and reduce redundancies. In a sign of progress, the 2002 agreement 

between the Navy and the VA to share facilities in North Chicago is 

much closer to being fulfilled. Collaboration with the military helps 

perfect the seamless transition of servicemen into the VA and back 

again to active duty or back to the civilian world. 

Collaboration with medical universities is a logical next step from 

shared personnel to shared facilities. This benefits veterans in the 

country with better access and enhances the quality of care. It is our 

goal that this may be perfected.

If we can do this and at the same time, save money, increase the 

life cycle of these facilities and increase the quality of care, it is a 

win/win situation for the Federal Government and the States. And 

we are building from the win/win situation that we have with regard 

to VA and DoD facilities.

So the challenge, as we know, is not determining if this is feasible 

or a worthwhile concept, it is determining where an already proven 

concept can next be applied and how best we can apply it to achieve 
3

greater efficiencies, better quality of care, improved access to care 

and still retain the identity of VA’s healthcare system.

 I will hazard a guess that the testimony submitted today from the 

veteran service organizations will urge us to ensure that in any collaborative undertaking, the VA retains managerial control and ensures the veterans are seen in a uniquely “veterans’ environment.” 

Those are appropriate concerns, and I think they are also manageable concerns.

The high expectations among those whom we serve, be they Dr. 

Perlin’s veterans or Dr. Greenberg’s patients, are established, will 

grow and must be met with state-of-the-art service and must be provided on a sustainable basis.

I believe that taking advantage of the leverage of local healthcare 

economies through strategic collaborative partnership is one powerful approach to accomplishing a mutual goal.

I ask unanimous consent that a statement by the Ranking Member 

Lane Evans be submitted for the record. Hearing no objections, so 

ordered.

[The statement of Lane Evans appears on p. 55]

The Chairman. If any member would like to have an opening statement, I will yield. I recognize Chairman Brown for an opening statement.

Mr. Brown of South Carolina. Thank you, Mr. Chairman. As you 

know, the Committee has expended a great deal of effort over several 

years to ensure the VA considers all alternatives when contemplating 

new facilities in delivery of healthcare.

I am excited about today’s hearing as it will allow us a good opportunity to hear from department affiliated organizations and the 

Department of Defense on the progress that has been made across 

the country.

Mr. Chairman, I am especially pleased that Charleston is well represented here today by my friend, Dr. Ray Greenberg, President of 

the Medical University of South Carolina. I would like to welcome 

him back to our nation’s capital and to this hearing today. While it 

is always good to see friends, I am especially interested in sharing information with our colleagues regarding the collaborative model that 

has been successfully developed in Charleston between the VA and 

the Medical University. I am equally interested in completing the 

model’s development and exporting it to other areas of the country 

where similar collaborative efforts may be appropriate, not the least 

which may be New Orleans. While this model has already served the 

VA well, I expect that over time the department will find increasing 

utility in it. To that end, I look forward to engaging Mr. Smithburg 

from Louisiana State University during the second panel in order to 

get a clearer picture of what a collaborative facility may look like in 
4

the Gulf Coast region. I appreciate him joining us today and I hope 

that the work we have done in Charleston helps to fuel his efforts in 

Louisiana.

 In a similar vein, I am thrilled to have Dr. Winkenwerder with us 

here today to speak to some of the collaborative opportunities that 

have been undertaken by the VA and the Department of Defense. 

Like the Charleston Model, I’m interested in finding out what types 

of models may help fuel additional collaboration between the departments, whether it’s North Chicago or Las Vegas or something in between.

In my mind, and I think you share this view, Mr. Chairman, collaboration is becoming increasingly essential in delivering healthcare 

across the nation. So long as we remain true to the distinct identity 

of the VA, and so long as we ensure the continuing quality associated 

with VA care, we should embrace opportunities to maximize local 

health rated economists.

Now the Charleston experience has taught us a lot. We can improve the quality of care delivered, the efficiency of the care delivered 

and we can accomplish it without dramatically increasing the life 

cycle cost of the new facility.

Again, Mr. Chairman, I appreciate your leadership in this area, 

and I stand ready to assist you in leveraging our work in Charleston 

against future collaborations around the country. And I yield back 

the balance of my time.

The Chairman. Thank you. Mr. Michaud.

Mr. Michaud. Thank you, Mr. Chairman. I also would like to 

thank Chairman Brown for his hospitality when he went to Charleston to look at the collaborative effort as well as Chairman Buyer. Mr. 

Chairman, since we have Dr. Perlin and Dr. Winkenwerder with us 

today, I would like to actually -- they don’t need to respond -- but I 

would like to ask them, use my time for opening statement to request 

some important data that you could aid the Committee as it works 

to provide appropriate mental health services to returning OIF and 

OEF veterans which actually could help us if there might be a potential to look at other collaborative efforts as we deal with the mental 

health issue.

 And, Dr. Perlin, if you would provide the Committee with OIF and 

OEF healthcare utilization data generated by your office for public 

health in environmental hazard, that would be helpful.

 And, Dr. Winkenwerder, would you please provide the Committee 

with an analysis of the outcomes of DoD health reassessment surveys of OIF and OEF veterans particularly pertaining to their mental 

health concerns. And I do want to thank both panels, members, for -- 

or panelists -- for coming today. Looking forward to your testimony.

And, Mr. Chairman, as we receive the information from both doctors, particularly in light of the recent Army study which shows one in 
5

three veterans have sought veterans mental health services, I think 

it is important that probably the Full Committee have a hearing on 

this and see if there are ways that we can look at making sure that 

the services for returning veterans or troops meet their needs and 

the two agencies are able to respond to the needs of men and women 

returning home. So I think it would be important if we could have a 

hearing on that and also to see if there are ways that we might be able 

to assist in collaborative effort, you know, in this particular area.

 So, with that, I want to thank you, Mr. Chairman, for having this 

hearing and will yield back the balance of my time.

The Chairman. I appreciate the gentleman’s contribution. Chairman Miller, you are now recognized.

Mr. Miller. Thank you, Mr. Chairman. We have all seen some of 

the benefits of collaboration in our country. And in the time when the 

need for more efficient spending could not be more evident, it is refreshing to see opportunities for our nation’s citizens to get the most 

for their tax dollars.

As we find the healthcare needs of our nation’s veterans changing 

every day, it is imperative that we in Congress work with the Department of Veterans’ Affairs to ensure delivery of the new healthcare 

needs. And collaboration with medical institutions as well as the 

Department of Defense are two of the best ways of going about this.

Equally important is providing access where veterans need it most. 

Our nation is a constantly changing landscape, and so VA must maintain a sense of flexibility in anticipation as demographics shift. That 

is certainly no easy task, but it is still an aspect of the VA’s mission 

to serve those who bravely have served this country.

 I would like to thank all who are testifying before us today as they 

outline ways to better accomplish this mission. But I would also like 

to emphasize that collaboration should not be forced. The collaborative conditions need to occur where we know the veterans are, where 

we know more veterans will be coming.

You all know that my district in Northwest Florida is home to one 

of the largest veteran populations in the nation, as well as home to 

five military installations. Some of these installations will become 

dramatically larger over the next few years as a result of the 2005 

BRAC process.

Already in an area specified in CARES as an under-served market, 

anyone can now see that Northwest Florida is going to become even 

more under served. The growth rate of the veterans’ population was 

strong long before CARES came out, and long before BRAC, and it 

is my hope that VA will continue to focus on an efficient delivery of 

needed healthcare by looking at the future as well as the present. 

Yield back.

The Chairman. Mr. Reyes, you are now recognized.

Mr. Reyes. Thank you, Mr. Chairman. I would like to join you in 
6

welcoming our guests here today on the three panels, but I would like 

to associate myself with the comments of my colleague, Mr. Miller, 

from Florida, because my area, my region, like his, will be seeing 

some substantial growth under the decisions of BRAC, and so I would 

hope that we are able to work as additional troops come in with both 

the VA and the Department of Defense to do as much as we can to 

facilitate both active duty and the veteran population.

 My region has about between 70 and 80,000 veterans, and we have 

one of the projects -- in fact, we just celebrated the tenth anniversary 

of the partnership -- for me it is not a collaborative effort -- is it a 

partnership between the VA and William Beaumont Hospital. And 

while I will have some questions when it is appropriate, Mr. Chairman, I understand that some Committee staff during the last break 

went to El Paso to look at the VA Beaumont relationship, and I was 

wondering, Mr. Chairman, would it be possible to better coordinate 

that with the member from the area, because -- and the reason I ask 

you is because as you know I have requested a field hearing for the El 

Paso area for my district again because of the large population of veterans in the region. And it would have been helpful for me to know 

that they were coming because I would have had the opportunity to 

show them a little bit more than just that relationship between the 

VA and Beaumont, so if we can do a little better job of coordinating, I 

would appreciate that in the -- 

The Chairman. Mr. Reyes, that is unfortunate. It was Committee 

travel of the O&I Subcommittee of which you are a member, and the 

minority was invited to participate in that trip by staff and declined.

We will improve the direct relationship with the member office and 

that should not occur.

Mr. Reyes. Okay. And I only mention it because of that pending 

request that I have. But I appreciate the opportunity to make those 

observations in terms of the expected -- 

The Chairman. Mr. Reyes, please recognize, though, the O&I Subcommittee, of the years that I participated, was a very good Subcommittee and you know this is a very good Subcommittee.

Mr. Reyes. Yes.

The Chairman. And that staff from both sides try to cover the waterfront, and so majority might be going this way, and the minority 

is going that way, and they do talk to each other. But with regard to 

going to a Member’s district, they should let you know.

Mr. Reyes. Yeah.

The Chairman. I apologize for that.

Mr. Reyes. Oh, no. Well, and I wasn’t seeking an apology. I just 

hope that we can maximize those trips because it is a big country and 

there are a lot of issues all over the place and it is a good opportunity 

that we would have to show them some more -- 

The Chairman. Well, it is a great facility.
7

Mr. Reyes. Yes.

The Chairman. Even when I was on the Armed Services Committee, I -- 

Mr. Reyes. Absolutely.

The Chairman. When I was in charge of personnel in the health 

delivery system, Secretary Winkenwerder, I went to that facility at 

El Paso. They do a great job, and they were one of the early facilities, 

early on. But thank you very much.

Mr. Reyes. We are very proud of it, and thank you, Mr. Chairman.

The Chairman. Thank you.

Ms. Brown of Florida. Thank you very much, Mr. Chairman. I 

certainly want to thank the Under Secretary and the other members 

of the VA staff for being here today to present their testimony.

In Mr. Perlin’s testimony, he touches on an issue of great importance to veterans. The need to improve access to healthcare via collaborative efforts. I am not sure -- and maybe you could elaborate on 

this in your testimony if this concept has been picked up any other 

place, and that is certainly whether it is Ms. Berkley’s area or Mr. 

Miller’s area or Mr. Reyes’ area, where there is growing population 

and more and more veterans moving in, if any of the developers have 

said we will build a clinic if you will staff it.

We did that in the villages and I would just like to know if you are 

taking this concept anyplace else. While it is not direct collaborative 

healthcare -- it provides everything you need except for the equipment and the staffing and as, you know, bricks and mortar are expensive and if you can work with various developers, it seems to me as if 

it is a win/win situation of having the developer donate the land, put 

up the building and have greater access to veterans’ clinic facilities.

 As you know, we are not building the mass of Hospitals that we 

once did. Long before I was here, we went to the community-based 

outpatient clinic which really provides quicker, less expensive care 

than in a hospital setting. So I would just encourage the VA to pursue this in other growing veteran areas because it really is a win/win 

situation.

I thank you very much, Mr. Chairman, and I look forward to hearing their testimony.

The Chairman. Thank you. Mr. Udall, you are recognized.

Mr. Udall. Thank you, Mr. Chairman, and rather than giving 

an opening statement, I would like to, Mr. Chairman, just offer my 

opening statement for the record, and then just a couple of comments 

about collaboration in the Louisiana, New Orleans context.

It seems to me that the briefings that we have received from Members of the House that have been down there on co-dels, the opportunity to talk with Members of Congress who represent this area, they 

are in a very dire, dire situation down there, and anything that you 
8

can do in terms of working with other institutions and other medical 

centers in trying to provide the care, I think is something that is very 

welcome.

 So I want to thank you for that, and we will also be visiting with 

you in the question section, and I am just introducing my statement 

for the record. Mr. Chairman, thank you.

The Chairman. Hearing no objection, your written statement will 

be submitted for the record.

[The statement of Mr. Udall appears on p. 57]

The Chairman. Ms. Berkley, you are now recognized.

Ms. Berkley. Thank you, Mr. Chairman. I was at another hearing 

when my staff notified me that Las Vegas was mentioned in my colleague, Mr. Brown’s statement, and I felt the need to come here and 

clarify some things.

As you know, and I have said this on the record many times, Southern Nevada has one of the fastest growing veterans populations in 

the country. Currently Southern Nevada is struggling, and I mean 

struggling, to meet the needs of the population growth which has 

been compounded by the evacuation of the Addeliar D III Guy Ambulatory Care Clinic, outpatient clinic, and its replacement with ten 

clinics scattered across the Las Vegas Valley.

My veterans also seek care at the Michael O’Callaghan Veterans 

Hospital at Nellis Air Force Base where the Chairman was kind 

enough to spend a day with me, seeing exactly what the critical situation is at the VA.

I must state for the record that while in some communities shared 

facilities between the DoD and the VA work well or may work well, 

it is not a one-size-fits-all solution for all of us. Las Vegas has had 

shared facilities. It does not work for communities that are growing 

the way Las Vegas is.

Nellis Air Force Base wants its own facility. They need their own 

hospital. They have got a very active Air Force base, one of the primary Air Force bases in the country. Every bed is filled all the time 

and we are on divert. The only problem is that every other hospital 

in Las Vegas is currently on divert.

 So we -- while I understand that in perhaps South Carolina the 

shared facilities work very well, they would not work well in Las Vegas, and we are looking forward to our full-service medical complex 

with an exclusive VA hospital, outpatient clinic and long-term care 

facility, and it cannot come soon enough for the veterans that live 

in my community. We are in a critical situation in Las Vegas and 

shared facilities don’t work. 

The Chairman. As well.

Ms. Berkley. At all.

The Chairman. At all. No, I don’t believe that -- you can’t say 
9

that.

Ms. Berkley. Well, in my community, I think it is -- I think it was 

demonstrated.

The Chairman. I have been there with you, and it was great, 

and -- 

Ms. Berkley. I think you shared our pain on that day.

The Chairman. All right. Let me now, before we begin, extend a 

welcome to our new Committee member, Mr. John Campbell of California. John Campbell took over the district of the former member 

Chris Cox, when he went over to become the Chairman of the Securities and Exchange Commission.

John Campbell brings to the Committee a strong business background. He received a bachelor’s degree in economics from UCLA 

and has a master’s degree in public taxation from UCS. Prior to his 

public service, he was employed as a CPA at the firm of Ernst & 

Young, and he was the CEO and president of Campbell Automotive 

Group, which included Saturn of Orange County and Saab of Orange 

County.

His public service includes serving in the State House as a California State Assemblyman and as a California State Senator. Mr. 

Campbell resides in Orange County, California, and he has one wife 

and two sons.

[Laughter.]

The Chairman. Is that what it says? That makes you a conservative in the State of California.

[Laughter.]

The Chairman. I can’t help myself. I apologize. We welcome the 

gentleman to the Committee.

 Now we will turn to our panel, and let us see, who do we give deference to, DoD or VA; gentlemen, you decide. Dr. Perlin.

STATEMENTS OF JONATHAN B. PERLIN, M.D., Ph.D., MSHA,

 FACP, UNDER SECRETARY FOR HEALTH, DEPARTMENT

OF VETERANS AFFAIRS; ACCOMPANIED BY TIM S. McCLAIN, GENERAL COUNSEL, DEPARTMENT OF VETERANS

AFFAIRS; AND WILLIAM WINKENWERDER, JR., M.D., 

 M.B.A., ASSISTANT SECRETARY OF DEFENSE OF HEALTH

AFFAIRS, DEPARTMENT OF DEFENSE; ACCOMPANIED BY 

JOHN L. KOKULIS, DEPUTY ASSISTANT SECRETARY OF

 DEFENSE FOR HEALTH BUDGETS AND FINANCIAL POLICY, DEPARTMENT OF DEFENSE
10

STATEMENT OF JONATHAN B. PERLIN

Dr. Perlin. Well, thank you, Mr. Chairman. Members of the Committee, good afternoon. I ask for our full statement to be submitted 

for the record.

The Chairman. Your statement will be received. Hearing no objection, so ordered.

Dr. Perlin. Thank you. Veterans’ Health Administration understands the benefits of collaboration for VA, for veterans and for the 

American taxpayer. We are proud of our expanding partnership with 

the Department of Defense, and I would like to personally acknowledge and thank Dr. Bill Winkenwerder for his leadership in that regard.

We are in the process of creating new and fruitful partnerships 

with other healthcare providing as well, especially our critical and 

very valued medical school affiliates.

Let me begin by discussing our work with the Department of Defense. As you know, there have already been a number of successful examples of VA/DoD sharing, and perhaps the most far reaching 

and ambitious is Chicago, where the partnership between our North 

Chicago VA Medical Center and Naval Hospital of Great Lakes will 

result in a joint federal facility.

 Six working groups are now addressing human relations, information technology, leadership, finance, budget and clinical and administrative management issue. In Alaska, the Anchorage VA Outpatient 

Clinic and the Elmendorf Air Force Base have a long-standing joint 

venture to serve veterans and DoD beneficiaries.

Anchorage and Elmendorf are also looking for new areas to collaborate and are currently the site of a budget and financial management 

demonstration project. In addition, the VA is opening a new outpatient clinic in 2008, next to the Elmendorf Hospital.

In El Paso, VA has an outpatient clinic, co-located the at Beaumont 

Army Medical center, as Mr. Reyes alluded, and that is a very successful partnership. Beaumont provides inpatient services to VA patients as well as Department of Defense beneficiaries in two facilities 

which really pioneers an implementation of medical record sharing 

between our two systems, as we work through the total joint interoperability or our electronic health records.

 I would note in passing that is the site of one of the pilots in the Bidirectional Health Information Exchange, which I am proud to report 

won an excellence dot gov award for departmental data sharing from 

the American Council for Technology.

Our agencies, working together, is serving as a model for our nation to demonstrate how the President’s goals and Executive Order to 

make electronic health records available to most Americans by 2014, 
11

can be met. And I am honored to serve with Dr. Winkenwerder as 

a commissioner on the American Health Information Community, 

which is composed of eight private and public sector healthcare leaders.

In Charleston, VA and DoD are constructing a $40 million consolidated medical clinic at Goose Creek in Berkeley County. VA’s portion 

is funded through our minor construction program. By joining forces, 

VA and DoD have removed their need for separate ancillary and support services and construction will start this fiscal year, anticipated 

to wrap up in the Fall of 2008.

VA is pursuing collaborations with other healthcare providers, and 

recently we, and the Medical University of South Carolina, conducted a joint review to identify options for collaboration and sharing in 

Charleston.

The structure used for that review provided useful information 

that enabled us to identify viable sharing opportunities. The process 

consisted of a steering group with representation of national and local VA leaders and USC leadership and leadership from the Department of Defense.

They reviewed data, including quality indicators of population statistics, care volumes and costs.

 Mr. Chairman, let me take this opportunity to thank you and 

Chairman Brown, the Chair of the Health Subcommittee, for your 

leadership in support of this endeavor. I would also like to thank Dr. 

Ray Greenberg, the president of MUSC, for his exceptional work and 

collaborative attitude which has greatly contributed to a successful 

outcome.

An underlying process critical to the steering group’s success was 

the use of the cost effectiveness analysis. This provided insight into 

both estimating initial capital costs and the potential savings and life 

cycle operational costs. The group identifies some short-term options 

for resource sharing that have already been initiated. I have asked 

Mr. Moreland to provide you with an update on the status of that 

activity in his remarks.

The model functioned so well in Charleston that I recently charged 

the group to conduct a similar review in New Orleans, where the 

tragedy Hurricane Katrina brought, made restoring in patient services an urgent priority. It offered us an unusual opportunity for new 

collaboration.

This group will study collaborative opportunities between the New 

Orleans VA Medical Center and Louisiana State University. I was 

honored to sign a memorandum of agreement with LSU two weeks 

ago to evaluate possibilities to realize efficiencies through partnership.

VA’s strong partner in this effort, Mr. Don Smithburg, executive 

vice president of LSU and CEO of their healthcare services division, 
12

provided outstanding support and leadership, and he and I look forward to sharing the group’s finding with you later this year.

Mr. Chairman, VA will continue to look for opportunities to leverage our abilities to improve our ability to provide world-class care 

to enroll veterans. Thank you for this opportunity to describe our 

progress to you.

The Chairman. Thank you. Secretary Winkenwerder.

[The statement of Jonathan Perlin appears on p. 58]

STATEMENT OF WILLIAM WINKENWERDER, JR.

Dr. Winkenwerder. Thank you, Mr. Chairman. I appreciate the 

chance to be here today and a chance to testify together with Dr. 

Perlin. Let me also thank you for your leadership and for the other 

members of the Committee for your interest and coaxing, persuading, 

cajoling, the VA and DoD to continue to work thing. I think we have 

established a good track record and I very much would like to see that 

continue.

Having submitted our VA/DoD Joint Executive Council Annual Report for Fiscal Year 2005, the accomplishments of the past year are 

fresh in our minds. We continuously explore new avenues of partnership with the VA through our Executive Council, the VA, DoD Executive Council, and the associated work groups.

And just for everyone’s benefit, this involves a meeting of Dr. Perlin 

and myself and our staffs. We meet approximately every two or three 

months, and it really is an excellent formal structure and a great vehicle for both departments to jointly address issues, set priorities and 

strategic goals, as well as to monitor the implementation of these priorities and to ensure that people are accountable for executing what 

we’re asking them to do.

As a companion to the annual report, the VA/DoD Joint Strategic Plan for 2006 through 2008, was just published. This is a roadmap that was recently reviewed and updated to incorporate lessons 

learned as well as to set more concrete milestones and performance 

measures.

Resource sharing is a vital component of both organizations’ healthcare delivery systems. At the end of Fiscal Year 2005, VA and DoD 

had 446 sharing agreements, covering nearly 2,300 services, and 136 

VA medical centers reported reimbursable earnings during the year 

as TRICARE Network providers. This is an increase of 59 percent 

over the previous year.

My written testimony provides the details on a number of joint 

facilities with regard to collaboration to improve access to care and 

John has covered those well. I will say that I am in total agreement 

that a great model for resource sharing is the first federal healthcare 

facility, with a single management structure.
13

In October, I joined John and Deputy Secretary Mansfield and attended a ceremony in Chicago to mark the creation of this innovative 

initiative. The North Chicago Veterans’ Affairs Medical Center and 

Naval Hospital, Great Lakes, are going to integrate all clinical and 

administrative services under one line of authority.

 This is a new venture. It is a new way of doing business, but we absolutely believe in it, and we believe that it takes constant oversight 

to make sure that the people on the ground get the job done.

 Another example, and I agree with Dr. Perlin, is the opportunity 

for the Keesler Air Force Base, VA, Biloxi, campus area with the fact 

that our healthcare facilities in the area received damage and there’s 

an issue there with respect to how to go forward.

DoD and VA have established a joint task force to explore the potential for a joint venture medical center. This task force has identified several options for a significant partnering. We are committed to 

moving forward within the next several weeks with the best design 

for the beneficiaries of the region and for taxpayers.

DoD and Navy are also collaborating to finish the DoD/VA Joint 

Ambulatory Care Center in Pensacola. This project represents one 

of the largest joint collaborations to date and was made possible by a 

land-use agreement that grew from the VA capital asset realignment 

for enhanced -- or services or CARES decision to expand services in 

the Florida panhandle.

The facility is currently under construction with a completion expected in January 2008.

Another important collaboration is planned in South Carolina. As 

many of you may know, the 1993 base realignment and closure BRAC 

action significantly decreased the work load for the 500-bed naval 

hospital in Charleston. Currently, this military treatment facility is 

a hospital in name only. Inpatient services are performed at a nearby 

civilian hospital.

But what we now have underway is a 35 million Fiscal Year 2006 

construction project that includes approximately 164,000 gross square 

feet of clinical space. The 4.4 million, that VA portion was funded 

with, with their minor construction program, includes approximately 

18,000 gross square feet. By joining forces, VA and DoD have removed the need for a separate ancillary and support spaces.

 Mr. Chairman, again, thank you for the opportunity to speak with 

you today. DoD is committed to continued collaboration with the 

VA.

There are some other things that just in the interest of time, I will 

not touch on, but I do want to mention in the area of health information, the fact that we are now really picking up speed with respect to 

moving clinical information, health information, on separated service 

members to the VA, and we have moved 3.1 million information on 

3.1 million, unique patients to the VA electronically.
14

 We are now moving pre and post employment health assessment 

information and nearly half a million of those assessments have been 

moved electronically. And, again, I endorse John’s comments and 

the Commission. We are really being looked upon as leaders in this 

whole area of developing electronic, since we both have electronic 

health records, as to how to share that information and to do in a 

seamless and interoperable way.

 We have got really smart people working on this. They are up to 

the task, and so we are excited about that. With that, I will conclude 

my remarks and look forward to any questions.

[The statement of William Winkenwerder appears on p. 63]

The Chairman. Let me pick up right where you just left off on IT. 

We have some ways to go. Our staff had returned from Tampa at 

the Polytrauma Center where they were pleased to see you have the 

seamless transition of the electronic medical record. That is our goal. 

It is going to take us some time to get that throughout the system. 

Dr. Perlin, Chairman Walsh and I met with the Secretary this 

morning. I want to thank you for your leadership on the IT. I know 

you are being responsive to those in the field, are given tremendous 

push back, and the Secretary was very complimentary towards you 

and wanted me to appreciate what a difficult position those in the 

field are also putting you in. He also wants me to trust you to do that 

which is right.

I trust you to do that which is right, because I know you are coming 

my way. You are coming the Committee’s way. And so he told me 

that you are all going to go off and you are going to do your two-day 

-- I don’t want what you want to call it -- summit or whatever you 

are going to call this -- but the Senior Leadership Council is going to 

sit down and you are going to work this thing through and make the 

right judgments, and I believe that is going to happen.

 We don’t have to pound this anymore. You know the desires of this 

Committee, and but we have got to see it through. There is a cultural 

thing. We have to get through this barrier so we can begin to work on 

these relationships between two major departments of government.

So, I am a good listener to the Secretary, and he was very complimentary towards you, along with our CIO. And he does want to see 

the two of you go to dinner. Okay?

 Before I yield, I want to let the members know we are to have votes 

around the 3:15 to 3:30. We will push that to probably about 3:40. 

Secretary Winkenwerder, you have to leave about when?

Mr. Winkenwerder. Approximately 3:15 to 3:20.

The Chairman. All right. We will please try to accommodate the 

members as much as we can. I’ll tell you what. I will reserve my 

questions, because I can have a pretty quick access to both you gentlemen. Let me yield to Mr. Miller.
15

Mr. Miller. Thank you, Mr. Chairman. I have several questions 

for Dr. Perlin. If I can, and I am going to focus specifically on the 

report to reestablish a medical center in New Orleans.

Was Baton Rouge an expansion of the Baton Rouge CBOC considered instead of, again, I am going back to the issue of the veterans that evacuated and left and nobody can tell with certainty who 

is coming back. There is significant discussion about accelerating 

CBOCs in the outer region because of the increased need for medical 

care, but it seems to me if you are increasing the size of the CBOCs 

for the veterans that the assumption would be that they are going to 

stay; and, therefore, if you rebuild a medical center in New Orleans, 

you are overbuilding.

Or if you are sure that these veterans are going to go back to New 

Orleans, then you are overbuilding CBOCs. And I am trying to figure 

out which is it. And in the same question, if you could answer for me 

the question of what consideration was given to Baton Rouge in regards to expanding their sea bock and making it a larger facility?

Dr. Perlin. Thank you, Mr. Miller. Those are absolutely excellent 

questions. Let me just start by offering the comment that the Baton 

Rouge Clinic is actually operating beyond its capacity in addition to 

the expanded new CBOC that is there. We were able to obtain a lease 

on our old CBOC and they are operating both.

It is clear, just as you have indicated, that some veterans from New 

Orleans proper, from St. Bernard’s Parish, and Orleans Parish, have 

likely moved to the periphery of that area, and they are being supported.

I think what is so compelling about the New Orleans situation is 

whether or not those veterans actually returned to Orleans Parish 

and St. Bernard Parish, I think what the data reveal, is that there is 

need for a tertiary medical center in the region.

Your question of whether that should be located in New Orleans or 

Baton Rouge is also an excellent one as to what would have the greatest centrality to the population and where would the resources be in 

place to support the tertiary care needs.

 I think that it is fairly evident that there are longstanding and very 

effective relationships with Louisiana State University and Tulane 

University in terms of providing this sort of specialty expertise and 

subspecialty care that make that aspect fairly self-evident.

In terms of the centrality, I think that there is also a good history 

of referral patterns and catchment that shows that New Orleans is, 

in fact, a good and central location. So both on the geographical test 

and the resource test, it would meed the need and even absent the 

population being fully restored in the two major parishes, it would 

still meet the need in terms of population.

Mr. Miller. If there was never a New Orleans Medical Center, 

would you be putting one there today?
16

Dr. Perlin. I think again I come back to the issue that -- 

Mr. Miller. No. The question is if there was not a New Orleans 

Medical Center, would you build one there today?

Dr. Perlin. Yes, sir, we would.

Mr. Miller. Why?

Dr. Perlin. Because of the ability to affiliate and deliver efficiencies -- 

Mr. Miller. Would Tulane and LSU be there if the VA Medical 

Center had not been there?

Dr. Perlin. I would have to go back and research the history. I 

think they predated us, though. So the answer is yes they would.

Mr. Miller. You are sure?

Dr. Perlin. Our building is 50 years old. I believe that they are 

extant before us. But, Mr. Smithburg would be -- 

Mr. Miller. So we are doing this -- I am looking through the memorandums between LSU and VA, and I am looking for, you know, 

where the veteran gets the best, you know, deal without having to 

get in a car and drive, you know, an inordinate amount of time. And 

I am not seeing that. I am seeing a if we build it, maybe they will 

come back.

And, you know, I want you to convince me that the taxpayers of the 

United States of America should spend $600 million, which is what I 

understand is coming into the emergency supplemental, to rebuild a 

medical facility in a declining population.

Dr. Perlin. Your question is absolutely a fair and appropriate one, 

and in the central, southern market area, in fact, there are 377,000 

veterans in total. And while it is true that under any scenario, hurricane or not, there would be some decline.

There clearly is a population as well in that report. I am glad you 

have had a chance to look at it. You will see that there are a number 

of options, including not being actually close.

 Part of the rationale for both VA, and I believe for Louisiana State 

University, is the ability to share capital equipment and reduce significantly the capital investments. Share infrastructure, share staff, 

and actually get the taxpayers the best deal on location that you fairly ask is appropriately close and accessible for veterans.

Mr. Miller. And I looked in the report, and you talked about two 

independent towers, one for LSU, one for VA. The parking lot would 

be shared and all the administrative areas, and I understand that.

But we are talking about healthcare for veterans and where the 

veteran population is, and I find it difficult to understand why we 

are forcing the issue of going back in with 600 million -- the original 

request was 825 million -- but we are looking for 600 million now.

Thank goodness it appears that it will require authorization from 

this Committee to be done. But I have a long list of questions that I 

would like to submit for the record in regards to proof of the numbers 
17

that are being used to support what is being requested. And my time 

is out, and I yield back.

The Chairman. Chairman Miller, you may submit those questions 

for the record, and please also recognize that Chairman Brown has 

the responsibility for holding his Subcommittee hearing, along with 

Mr. Michaud on the construction. So you are right. We will take 

up these issues in further detail, but you have your right to ask any 

questions you like and you may probe. Sir?

Mr. Miller. May I respond?

The Chairman. Yes.

Mr. Miller. Given the way appropriations are done at this current time, in this Congress, it is nice to see that the appropriators 

recognize that we have a role as authorizers of the money to be spent. 

Ordinarily it would not happen that way. The appropriators would 

appropriate the funds without it ever coming before this Committee, 

and so I am saluting our Chairman for getting us back in the loop.

The Chairman. Thank you. Mr. Michaud.

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

the CARES decision identified 156 new CBOCs by 2012. VA has not 

funded the bulk of these CBOCs and it is related to some of the concerns that Mr. Miller has.

How will VA keep these CBOCs a priority while pursuing a collaborative effort with limited funds? Will the new collaboration mean 

that the efforts to open up the needed CBOCs will be delayed?

Dr. Perlin. Thank you, Mr. Michaud, for that question. I think 

just the opposite is apt to be true. If we can free up resources through 

some effective synergies that fundamentally serve veterans, and let 

me be very clear that we appreciate that the collaboration doing many 

great things, but ultimately our first responsibility is veterans. We 

are glad that all these sorts of collaborations will also serve others, 

but those synergies will allow us to operate more efficiently and provide resources for things such as CBOCs.

The other thing that I think is important in terms of the affiliations is that as healthcare moves from the hospital to the clinic, one 

of the sites for expansion of residency programs, an appropriate site 

for training, something that improves service to veterans, but also 

improves efficiency all around, is the collaborative opportunities for 

training experience as in those outpatient clinics as well.

Mr. Michaud. Thank you. Mr. Chairman, in essence of time, I request permission to submit the remaining questions in writing.

The Chairman. Yes.

Mr. Michaud. For the record. Yes, without objection. You have 

that right.

Mr. Michaud. Thank you.

The Chairman. Chairman Brown, you are now recognized.

Mr. Brown of South Carolina. Mr. Chairman, thank you. Dr. Per-
18

lin, overall, what lessons can be learned from the VA’s experiences 

with the joint venture proposal in Denver and in Charleston? And I 

know we had some differences in the collaboration there.

Dr. Perlin. Well, thank you, Chairman Brown. I know that your 

exceptionally familiar with the Charleston Model, and I think the 

fact that is now called the Charleston Model is really testament to it 

being both a documented process that captures the best of the experience.

 It really, I think, showed us how important it is to bring together 

leadership at the very beginning to be able to discuss what the particular needs of each entity are and understand operational realities, 

capital realities, funds flow, service needs, in ways that can potentially be synergistic.

I want to commend, again, not only Dr. Greenberg for his leadership in that effort, but Mike Moreland on the next panel, who I think 

can elaborate on what really now is, and should be a standard for 

evaluation of potential collaborative opportunities.

It is a systematic ability to review finance, government, human 

resources, and clinical services, and provide a cost effectiveness analysis, not only to look at initial capital outlay, but how to improve 

efficiencies.

Mr. Brown of South Carolina. Thank you. And, Mr. Chairman, 

one further question. What are the advantages and disadvantages 

for VA medical centers to enter into a sharing agreement to become 

TRICARE providers? Is that something that we might work into -- 

The Chairman. Well, let me respond that I think there are advantages. The common denominator among veterans is that they were 

service members, and to the extent that we can work together, I believe that we should be working together, and I appreciate the great 

partnership that has been evidenced by DoD as a whole in the person 

of Dr. Winkenwerder, and as he noted in his testimony, a 59 percent 

increase over the last year alone.

Dr. Winkenwerder. Congressman, I will also just add that certainly from my perspective for the DoD entitled beneficiary population, 

retirees, as well as active duty and their family, but retirees and their 

family members, where there is a VA facility available, we encourage 

that to be used as part of TRICARE Network.

We have contracts, and we have also sometime ago, one of the first 

things we did was to set the payment rate so that it was equal between the VA to the DoD or DoD to VA, and in the past we have had 

problems with disputing, you know, who should get paid what. And 

we said this is crazy. Let us just have one payment amount that we 

agree to.

And that has, I think, helped, but we continue to encourage, from 

my standpoint, you know, we have got fixed assets and our charge is 

how to fully utilize those fixed assets. And frankly where we don’t 
19

need fixed assets, let us not build them. I mean that has been our 

approach.

We, of course, with the BRAC process, we are consolidating Walter Reed in Bethesda. We are consolidating Brook Army in Wilford 

Hall and we are closing ten other hospital inpatient facilities. And in 

some of those locations, we will be looking to the VA as a source for 

inpatient care. So that is our view of the world, and we want to just 

keep pushing forward with that.

Mr. Brown of South Carolina. Well, thank you, Mr. Chairman. I

know it is real refreshing to have both of you at the table and certainly with that cooperative effort, and thank you very much for both 

coming in. Mr. Chairman, in the sake of time, I will just submit the 

rest of my questions.

The Chairman. Thank you, Chairman Brown.

Mr. Reyes, you are now recognized.

Mr. Reyes. Thank you, Mr. Chairman. And I will have just a couple 

of questions, and then have some questions for the record as well.

The first one is Dr. Winkenwerder, how will the Defense health 

program funding be allocated to respond to the population shifts due 

to BRAC in the armies overseas rebasing initiative? I am particularly 

concerned about that because we are going to see growth of between 

21 to 24,000 new troops in our area.

Will funding for military construction to expand and build new 

medical facilities be funded out of the existing DHP military construction account, or will they be funded from the BRAC accounts?

Also have these projects such as the expansion of the Beaumont 

Army Medical Center in El Paso, been included in the services’ BRAC 

military construction plans?

And then, secondly, can you please tell us how you and your staff 

are working with the services, from my perspective especially the 

Army, which will see major growth in several CONUS bases, to ensure that medical services will be available for troops and for their 

families when they arrive at their new duty stations?

Dr. Winkenwerder. Thank you, Congressman, for that question 

there. The short and quick answer to where are the funds coming 

from is that they are coming from the BRAC funding, the designated BRAC funding. Some will be paid for with our ongoing military 

construction account and some, as I understand it, John, would be 

through the Army Modularity, would be sources of funds as well, so 

all three of those.

But we clearly have a challenge in front of us, and we are thinking 

actively right now as we look at the whole issue of BRAC and we are, 

as you know, moving towards more joint operation of medical facilities.

 And traditionally, these have all been funded through individual 

service lines, but we are giving serious thought to if we are going 
20

to have it jointly operated and staff facility, should we think about 

a joint funding mechanism and oversight process to ensure that we 

don’t get undue competition between the services and that we ensure 

that we expend these funds in the most efficient way. Sometimes 

giving somebody an authority to do that, really helps arbitrate the 

process. So we are doing that.

Your second question had to do with how to -- I am sorry?

 Mr. Reyes. With working, especially with the Army, in terms of 

addressing the growth in the bases to ensure medical services to both 

the troops and their families when they actually arrive.

Dr. Winkenwerder. When they come back. Principally, we are 

looking to the Army and to Surgeon General Kiley, Army Surgeon 

General, to identify where there may be a need for more medical resources, be it people or facilities, to handle the additional workload 

that we do anticipate in certain places. Yours might be one of those 

locations and at Fort John, New York, Fort Carson, there is a handful 

of locations. 

But we will be prepared. We are not taking this off our radar screen 

at all. But if there is more detail about that, that we might be able to 

provide for you subsequently, we would be glad to do that.

Mr. Reyes. And I will have some additional questions, but I appreciate the time, Mr. Chairman. I yield back. Thank you.

 The Chairman. Thank you. Mr. Campbell.

Mr. Campbell. I have nothing.

The Chairman. Let me ask you a few questions here before we 

break for our vote. I would like to address the Charleston Model for 

a second, because what I am sensing is that our Collaborative Opportunity Steering Group meets we have a great investment; we have 

no idea where this is going to take us; we jump into these identified 

areas and what are possibly the no-go areas: and so we go into the 

darkness and define it. That is pretty exciting.

 So when it is all done, you know, the three of us are standing there, 

General Love and Mr. McClain and Dr. Perlin, and I don’t remember 

which one of you turns and says we have broken a paradigm. I don’t 

remember which one of you said that.

And I have never forgotten it, because I was just as stunned, because I had sensing, but it wasn’t even where I thought it was going 

to go, and how it got defined was pretty exciting, and I could sense 

that in the room, Dr. Greenberg.

My question is, though, where do we go from here? So we have this 

Charleston Model, we have something we are sort of excited about, 

and we talked about how it can be leveraged and before we can even 

define it and proceed with it in Charleston, it then gets leveraged into 

this idea with LSU, because of what has happened, and this is called 

an opportunity.

 And my gut is telling me that what we did in Charleston is we went 
21

through the heavy lift, but there is still work yet to be done. And so 

are we now getting ahead of ourselves? So where are we “on the next 

phase” with regard to the Charleston Model? Dr. Perlin.

Dr. Perlin. Well, thank you, Mr. Chairman. And, you know, I

think if there is a completed product, initially, part is the model itself 

for evaluation.

The Chairman. Yes.

Dr. Perlin. So let me put that aside and come back to Charleston 

specifically. I think I may have used the term that this is a new 

paradigm, and it really was a new lens, a new way of looking at collaboration.

I am extremely excited about what it brought us in terms of opportunity. Seven million dollars has been transferred to the Charleston 

Medical Center, and they will, as quickly as the federal processes 

allow, contract for the new services which will bring great new technologies to both veterans and the citizens of the state.

 The tomotherapy, a type of radiation therapy that is available nowhere else in the state currently, will come to veterans and citizens 

as result of this collaboration as will two angiography suites. So I 

think the model of putting the capital investment there and receiving 

reduced rates on services in return, is absolutely fantastic. So the $7 

million are already transmitted.

 Now the assessment brought forward a number of different proposals. Admittedly some were permutations of the others, particularly 

if you remember the “A” group of models. I have concurred that the 

analysis is effective. I have nothing to add to it in terms of believing 

that I can out think the great work that the group did.

 And I have submitted a forward to the Department’s Capital Asset 

Management board for prioritization among all of the construction 

projects to capital investment activities in the Department that the 

Secretary might consider.

The Chairman. My gut is also telling me we haven’t defined criteria 

on how and where to use such a model. I mean, I look across the landscape out there, and say, okay, let us see. In Charleston, the Medical 

University has a construction project that is on a time line. Yes, we 

are able to provide quality services. When does the model fall into 

that time line? That is an unknown.

We know we are constructing a new hospital in Orlando. We have 

one in Las Vegas. We have one in Denver, and now we have this in 

New Orleans. So these are very large construction projects.

We have not been in the building business since, what, ‘92, ‘93? So 

it has been a while since we have been in the building business, and 

we are about to get into the building business in a very large way.

 So when we look at this, and we go, okay, in Orlando, the State of 

Florida wants to build a medical university. So my gut is telling me, 

try to move into that in close proximity, and when they can move 
22

together it is a good thing.

 I also learned then when I am out with Ms. Berkley in Nevada, that 

the chancellor of UNLV wants to do a medical university. It is a good 

thing, you know what I mean, to do that collaboration.

 We didn’t do so well in Denver with regard to these initiatives, 

but it did give us the opportunities to progress because Dr. Greenberg hired the same firm that was used in Denver, and we had the 

VA working with Dr. Greenberg on matters we were able to work 

through in Colorado.

And now we have New Orleans. We have Mr. Miller dancing on 

the edge there with regard to New Orleans, and it was about right 

to go through the door of something very challenging. The President 

of the United States has said that we are committed to help rebuild 

New Orleans.

 And so now we have this task, and I understand the sensitivities. 

I don’t live in the Gulf region, such as Chairman Miller, but the sensitivity is to trying to service veterans there and at the same time, 

LSU has a challenge. They want to progress. They want to move into 

the future. If we can do that in collaboration with them, and define 

where it is going to be, I understand where we want to go.

Okay. I can embrace that, while I am also equally as sensitive to 

Chairman Miller’s concerns.

So now let me dance -- let me try to go in with Chairman Miller for 

a second. Now we are going to do this with regard to New Orleans, 

and we are closing Gulf Port and enhancing Biloxi. What are we 

doing about having a joint facility with Keesler? I don’t understand 

that.

Dr. Perlin. I am sorry. I am not sure I understand, because we are 

doing a joint facility with -- 

The Chairman. Why? That is my question. Why? I mean the close 

proximity of it, with only the available dollars -- I guess I don’t know 

what you mean by joint facility with Keesler.

Dr. Winkenwerder. What we mean is this, and I don’t want to get 

to far ahead of where the work group is, but the Air Force has a hospital base at -- hospital -- at the Keesler base. It was scheduled to become a clinic, originally with a BRAC process, rather than a hospital, 

because of the level of utilization and the relatively small population 

of people being served.

 One of the thoughts is rather than to rebuild -- and it was damaged 

-- significantly damaged in the storm. As I understand it -- and I visited the hospital -- I didn’t visit the VA right after the storm -- is that 

the VA facility is on higher ground, is very nearby.

Rather than our, again, trying to reconstitute and build and invest 

heavily in a new hospital structure, we may want to consider using 

the VA and partnering with the VA to use the VA for an inpatient 

facility.
23

And even -- and then I don’t know about the outpatient piece yet, 

whether we build something alongside it or have it on the base or 

how all it would work, but the point is it is an opportunity to think 

freshly rather than both systems just going down their merry paths 

to recapitalize and rebuild.

The Chairman. All right. Right before I yield to Mr. Baker of Louisiana, Dr. Winkenwerder, I would like you to know this, that when we 

went through the budgetary process last year, we learned in greater 

detail how DoD was really cost-shifting dental into the VA. And that 

was a great concern of mine and in the 14 years that I have been here 

on Capitol Hill, I have never had a general officer be non-responsive.

Twice my staff put in phone calls to the Surgeon General of the 

Army, General Kiley, and I have never been stiff armed before, but 

now once in November and once in December, and I have never heard 

from him. So let me tell you what that means. That means that he 

has invited this Committee into his business, that is what it means.

So I have assigned the O&I Subcommittee to do an investigation on 

the issue. So you can please take that message back to the Surgeon 

General of the Army that we don’t appreciate that type of -- well -- 

conduct.

 This moment, let me yield to Mr. Baker.

Dr. Winkenwerder. Thank you. Mr. Chairman, if I might just respond to that. I wasn’t aware that there was a concern, and I do find 

it a bit unusual that General Kiley wouldn’t respond to you, not a bit. 

It is -- I don’t have an explanation for that.

The Chairman. The invitation has already been out there.

Dr. Winkenwerder. Yeah, but we will convey the information, and 

we have been working together in the dental issue. To my knowledge, it has been worked and worked out. So, but we will -- 

The Chairman. Well, if that in fact is true, I will find out, I have 

never been stiff armed before, and that is really insulting.

Dr. Winkenwerder. Okay.

The Chairman. Mr. Baker.

Mr. Baker. Thank you, Mr. Chairman. In light of the votes pending, I shall be brief. I understand also that LSU is scheduled to appear at later time during the hearing today, and it would be appropriate for me to speak further at that time.

 But I would like to point out that with regard to resolution of veterans’ healthcare in the State, we are still at a very unsettled time 

in our State. A housing resolution is pre-imminent of importance. 

There have been literally hundreds of thousands of people dislocated 

with not the ability to return as of this date and likely for the foreseeable future.

Although I will be quick to point out that the dislocation is not 

permanent, nor does it mean that individuals have left the State. It 

is my hope that LSU and the necessary healthcare professionals and 
24

the VA can work together cooperatively going forward, but I would 

not want to arbitrarily forgo a load of bricks anywhere else right at 

the moment.

Until appropriate professional assessment is made of the continuing need within Louisiana, our recovery effort is likely to be decades 

long. It looks as if the supplemental now pending is subject to some 

controversy, and if we are unfortunate enough not to receive additional assistance, it is going to be extremely important to have every 

other federal agency cooperating with us to the maximum of their 

legal authority.

So I wanted to just put a statement on the record that I don’t have 

the answer. I don’t know what should be done today, but I don’t 

have access to anyone who can tell me. And I am going to await the 

professional judgment of those to tell me what future needs may look 

like and what it makes sense in the way of deployment of strategic 

federal resources and certainly not to put people back in harms way 

of a future storm. That would be the least level of responsibility that 

would could exhibit.

So Mr. Chairman, I appreciate the courtesy of allowing me to make 

this statement. I understand that LSU is to be heard later, and I may 

revisit the subject at that time. Thank you, sir.

The Chairman. Thank you very much. Does anyone have any follow-up questions with this panel?

[No response.] 

The Chairman. If anyone has questions for the record, please submit them. We are going to have six votes. Is it up right now?

We are going to have six votes. So this first panel is excused, and I 

apologize to the second panel. Dr. Greenberg, when is your flight?

Dr. Greenberg. No problem, sir.

The Chairman. All right. We will stand in recess, and we will return immediately after the sixth vote.

[Whereupon, at 3:15 p.m., the Committee recessed to reconvene at 

4:30 p.m., the same day.]

 The Chairman. The full Committee of the House Veterans’ Affairs 

will come to order. The second panel will please come forward, Please 

take your seats at the witness table.

While the second panel moves forward, let me provide a brief introduction of each of the panelists. Mr. Michael E. Moreland is the 

director and chief executive officer of the VA Pittsburgh Healthcare 

System. Mr. Moreland oversees the management of three campuses 

with 692 operating beds, distributed among medicine, surgery, psychiatry, immediate care, nursing home care, and domiciliary.

Dr. Ray Greenberg became the eighth president of the Medical 

University of South Carolina and is the professor -- I didn’t know 

you were still teaching -- of biometry and epidemiology. I guess I 
25

just didn’t know that. I thought the whole admin kept you so busy, 

but you are still in the classroom. Well -- not very often? That is a 

nice title to have on the side. I don’t mean to bust you publicly, but 

congratulations.

We also have with us Mr. Donald Smithburg, who currently serves 

as the chief executive officer of Louisiana State University, LSU, 

Healthcare System Division, headquartered in Baton Rouge, responsible for nine hospitals across Southern and South Central Louisiana. 

LSU provides the vast majority of care to the uninsured and working 

poor in the State of Louisiana.

 Gentlemen, I want to thank you for making the trip here to Washington, D.C., to testify before the Committee. May I also extend an 

apology. Sometimes you get six votes in the middle of a Committee hearing, and members, get all together, and then they scatter. 

We had such good rhythm going, so hopefully some members will 

return.

What is most important is, that we are able to get this on the public 

record. We can have a good discussion and I am pleased that Chairman Brown is here.

Let me turn to the witnesses for the second panel and, Dr. Greenberg, you are recognized for testimony.

STATEMENTS OF RAYMOND S. GREENBERG, M.D., PH.D.,

PRESIDENT, MEDICAL UNIVERSITY OF SOUTH CAROLINA;

 ACCOMPANIED BY JOSEPH G. REVES, M.D., VICE PRESI-

 DENT FOR MEDICAL AFFAIRS AND DEAN, COLLEGE OF

MEDICINE, MEDICAL UNIVERSITY OF SOUTH CAROLINA;

 MICHAEL MORELAND, MSW, CHE, DIRECTOR AND CHIEF

 EXECUTIVE OFFICER, VA PITTSBURGH HEALTHCARE SYSTEM, DEPARTMENT OF VETERANS’ AFFAIRS; AND 

 DONALD R. SMITHBURG, EXECUTIVE VICE PRESIDENT

 AND CHIEF EXECUTIVE OFFICER, LOUISIANA STATE

 UNIVERSITY HEALTH SCIENCE, CENTER HEALTHCARE

 SERVICES DIVISION

STATEMENT OF RAYMOND S. GREENBERG

Dr. Greenberg. Mr. Chairman, Chairman Brown, Members of the 

Committee, it is a privilege to appear before you this afternoon on behalf of the Medical University of South Carolina. The message that 

I wish to convey to you is that we greatly value our work in relationship with the Department of Veterans’ Affairs, and we look forward 

to the opportunity to expand that relationship.

As we explore opportunities to build on our already existing collaboration, we are driven by one primary motivation and that is to 

improve the care of the veteran population that we and the Veterans’ 
26

Affairs serve.

Let me be clear here. Veterans in the Charleston area today in my 

opinion get absolutely excellent medical care. So why then if things 

are going so well would be motivated to make any changes.

 To me there are really two fundamental reasons for this.

The first is that hospital care is becoming increasingly complicated, 

in part because today only the sickest patients are admitted to hospitals. And secondly the technology that is used to care for these 

patients has grown evermore complex and expensive.

Personnel shortages and expensive technology drive up the costs 

of healthcare, and you as legislators and we as healthcare providers 

have a shared mutual interest in assuring that healthcare delivery 

operates as efficiently as possible.

So how then can we be more cost effective?

As Mr. Moreland is going to describe in more detail in his testimony, 

one of the most attractive opportunities for us is to avoid redundancy 

in building and operating separate expensive highly specialized diagnostic and treatment equipment and facilities.

By sharing resources, we can save an avoid duplicative capital investments. This type of partnership has been undertaken successfully by the Department of Veterans’ Affairs elsewhere on a somewhat 

limited basis. What we are proposing is to build upon those successes 

by expanding the level of collaboration and we are prepared to be an 

immediate test case.

 The opportunity to take our working relationship to a higher level 

was created by the Medical University’s decision to replace its 50-

year-old teaching hospital. The site for the new hospital, presently 

in the first phase of construction, is immediately adjacent to the VA 

Medical Center.

In the 2004 CARES study, a replacement VA medical center was 

not proposed in Charleston, but a specific recommendation was made 

to explore enhanced collaborations with the Medical University.

In August of 2005, Under Secretary for Health of the Department 

of Veterans’ Affairs, Under Secretary Perlin, cited the recommendations of the CARES report and charged representatives of the Department of Veterans’ Affairs and the Medical University, and I am 

quoting here, to determine what if any mutually beneficial consolidation should occur between the Charleston VA Medical Center and 

MUSC.

A working group was formed to study that. I was privileged to cochair it with Mr. Moreland, the director of the VA Pittsburgh Healthcare System. With your indulgence, Mr. Chairman, I would like to 

take this opportunity to thank Mr. Moreland and his colleagues from 

the Department of Veterans’ Affairs for the diligence that they approached this assignment with.

By December of this past year, a final report was prepared which 
27

summarized our findings. With your permission, I would like to submit a copy of that report which I have with me for the record today.

 The Chairman. Hearing no objections, so ordered.

 Dr. Greenberg. The steering Committee focused on -- 

 The Chairman. Will the gentleman pause for just a moment. This 

is a pretty long document, right?

 Dr. Greenberg. It is about 40, 50 pages.

 The Chairman. So if you would revise your request, if you would 

make this submitted for part of the written record of today -- no, that 

won’t do it either.

All right. Let us do this. I would ask unanimous consent that this 

be made -- that your proffer be made part of the official record, but 

not part of the published record. Would that -- 

 Dr. Greenberg. That would be perfect.

 The Chairman. All right. Hearing no objections, so ordered.

 Dr. Greenberg. The steering group focused on collaborative efforts 

that would increase the quality of services, lower overall facility and 

operating costs an ensure optimal use of the land resources.

 It was agreed that any model of integration would be essential -- it 

would be essential for the VA to have its own bed tower, including 

general medical and surgical ICU beds. This facility would be clearly 

identified and designated as the VA Medical Center. Veterans would 

be housed with other veterans and would not be intermingled with 

other patients.

Staffing on these wards would continue to be provided by VA personnel. All of these were issues that were expressed to us as important by the Veteran service organizations and the employees of the 

VA Medical Center.

The opportunities for sharing come in the various support areas 

and in particular the expensive technology intensive areas such as 

operating rooms and cardiac catheterization labs. In scheduling the 

use of these resources, veterans would be given the same or higher 

priority as non-veteran patients.

By sharing these resources, both the VA Medical Center and MUSC 

could lower their operating costs. In the process, we could also assure 

that the latest technology is available to both patient populations and 

in particular that local veterans would not have to travel great distances to get these same specialized services.

With agreement to this basic concept, we then explored several 

models of sharing, and at the risk of oversimplification, let me say 

that these models differed with respect to the size and contents of the 

facility to be built by the VA Medical Center.

A very interesting observation that came out of this was that despite initial significant differences in construction costs for the various models, if you looked over the 30-year life cycle costs, there were 

really very modest differences between them.
28

 For example, if you took the most extensive model and then you 

compared that to not replacing the VA Medical Center at all, over 30 

years of life-cycle costs, it was only about a 10 percent differential. 

In other words, for a premium of about 10 percent, veterans could 

receive care in a brand-new state-of-the-art facility as opposed to one 

that is today 40 years old, and by the time of that 30-year period, it 

would be 70 years old.

There was further good work that came out of the evaluation, in 

that the group focused on governance issues concluded that we could 

create an advisory structure for sharing opportunities without undermining any of the existing authorities of either the VA or the MUSC 

executive leadership teams.

And the work group on legal matters concluded that all of the necessary authorities required for both construction and contracting already are well-established so there should not be a requirement for 

any additional statutory changes.

In choosing between the various models, at least two important 

considerations surfaced. First there is the very pragmatic question 

of the amount of money the Federal Government can afford to invest 

in constructing a new VA medical center facility. This is a resource 

allocation question that clearly went beyond the scope of our assignment as a steering group.

The second key issue that arose during our evaluation was whether 

VA facilities would be required to be built to the new federal guidelines for homeland security. These guidelines while understandable 

and defensible for safety purposes, raise construction costs an estimated 30 percent.

Thus, it would be more expensive for the VA medical center to build 

shared space than for an outside entity to do so.

 For the purposes of our analysis, we assumed that the safety standards would have to be met. If it turns out that those guidelines are 

not required, our estimates of VA medical center construction costs 

can be revised downwards by about 30 percent.

A related issue is the fact that the existing VA medical center is in 

a flood zone, and as it was designed more than four decades ago, it is 

vulnerable to a major hurricane. While we are about to hear about 

the situation in Hurricane Katrina, it seems particular prudent at 

this time, to make sure that similar disasters don’t occur to other VA 

medical center facilities that are in hurricane areas.

If the Committee and the Department of Veterans’ Affairs find favor in our recommendations, there clearly is further work that needs 

to be done. We need to move from the macro level of the initial evaluation that has been completed to the micro level of really focusing on 

operational issues.

 Our suggestion is that we formalize an initiative as a demonstration project. We appoint a working group to develop an implementa-
29

tion plan and we allocate appropriate resources for that effort.

Mr. Chairman, thank you very much for your time.

[The statement of Raymond S. Greenberg appears on p. 71]

The Chairman. Mr. Moreland, you are now recognized.

STATEMENT OF MICHAEL MORELAND

Mr. Moreland. Thank you, Mr. Chairman and Members of the 

Committee for this opportunity to testify on the important topic of 

improving veterans’ access to care through collaborations.

In my experience as the director of the VA Pittsburgh Healthcare 

System and at other facilities, I have participated in a number of 

positive collaborations. I also am familiar with a variety of collaborations that have worked well for my VA colleagues.

 Today I will share a few examples and provide an overview of the 

collaborative study that I was privileged to co-chair with Dr. Greenberg, and I, too, congratulate Dr. Greenberg for such wonderful staff 

and the great work we did together. But I will go ahead and talk a 

little bit about that and the potential sharing opportunities between 

the Charleston VA and the Medical University of South Carolina.

First I want to outline in general terms the process I have used to 

determine whether particular collaborations were likely to in the best 

interest of veterans. For a collaboration opportunity to be considered favorably, it should increase veterans’ access, improve quality 

through service enhancements and provide VA with improved efficiency.

As one would expect, if two organizations can share a capital expense rather than duplicating it, they will save money on equipment 

and buildings. Those funds can then be used to enhance services. 

When deciding whether to consider sharing a given resource, we first 

determine the cost providing that service independently. Then costs 

are developed for joint delivery of that service.

For a collaboration to be considered a good sharing opportunity for 

VA, it must be more efficient for VA to deliver that service in collaboration with another entity, or the sharing might provide an enhancement to care that VA could not offer independently.

The quality of the service delivered has to be as good or better than 

what is currently provided. The best sharing opportunities improve 

services while saving cost. To make these comparisons, data relating 

to demand and capacity for particular types of care, trends in the 

quality of service delivery and cost information are reviewed.

A good example of a sound collaboration is the Charleston VAMC 

and MUSC planned sharing of high tech equipment. Veterans and 

patients of MUSC will have access to care enhancement and the cost 

of each organization will be improved by sharing the equipment and 
30

the expense.

The type of sharing arrangement used in this case allows the VA 

to make a capital investment up-front that is then recouped through 

revenue that supports operating expenses for several years.

In Pittsburgh, VA collaborated with the Commonwealth of Pennsylvania in providing long-term care to the State’s veterans. VA provided the State with land on the grounds of the Pittsburgh Healthcare 

System and a grant for the construction of a long-term care facility. 

The State, under a sharing agreement, purchased services from VA 

to assist in the operation of that facility. This facility offers several 

levels of care that are in great demand in Allegheny County with this 

large population of aging veterans.

The Buffalo VAMC contributed $250,000 toward the purchase of 

a new PET Scanner for University Nuclear Medicine, Inc. VA’s purchasing power resulted in a lower price. The University Group operates the scanner and VA purchases services at a negotiated reduced 

rate. Again, the community and its veterans benefit from additional 

services and both organizations reduce cost.

I completed a similar arrangement while I was the director of the 

Butler VA, in which VA purchased a CT scanner that was installed 

in and operated by the community hospital. VA then received access 

to very low cost CT services for veterans and the community benefitted through the availability of high tech equipment that local facility 

-- that that local facility could not readily afford.

In all of these arrangements, there are numerous legal and technical details that require careful planning. In each instance, the arrangements are a good financial deal for veterans. For funds that are 

saved through these collaborations support other service enhancements. Savings like these assist us in maintaining and enhancing 

care in an era of bourgeoning demand for VA care and continually 

escalating healthcare cost.

On occasion, I have been presented with opportunities for collaboration that were presented as good deals for the VA. However, financial 

analysis revealed the proposals to either increase operating expenses 

over current expenses or to require up-front financial outlays without 

a reasonable return on investment. While this may seem obvious, it 

is important to note that any prospective collaboration must be considered on its own financial merit.

 The Collaborative Opportunity Steering Group that developed 

sharing options for the VAMC in Charleston and MUSC presented an 

opportunity to consider taking this type of sharing to a much broader level. This Group developed options for joint construction, as Dr. 

Greenberg described, of new facilities that would maintain both organizations’ identities and independent mission while sharing some of 

the enormous cost burden associated with replacing aging healthcare 

facilities.
31

The Group was able to identify viable models for such construction. 

By sharing some of the higher cost infrastructure, both VA and the 

University could reduce the investment required to build and operate 

new facilities.

As I mentioned earlier, this Group identified opportunities to collaborate in the purchase of high-tech equipment that will make new 

state-of-the-art services available to veterans and other residents of 

South Carolina that might not otherwise be feasible for either organization to provide independently. The successful experience VA has 

had in this type of sharing at other facilities enabled this Group to 

recognize this opportunity in Charleston.

The plan for equipment sharing in Charleston is in the process 

of being implemented. I believe Dr. Perlin mentioned $7 million in 

equipment funds have already been transferred to the VA in Charleston. Draft documents are being prepared to complete this process.

Collaborative opportunities abound as private and public sector facilities across the nation are seeking to upgrade aging infrastructure 

and bring state-of-the-art care to their communities. With thoughtful planning, these collaborations can be mutually advantageous and 

provide VA with opportunities to assure that veterans have access to 

the latest technology at a more efficient cost. Thank you, Mr. Chairman.

The Chairman. Thank you very much. Mr. Smithburg, you are now 

recognized.

[The statement of Michael Moreland appears on p. 78]

STATEMENT OF DONALD R. SMITHBURG

Mr. Smithburg. Thank you, Mr. Chairman. I am Don Smithburg, 

CEO of the LSU Hospitals and Clinic System in Louisiana. I thank 

you for your interest in healthcare in Louisiana after Katrina and 

Rita in particular.

 I also thank you for the invitation to appear today and the opportunity to answer any questions you may have about Louisiana State 

Public Hospital System, especially as a potential partner with the 

Depatrtment of Veterans’ Affairs in New Orleans.

I represent nine of the eleven State public hospitals and over 300 

clinics that traditionally have been called the Charity Hospital System in Louisiana. I would like to briefly describe that for you.

Our hospitals and their clinics constitute the healthcare safety net 

for the State’s uninsured and under-insured, particularly the working uninsured. Fully two-thirds of our patients are hard-working 

Americans.

In your States, this role is generally a local government function, 

but in Louisiana it is the responsibility of a State-run and Statewide 

hospital and clinic referral system, under the aegis of Louisiana State 
32

University, LSU. 

This system has been in place for 270 years.

 The LSU hospitals also have had an integral role in supporting the 

education programs of our medical schools and training institutions 

for generations, and that includes not only LSU, but also Tulane University and the Ochsner Clinic Foundation.

Our system flagship is in New Orleans and commonly is known as 

Big Charity, which is actually two hospitals, Charity and University, 

operated under one medical center umbrella. Big Charity has been 

in operation since 1736, making it the second longest continuously 

operating hospital in the United States.

At our New Orleans facility alone, there were over 1,000 Tulane 

and LSU medical students and medical residents in training and 

many more nursing and allied health students, plus thousands of 

staff when Katrina struck and then her floods devastated our institution. Some of these very same students and faculty had rotations at 

the VA Hospital in New Orleans as well.

As a flagship of our Statewide system, Charity Hospital sits just a 

stone’s throw from the VA Hospital. Big Charity operated the only 

level-one trauma center that served South Louisiana and much of the 

Gulf Coast.

Today these facilities sit in ruins. Charity Hospital has been 

deemed uninhabitable and unsalvageable for healthcare by consulting engineers. And a somewhat younger University Hospital that we 

operate -- it is only 35 years old -- although severely damaged and 

not viable in the long term, will be temporarily propped up as an interim solution toward New Orleans’ critical need for health services.

 And we are seeing our patient population grow steadily every day, 

up to 300 patients a day that we are seeing in tents; a series of ten 

tents currently operating in the convention center, which are about 

to be relocated to an abandoned department store.

 Time does not allow me to go into detail about what we are seeing 

in terms of the population change and demographic nature of our 

community, but I can tell you that a replacement hospital is absolutely critical.

We see the potential collaboration with Veterans’ Affairs and Louisiana State Public Hospital System as one propelled by unintended 

opportunity. With both systems’ hospitals in New Orleans devastated by Katrina and her floods, we stand at a rare moment in time, 

a chance to jointly design and cooperatively operate a new facility 

that meets the needs of both institutions and the patients they serve 

while at the same time achieving significantly enhanced efficiency, 

cost savings, and quality healthcare.

The integrated structure and vision of the VA system has permitted it to become a leader in the development and use of electronic 

records. You know this. It has made tremendous progress in this and 
33

other areas in the last decade. Electronic medical records also are a 

high priority for LSU, although we are not as far along as the VA. In 

fact, in my view, the VA is more advanced in information technology 

than most in the healthcare industry.

The collaboration of the VA and LSU in the narrowest view offers 

the opportunity to solve the immediate facility problem of the two 

systems in New Orleans, but it is also an enlightened and visionary 

step that will create a major asset for rebuilding community and a 

base from which to better serve the patients who depend on us.

Governor Blanco and our legislative leaders from both sides of the 

aisle, have recognized and embraced the benefits of collaboration 

with the VA. The media has extolled the virtues of this potential 

collaborative, despite so much coverage about what has gone wrong 

in dealing with the hurricane zone. Thoughtful editorials have applauded this effort as a real diamond in the rough.

We welcome involvement from other allies and together we can 

take advantage of an historic opportunity to improve care for those we 

serve and at the same time help to rebuild a major American city.

 Thank you, again, for your interest for this opportunity to share 

LSU’s perspective on this critical matter.

[The statement of Donald R. Smithburg appears on p. 81]

The Chairman. All right. Thank you very much. I want to get this 

right in my mind. We, on the Committee, are moving in this sort 

of trend, from the collaboration with personnel and equipment, and 

then to facilities, with university hospitals.

So my sense here is, that this is not all really defined that well at 

the moment. So you have a university hospital in New Orleans, correct? You have University Hospital and you have Charity?

Mr. Smithburg. They are both one institution with two names -- 

there are two buildings with distinct names, but they are one medical 

center that serve as an academic medical center. One happens to be 

called University Hospital, but they are both the primary teaching 

hospitals for LSU and Tulane.

The Chairman. All right. You know, we kind of have this also in 

Indianapolis. We have the University Hospital next to our VA, and 

we have Wishard, and Wishard is sort of the safety-net hospital. 

Mr. Smithburg. Mr. Chairman, we are both.

The Chairman. But your Charity Hospital is also run -- is owned by 

the State of Louisiana.

Mr. Smithburg. The Charity Hospital and University Hospital are, 

for all intents and purposes, one and the same.

The Chairman. Oh. You can’t answer like that.

Mr. Smithburg. Well -- 

The Chairman. Tell me what the legal standing is.

Mr. Smithburg. The legal standing is that they are both one Medi-
34

care provider number which identifies the institution. They are both 

entities of LSU, which is an instrumentality of State Government.

The Chairman. All right. There we go.

Mr. Smithburg. They are both, via contracts, teaching hospitals 

for LSU School of Medicine, dentistry, nursing, allied health, and 

their counterpart is at Tulane. All of the primary training programs 

of those institutions go through Charity. There is one management 

team. The CEO of what we call the medical center of Louisiana, New 

Orleans, is Charity University Hospitals. It is one medical center, 

has one management team that reports to me.

The Chairman. Well, I don’t want there to be confusion out there 

across the country in different cities either. If we are going to do 

collaboration and we do it with medical universities, we want to 

make sure that -- are you going to change the names on any of these 

things?

Mr. Smithburg. We are certainly open to that, sir.

The Chairman. You are open to it. Great. I just want to make sure 

that our collaboration -- I mean if we are going to do our collaborations with university hospitals, I don’t want some other city to go, 

well, you know, I still have got my non-for-profit over here, and why 

can’t -- I don’t want to do that. 

We can get away -- 

Mr. Smithburg. Could I try to -- 

The Chairman. Our trend line here is, is we do collaborations with 

agencies of Federal Government, which isn’t as easy as I just said it. 

It amazes me. But it should be a lot easier, right? So then we say you 

know what? There should not be anything wrong with a relationship 

between the Federal Government and State Government with regard 

to facilities.

But I don’t want to send the wrong message out there in the country 

that we are going to do a collaborative effort with Charity Hospital. 

Names are pretty doggone important. I just want to let you know. I 

would love to make sure that we label and title this as a collaborative 

effort between the VA and the University Hospital at LSU.

Mr. Smithburg. I can tell you right now, Mr. Chairman, the MOU 

that the VA signed with us -- 

The Chairman. Yes.

Mr. Smithburg. -- is with LSU Healthcare Services Division. It 

is with LSU.

The Chairman. All right.

Mr. Smithburg. And that will be the arrangement going forward.

The Chairman. Thank you. All right. You just put me at rest. I 

appreciate that.

Mr. Smithburg. Sorry for the confusion.

The Chairman. No, no, no. That is all right. And your present 

University Hospital you are going to utilize -- you can’t go back into 
35

Charity? That’s correct?

Mr. Smithburg. Correct. Yes, sir.

The Chairman. And why can you utilize part of the University Hospital?

Mr. Smithburg. Well, it was not our first choice. There are very 

few physical assets that can be used for healthcare purposes in the 

market right now. We are leasing a building from another institution 

that was not badly flooded to prop up a temporary trauma center. It 

is actually not even in the City of New Orleans.

And then we searched and searched to see if there was another 

building we could lease, renovate, with FEMA’s help and prop up as 

a temporary hospital until we got a permanent replacement.

Such assets were not available to us, and so our last ditch effort 

was to look within our own asset base and see what it would take and 

FEMA has helped us figure out what it would take to temporarily use 

one of our buildings which is called University Hospital to provide 

about 200 beds.

The jury is still out as to whether we can really do it, but FEMA has 

approved a work order to try to make that happen, and it will take 

some doing, and it will probably cost tens, if not, over a hundred million dollars just to temporarily prop it up.

The Chairman. Mr. Moreland, let me go back to this. I come to see 

you as one of the more forward thinkers in the Department, and I am 

thankful for your involvement in working with Dr. Greenberg and 

having spoken with Dr. Greenberg. His feelings, I think, reflect mine 

about you.

 Given Dr. Greenberg’s testimony, he says our suggestion is to formalize this initiative as a demonstration project and appoint a working group, to develop an implementation plan and allocate resources 

to that effort. The word “our” -- let me hit both of you here -- the word 

“our,” Dr. Greenberg, means who? Does that mean you and Mr. Moreland or does “our” mean you at the university?

Dr. Greenberg. Mr. Moreland and I agree on many things, but I

am speaking only for myself in that instance. “Our,” I am speaking 

on behalf of the University.

The Chairman. Okay. Now, Mr. Moreland, let me ask for your 

counsel with regard to Dr. Greenberg’s suggestion.

Mr. Moreland. My understanding of the project and where it sits 

at this moment, is the report that we, Dr. Greenberg and I, submitted, has been reviewed by Dr. Perlin, and it has now been forwarded 

up the chain to the Secretary’s Capital Asset Board. My understanding is, is that that board will then review that and they will propose 

further action. And so that is where I understand the process to be.

The Chairman. You know, we have got ourselves in this situation, 

Dr. Greenberg, where you and Mr. Moreland, are working on a particular project, and are you about to be overtaken. And I look at this, 
36

as your work product is of tremendous value because you have frontloaded an ambition with regard to New Orleans.

But your work is not done, and as we take your work to a second 

stage, that continues to be helpful to us also in New Orleans, as we 

also then get judgment on what actions to take in Charleston. So, you 

know, someone made a comment one time saying, well, Charleston 

wasn’t in CARES on hospital priorities. I don’t think that is completely accurate at all.

 You are right. Charleston was mentioned in CARES to do this 

collaborative effort, to do the investigation, and now this is what it 

is showing us to do. So when I look out there in the horizon of the 

hospitals that we need to build, there are five of them. And they are 

Las Vegas and Denver, and Charleston, Orlando and New Orleans. 

Those are the five that are in front of us. That is a very large dollar 

figure to do this, and so the Committee wants to make the best judgment in the interest of veterans.

The challenge here is how we step into the next phase, and continue your work. The question is what time line does it strike that 

benefits your construction time line in Charleston? That is a challenge, Dr. Greenberg.

Dr. Greenberg. Yes, it is, Mr. Chairman, and I guess I would start 

by saying to me the development in New Orleans with respect to 

LSU is both good news and bad news. I mean the good news is that 

already the Department of Veterans’ Affairs and another academic 

medical center have recognized the value of the partnership that we 

have begun to develop. 

 So we have talked about this as a national model. Today was the 

first day I heard it really described as the Charleston Model, but we 

have always thought of this as a test case for replication elsewhere. 

And the fact that it is so quickly, the ink is hardly dry on our December report and it is already being proposed elsewhere, to me suggests 

the obvious value and benefit of it. I mean it is already being emulated. We don’t have to wait for years for somebody to emulate it.

 On the other hand, I think your point is extremely well taken that 

we are only the first step or two into a multi-step process, and it 

would be discouraging to me if we didn’t take further steps down that 

implementation process. And that is complicated by the fact that we 

are in the process of building a replacement hospital right now that 

will be -- the first phase of which will be completed within a year.

This opportunity is really in the second phase, which we would 

like to undertake in about three or four years, begin the construction 

of that. So the longer the delay, the less likely that we could actually do a project on the time line that would make sense both for the 

Department and for the medical university. To me that would be an 

opportunity lost, because I think the ideal thing is to bring the time 

lines as close to mutual interest as possible.
37

The Chairman. Well, Mr. Smithburg should say “thank you” to you, 

because actually you are designing the blueprint for what could happen in New Orleans. So what we kind of have here is that it is in 

your interest to continue to do the lift for which you do not receive 

the immediate benefit. It is kind of weird, isn’t it? You know what 

I mean?

But what you are doing is right, because you are developing the 

model to be leveraged, but you don’t get to be first.

Dr. Greenberg. Right.

The Chairman. I know you would like that. But there is an immediate need right now and a national focus in New Orleans. That 

is the reality I think that is in front of us. I mean wouldn’t you agree 

to that?

Dr. Greenberg. Absolutely. I think ever leader of every academic 

medical center in the United States would say that our colleagues in 

New Orleans deserve every consideration. I mean especially those of 

us who live in an area that has been severely hit by hurricanes in the 

past. And so we know what damage can result. We have tremendous 

empathy for our colleagues in New Orleans and if there is any part of 

the country that deserves special consideration right now, it certainly 

is New Orleans.

The Chairman. You know, Mr. Moreland, Dr. Greenberg, what you 

do here is you design it. You build the model. You do the blueprint, 

and LSU, guess what? You get to go first. My benefit comes from any 

mistakes that you make.

I mean you are going to get some benefit out of this, but there are 

going to be some challenges. Ten thousand decisions to be made. You 

hope for the best, right, and there is a great learning curve that we 

are going to have through it. Right? Don’t you agree, that is kind of 

where we are going here? I want to talk this through.

Mr. Moreland. Well, I can only share with you that in setting up 

the Collaborative Opportunity Steering Group in New Orleans, I

have already in my discussions with Mr. Smithburg, we have identified some adjustments and minor modifications to the process from 

things that Dr. Greenberg and I learned in the first process. So I do 

think that, you know, some of the lessons that we learned in that process will transition to make the next review even better.

Mr. Smithburg. I would submit to you, Mr. Chairman, that about 

the last thing I would want to have happen is for our potential endeavor to supplant slow or erode the progress in Charleston. Unfortunately Mother Nature kind of didn’t pick her timing and so regrettably the New Orleans VA and the LSU System is out on the street.

But I think at the same time, because we are forced to be in a fast 

track situation, that hopefully that while we are going to take a number of pages out of Dr. Greenberg’s play book, we may help write a 

few for him as well along the trail, and we will have -- 
38

The Chairman. All right. So let me do it like this. So I am trying to 

figure this out. Mr. Moreland, you are intimately involved in both?

Mr. Moreland. Yes, Mr. Chairman, I have been provided the wonderful opportunity of being the chair of both -- 

The Chairman. I am proud of you.

Mr. Moreland. -- collaborative opportunities.

The Chairman. I am proud of you.

Mr. Moreland. Yes, sir.

The Chairman. Now you have your work you have done in Charleston. Charleston is getting a little impatient. They want to go to the 

next phase. They want to proceed on. You have New Orleans going 

on over here. What is the best way to proceed?

Are we really going to say we take your work product that you have 

from the Steering Group, the Charleston Model, now you take that 

over to the LSU model, and the second phase we are talking about, 

where do we need to go next to drill it down from macro to micro? 

LSU perhaps could go first, is that what we need to drill it down with 

them as opposed to drilling it down with Dr. Greenberg? I am trying 

to figure out methodology here.

Mr. Moreland. Yeah.

The Chairman. Have you thought about that?

Mr. Moreland. I am not sure I can answer that question today. I 

think that is an excellent question, and, you know, I am not sure -- 

The Chairman. Because his is on the fast track.

Mr. Moreland. Right. And I am not sure that one necessarily has 

to delay consideration of the next phases in Charleston while we are 

doing the evaluation in Louisiana. The funding issue is outside of my 

purview, you know?

The Chairman. I understand.

Mr. Moreland. My issue is to go down to New Orleans and get this 

first step in New Orleans started, and then I will certainly do that.

The Chairman. So with regard to Dr. Greenberg’s suggestion then, 

to formalize the initiative as a demonstration project, to appoint a 

working group that drills down into the next phase is what you are 

talking about, right, Dr. Greenberg?

Dr. Greenberg. Yes.

The Chairman. Is that what you mean by this?

Dr. Greenberg. Yes, sir.

The Chairman. To develop the implementation plan. So, Mr. Moreland, do you concur, that we can do that while you are also then 

drilling, because you are replicating.

Mr. Moreland. What I am suggesting is, is that the Charleston 

project has been sent to the Secretary’s Construction Advisory Board. 

Depending on what happens at the end of that process, what Dr. 

Greenberg proposes may be very appropriate to proceed independent 

of New Orleans. But that depends on what happens at the Secre-
39

tary’s CAB.

The Chairman. Well, I want you to help us here. I mean you are in 

a very unique position. You are going to give counsel to this Committee. You give counsel to the Secretary. You are sitting in the hot seat 

between Charleston and New Orleans. New Orleans has the priority 

in the country and they are two of five to be built. So I am going to 

drill this down.

Your counsel to us would be that this Committee should embrace 

the suggestion of Dr. Greenberg as we continue to the focus on New 

Orleans. If I have missspoken, correct me.

Mr. Moreland. I would say that the Committee report that we provided to the Under Secretary has been forwarded to the Secretary -- 

The Chairman. Oh, no, no, no.

Mr. Moreland. And they need to provide their -- I am not really in 

a position to recommend what happens with Dr. Greenberg’s proposal, because that is really outside of my scope. What I am focused very 

much on is evaluating opportunities for collaboration and putting 

that discussion together so we can then move that analysis forward.

The Chairman. All right. I know you don’t want to get out of your 

lane. Your testimony, though, to us is that it is possible to do both of 

these at the same time, right?

Mr. Moreland. Yes.

The Chairman. Okay. I have no interest of getting you in trouble. 

You are in a really unique position here for counsel.

Mr. Moreland. Yeah.

The Chairman. But I can read between the lines. Okay? Let me 

yield to Chairman Brown, for questions he may have.

Mr. Brown of South Carolina. Mr. Chairman, let me apologize 

first to the panel. We have a bill on the floor. This is close to my 

heart, and I had to go make testimony there, and I apologize for not 

having the complete dialogue, but I really do appreciate you coming and being a part of the first panel. You had privy to that, that 

dialogue, too, and, Mr. Chairman, I know that you have asked some 

good leading questions, and I don’t want to go into part of duplicating 

those questions, but I know that I just would like to thank the whole 

group for working.

 And, Dr. Greenberg, I don’t know whether anybody has asked this 

question or not, but which model include in the final report as MUSC 

identified as being the most viable?

Dr. Greenberg. Chairman Brown, I think they are all viable in a 

sense. I think it is very difficult for someone sitting outside of the appropriation process to ask the question what is a reasonable investment to make because there clearly are resource differences.

I think when one makes that appropriation decision, I hope the focus -- inevitably I understand the political realities of having to look 

at how much is spent in a particular year. But the reality is what I 
40

learned in this process, and I would not have guessed till we got into 

the analysis is that if you look over the long haul, the cost differential 

is really relatively minor between these, and so I would hate for that 

to be the deciding factor between them.

Personally, I think that the model, I think it is described as A-1, 

in which the VA builds its bed tower, plus the shared resources, and 

the medical university builds its separate bed tower, probably is the 

most logical way to proceed as long as you can coordinate the construction.

But I do think a significant open question at the moment is what 

security standards the VA facility will have to be built to because the 

estimate, and it is only an estimate at this point, because no facility 

has yet been built to those standards, is that it will inflate the cost 

about 30 percent, and so that would shift you towards having another 

party build that shared component and save the differential in cost.

So I think that question does need to be answered and I realize that 

there are other considerations involved in answering that question. 

But it is hard to give a final answer without knowing.

Mr. Brown of South Carolina. I know this past Friday I met with 

the City of Charleston, concerned about just normal flooding when 

there is high tide and, you know, abnormal -- little abnormal -- rainfall, and I know that the VA Hospital is actually sitting in the middle 

of that, you know, that problem. And so I am just amazed that, you 

know, seems like something must be done. If in effect we had anything close to Katrina, that the, you know, the Veterans’ Hospital 

would be really in serious trouble and I don’t know whether that is 

being evaluated as we look at the, you know, the overall need to address, you know, some modification, and so I know it is a major -- a 

major problem is the drainage problem and -- 

Dr. Greenberg. Well, it is an important question because the GAO 

has studied the state of the existing facility and they said it is, you 

know, in adequate condition. It doesn’t need immediate replacement.

But that same conclusion might have been reached in the VA facilities in New Orleans before Hurricane Katrina. I mean all it takes is 

one extraordinary adverse event to completely destroy the facility. 

We have seen that. So just as in all aspects of medicine, I think we 

have to focus as much on prevention as we do on treatment after the 

fact, after the disease has already taken place, in this case the natural disaster.

We need to do everything we can to bring the facilities up to speed 

in New Orleans, but we also need to make sure that we don’t find 

ourselves in the same position in other communities that had just 

the same level of exposure in the future. We don’t want to be dealing with the same kind of reality that Mr. Smithburg is dealing with 

right now.
41

The Chairman. Will the gentlemen yield? Your hospital, is it at sea 

level or how many feet above sea level is your hospital?

Dr. Greenberg. The new hospital is raised 15 feet off the ground, 

plus it has gone through extensive hurricane testing. There is a facility in Florida where they shoot projectiles at it at 200 plus miles 

an hour. So it has been rigorously tested to withstand this kind of 

storm.

The Chairman. Mr. Moreland, do you know whether, the VA Hospital in Charleston is at sea level?

Mr. Moreland. I don’t recall. I know that in our evaluation, we 

did look at that, and I also am aware that when -- that VA is in the 

process of evaluating hardening of VAs in coastal areas that are in 

danger of hurricane and flood damage.

The Chairman. All right. Thank you. Mr. Brown.

Mr. Brown of South Carolina. You know, I don’t know exactly the 

sea level yardstick, Mr. Chairman, but I know it is -- just visibly, it is 

a good bit lower than the facilities being built by the Medic University. And like I said, I met with those people on Friday. The whole 

region down there, and across town and Cannon and Spring Street 

are all impacted by this flood problem.

But, Mr. Smithburg, if I could ask you a question. I know we had 

the privilege to go down with the Secretary to take a look at New 

Orleans and Biloxi and Beaumont. But can you describe LSU’s relationship with Charity Hospital in New Orleans, and how will Charity 

play into the collaborative project envisioned by LSU and VA? I know 

they are all basically all there together in the same block.

Mr. Smithburg. First I would say by way of governance structure, 

the Charity Hospital System is LSU. It has been for centuries branded. The hospital system has been branded informally as the Charity 

Hospitals, but it is LSU, a State-run, land-grant institution.

In terms of the collaborative that we have envisioned, it is really 

building upon a set of relationships that have been in place for a long 

time as you know, having toured the area. Near the Super Dome 

downtown, there is a medical district that is comprised of the VA, 

LSU, all of its health sciences schools, Tulane University, all of its 

health sciences schools, and the Delgado Community College and its 

health sciences training programs, and I am sure I am leaving somebody out inadvertently. We are a true medical corridor if you will.

What we have preliminarily discussed, and it is still very early in 

this potential marriage, but what we have discussed so far is a collaborative where, since the VA needs to place itself, it has determined, 

we clearly determined have that there will be some real synergies in 

doing some things together like one common power plant, maybe one 

common cafeteria, other hotel-like functions that we might be able to 

collaborate on together, but at the same time, not necessarily having 

to deal with formal governance issues for the VA has a very rock solid 
42

governance structure and we think we do on the LSU State side.

So this is the beginning of a journey where we want to explore opportunities for collaboration, and it could get much deeper, penetrate 

much deeper in terms of integration collaboration, or not, depending 

on what makes the most sense.

Mr. Brown of South Carolina. And one further question. I know 

we have talked about this before, and I know the population base 

in New Orleans is you live someplace else, and it seems like to me 

it would be pretty difficult to track the patient demand in the near 

future, and I don’t know whether you can project it into the distant 

future or not, but at this point in time, what kind of model would you 

develop, based on limited information?

Mr. Smithburg. Thank you, Chairman Brown. That is an excellent 

question, and it is very difficult to crystal ball the future population 

of New Orleans proper, but there are some that would expect that the 

population may not be localized as it was before, kind of inside, below 

sea level, inside the soup bowl, but a ring of new suburbs that are 

above that area, yet New Orleans will continue to thrive as a cultural 

and industrial center. It just won’t have as many bedroom communities inside the donut, if you will, but outside of it.

Who knows? But this we expect, whatever it is we design, it will 

need to be scalable. I also am responsible for other markets in the 

State and have seen a real population surge in Baton Rouge and Lafayette, and our public hospitals there have seen almost a doubling in 

their patient population.

 What that tells us is that a lot of people are staying in State, and 

we know that there is a very strong desire for New Orleanians to get 

back home whether the levees are replaced or not. We think that 

people are going to come back home.

 And so whatever it is we design and build, as Dr. Greenberg alluded to with his institution, it will be hurricane hardened and it will 

be flood proof and will have a connection to a flyover interstate that 

is already adjacent to our medical center. But scalability is what is 

top priority for us, whatever we build. Easy to say, not so easy to do, 

but it needs to be able to flex up or flex down, depending on what the 

population will bring to us.

Mr. Brown of South Carolina. If you had to make this projection 

today, I think the population around New Orleans is what, around 

600,000 -- 

Mr. Smithburg. In the parish itself.

Mr. Brown of South Carolina. Right. And now it is less than 

200,000 I believe.

Mr. Smithburg. Yes, sir.

Mr. Brown of South Carolina. And with those numbers, you know, 

do you think it is going to take you three years or five years to get 

back to the 600 or -- I guess my question is, I am trying -- I am not 
43

trying to lead you into some decision that I want to hear, but I guess 

my question is, is the location where the present hospitals are today, 

is that the best location for the next 10 to 20 years?

Mr. Smithburg. It is a very good question, one that we want to 

study through this process. This I will tell you. There are hundreds 

of millions, if not billions, of dollars of investment in facilities already 

on the ground in the medical school, the research facilities, same with 

Tulane, that are okay, relatively speaking. Okay to us means we can 

get back in them in a year.

And so that investment is there and so to relocate our hospitals to 

another geographic location will have some -- that decision will have 

some bearing on how we look at ourselves as an academic institution. 

And proximity to our researchers who use our hospitals extensively 

and to our training programs who staff our hospitals primarily is an 

important factor to take into consideration. That is why hurricane 

hardening and flood-proofing is absolutely essential if we stay where 

it is we are going -- we have been traditionally.

Mr. Brown of South Carolina. It appeared to me that the hospital 

itself was structurally sound. But I know there is probably some 

mold and some other problems. Do you plan to raze that hospital and 

start over? Is that part of the plans? Or do you plan to try to save 

some of the structure itself?

Mr. Smithburg. The two buildings, primary hospital buildings, one 

is called Charity Hospital and one is called University Hospital. In 

the case of Charity Hospital, extensive engineering reports have been 

conducted and they show that the building is absolutely unsalvageable for healthcare use. Maybe there is some other reuse.

But the damage to the mechanical, electrical, plumbing and energy systems is pervasive. The extent of black mold and other molds 

which you may not be able to see in the naked eye permeates 21 stories of HVAC systems and the like, extensive damage, because we 

were under water for three weeks, and concerns about the stability of 

foundation. It is a very old building.

And so we do not necessarily intend to raze that building at this 

time. Frankly, it is an art deco kind of icon of architecture in the 

community, greatly loved, and so if there is a reuse for the facility, we 

are open for that.

But razing it is not necessarily on our radar screen right now. But 

there are other sites on the campus that we have already identified 

that would be ideal, we think, for a major medical center.

Mr. Brown of South Carolina. Thank you, Mr. Smithburg, and 

thank you, Mr. Chairman.

The Chairman. Thank you, Chairman Brown. Dr. Greenberg, I

want you to think about this, and I am going to do a unanimous consent. I want you to think about -- I am going to ask you a question 

in a little bit on if I were to do this demonstration project as we move 
44

from the macro to micro, what are the principal areas which you are 

considering?

 So I want you to think about that for a moment, and I ask unanimous consent that minority counsel be recognized, ask questions on 

behalf of the minority. Hearing no objections, so ordered. The gentleman is recognized for five minutes. Counsel for the minority.

Mr. Tucker. The GAO report, or I should say the GAO testimony 

from September 26, 2005, offered a hypothetical. VA may decide to 

purchase operating room services from MUSC. If the sharing agreement were dissolved at some point in the future, it would be difficult 

for VA to resume independent provision of these services. Mr. Moreland how do you, working through these study groups, plan on addressing these issues? They would seem to be very difficult.

Mr. Moreland. That was one of the basic concepts that we tried to 

put into place in this study group was that, you know, what happens 

and how do you set up a situation so these sharing agreements don’t 

end up that one party can take advantage of the other.

And so essentially what we did was build in, I think we called it 

mutual dependency, so that if MUSC is running the operating rooms, 

hypothetically, and the VA is providing laboratory services, there is a 

built-in incentive for MUSC to have a good working relationship with 

us in the operating room because they need to have a good working 

relationship with us in the laboratory. So that was the basic premise, 

that in order to set this up so that one party would be fair with the 

other.

Mr. Tucker. Thank you very much. Also, you state in the December report, Mr. Moreland, also Dr. Greenberg, that under Model “A” 

that was proposed that there was a need for legislation. Can you be 

more specific on what legislation you think might be needed?

Mr. Moreland. I was looking for my counsel.

Mr. Tucker. I think it is looking at 38 USC 8153, which is a sharing agreement provision, that there was just -- I noted in reading the 

report that it said that you recommend legislation. So I was curious 

as to what that legislation might look like.

Mr. Moreland. I don’t think we proposed legislation. I think what 

we did was we proposed that there would be an issue that would 

require legislation, but we did not get to the point of actually developing what that legislation should look like.

Mr. Tucker. So you haven’t actually got to that point of specificity 

yet?

Mr. Moreland. Correct.

The Chairman. Is that what Phase 2 is about?

Mr. Moreland. That would be part of a Phase 2, yes, sir.

Mr. Tucker. Also let me ask you again, Mr. Moreland. I am sorry 

that you seem to be the one I keep asking questions of. You state in 

your testimony that previous collaborative arrangements are a “good 
45

financial deal for veterans,” how the funds saved through these collaborations support other service enhancements.

Can you really offer explicit examples of these service enhancements? It is held out as one of the promises of collaboration that 

money will be saved. The VA will save resources. But where do these 

saved resources go -- do they disappear in a hole? Is there any really 

specific examples of how these things have worked out in the past 

and as a model for the future?

Mr. Moreland. Yes. And if it is all right, I will use the one that was 

really the simplest, because I think that is the easiest one to provide 

a good answer to your question.

When I was the director of the VA in Butler, I needed a CAT scan. 

And in evaluating how much it would cost to purchase a CAT scan 

and put it in my building and hire the staff to operate that CAT scan 

and the cost of the service agreement for maintenance of that CAT 

scan, I calculated how much it would cost to do that.

Then I sat down with the CEO of the community hospital, who also 

wanted to upgrade and buy a new CAT scan. And I was currently 

purchasing from him CAT scans. And so when I sat down and did 

the math comparison, what would it cost if I put one in my building 

and ran it, what would it cost if I just keep buying them from the 

community, and what would it cost if I were to purchase a CAT scan, 

place it in his building, have him operate it and give the CAT scans 

with interpretation from me, one dollar each.

When you sit down and did the math, I ended up it was much 

cheaper to put that machine into his building. What that did then 

was that my operating budget was reduced. Now could I track where 

that dollar went? No, sir, I could not. 

What I could track, though, was that I treated another veteran. I 

provide more medication. I then turned around and enhanced my 

nursing staff on my inpatient unit for my nursing home. So I could 

point to what did I do with that money, and it did go back into enhancement of services.

Mr. Tucker. Thank you very much. Also just a general question 

on the tomotherapy suite, the $7 million piece of equipment. I understand that it is not available anywhere in South or North Carolina. It 

sounds very interesting. What is the track on this? How is it moving 

forward? Have you worked out arrangements, because it is not available to make it available to other facilities and how do those arrangements work legally?

Dr. Greenberg. First, let me say that it wasn’t available at any 

other facility at the time of this report. I can’t tell you whether it is 

today or not. It is a new emerging therapy and it is basically radiation therapy that can give and be given very precisely so that what it 

does is limit the damage to normal tissue around the cancer that you 

are trying to irradiate. So it is much more precise targeting of the 
46

cancer; and, therefore, it really is a huge step forward in the advancement of such treatment.

 When you look at it from the VA point of view, they don’t have a 

large enough patient population to justify purchasing this equipment 

for their own patients, and I am not sure if even in the vison there is 

available. So it is not even a question of the distance that someone 

would have to travel to access it.

At the Medical University, we would probably have the volume. 

We would probably purchase this on our own, but this is an opportunity to, it strikes me, to benefit the veterans population at the same 

time we would be installing this for our own use.

Of course, we see ourselves as a referral area for the entire State 

and so it would, of course, be a resource through our operation of it 

that would be available to patients throughout the State of South 

Carolina.

Mr. Tucker. Thank you. One more question, Mr. Chairman? 

Thank you for your indulgence.

 Adding on to that, I think one of the problems that some have in 

addressing or looking at collaboration efforts is whether veterans get 

priority and how that priority works out, especially when you are 

dealing with a population that may have a more -- I don’t know -- 

fundamental legal contractual obligation for their healthcare - they 

buy insurance or they have some sort of provider relationship with a 

university hospital.

 Have you worked the details out in how that has worked out?

Dr. Greenberg. As a general principle, we have certainly said that 

this does not make sense to go forward in a sharing relationship if 

veterans are treated as anything other than first-class citizens. I 

mean the goal is to make sure that they have at least the access they 

have now.

I would actually argue this increases their access because what it 

does it bring specialists and special equipment that they don’t otherwise have access to in the local marketplace. They might if they went 

to Atlanta or somewhere else.

So to me, and when we sat down and talked with local veteran service organizations, they quickly have appreciated the fact that this 

brings more opportunity to them rather than a limited opportunity.

Your question, I think, leads us immediately, though, to the implementation questions. How do you monitor that you are actually doing that, and I think that really is the next phase. We didn’t get to 

that point in our initial descriptions, but I think there would have to 

be some accountability; and, of course, this is all becoming now automated, so it would be fairly easy on a regular basis to review waiting 

times for VA patients versus non-VA patients, and I personally would 

be dissatisfied with the outcome if we found that there was any differential between the two patient populations.
47

The Chairman. Mr. Moreland, could you also respond to this question?

Mr. Moreland. Yeah. That is part of the agreement that is set up 

in the contract which essentially says this piece of equipment continues to be owned by the VA. It is just in your building. You are operating it. And the university gets benefit and non-veterans and the VA 

gets benefits and veterans.

 But essentially the time line standards are part of the negotiations, 

so that I know that if refer a veteran into that machine -- and I use 

the example I gave you earlier in Butler as an example -- if I refer a 

veteran there, I expect them to get seen quickly. And you can identify 

that by the number of hours and the number of days, and you monitor that. 

And I just have found that if you do that and you provide that 

feedback, there is no interest in that not working well, because Dr. 

Greenberg doesn’t want that to not work well and nor do I. And so I

don’t think that will be really an issue.

And I agree with you. It meets all the tenets. It increases access because currently veterans don’t have access to that machine 

in Charleston. It enhances quality because you have access to that 

machine, and at the end of the day, it is going to be a financial good 

deal. It meets all three components of what we are trying to do, so I 

think this is an example of a win/win for everybody.

Mr. Tucker. Thank you, Mr. Chairman.

The Chairman. I thank the minority counsel for the questions, because you are going right to the heart of it. If the university builds a 

bed tower and the VA builds a bed tower, and then on the inside you 

share some of is medical equipment that then escalates the quality of 

the care, veterans are going to want to make sure that they have the 

access. They are treated like they would be treated in a VA hospital, 

and so your question went right to the heart of it. So I appreciate 

the gentleman’s question, and I appreciate the answers you have just 

now given.

I think where we are, Mr. Brown, is as you develop your construction budget, we are going to need to be some very good listeners here 

with regard to how we handle this, meaning where are we with regard to Charleston and the Collaborative Working Group? What does 

Phase 2 mean? And what is this fast track now that Mr. Moreland 

had to do with regard to New Orleans?

 So to help us in this, Dr. Greenberg, help me -- help the Committee 

-- sort of define what is a Phase 2? If we move to a demo, what do 

you have in mind, and I am also interested in your counsel to us, Mr. 

Moreland.

I don’t mean to jump ahead of where you would go, Henry, in your 

own Subcommittee, but we have an opportunity here.

Dr. Greenberg. Well, Mr. Chairman, one of the things I would like 
48

to do, and I say this as a tribute to Mr. Moreland, is sit down with Mr. 

Moreland and map out what a charge would be. I think the first -- the 

obvious thing we need to do is clone Mr. Moreland, because he clearly 

needs to be in two places at the same time.

The Chairman. Can you also include a time line of expectency in 

your accounts you are about to give? I think it will sort of helpful 

to us and whatever overlay there will be with regard to actions also 

taken with Louisiana.

Dr. Greenberg. To me the principal issue is that we identified opportunities for sharing, and the good news on that was that there 

was agreement on both sides clinically about what the things -- what 

services -- are the targets for sharing.

But beyond doing that, in doing some costing of construction, we 

really haven’t gotten in at all to the operational issues. And so what 

I think we would need to focus on, just as categorically, would be looking at moving towards implementation.

How would you actually operate this, not just build the shared facility, but on a day-to-day service of these, of the clinical service involved, how would they be operated?

To the best of my knowledge, the working group on clinical integration really just scratched the surface. They made considerable 

progress by identifying the category of services that might be shared, 

but not how they would actually be operated. And to me that really 

is the fundamental question.

 I think six months is a reasonable period of time to do that. You 

always seem to have a faster time track than I do, and that probably 

is good, because it keeps us accountable and as productive as we can 

be when you set time frames for us. But I think that these are moving to fairly complicated questions about how things would operate 

clinically and I think six months is probably a reasonable time frame 

for that.

I would hope that in parallel with this, we get answers to the questions about the security standards issue and some direction about 

the magnitude of investment that is reasonable for us to be thinking about so that it directs us towards an appropriate model. It will 

clearly be a model of sharing, but as of yet, we don’t really know exactly how much should be shared. And so I don’t want for us to work 

in isolation of the thought process about what is a reasonable fiscal 

investment to be made.

The Chairman. Mr. Moreland.

Mr. Moreland. I was thinking about the traditional way a project is developed to get into the process of from concept to design to 

construction. And, you know, what I think we provided is a basic 

concept. Really the next step is design and generally one looks at 

the estimated construction cost and then assets. That is a number of 

about 10 percent. And then estimated project as to what it would cost 
49

to then go into the next phase which is called design.

And in that design process, I recently participated with an architect that has done some really interesting work called the FATHOM, 

and I don’t remember what all that acronym means, but essentially 

it is sitting people in a room together and designing what that work 

space should be like in the future, not the way we have done work in 

the past.

And I hear what Dr. Greenberg describing really is that kind of 

process, and that generally is accomplished in the design process. So 

what I am suggesting is opposed to having a work group, one might 

think about moving it to that next step, which is more of an official 

step which is the design process. That is just explaining the natural 

progression of construction projects.

The Chairman. Can this be, if we were to say instead of doing 

the demo actually, Dr. Greenberg, what Mr. Moreland has just said 

trumps you big time, because what he just said has just advanced 

this so far you ought to just hug him right now.

Dr. Greenberg. That is why I like him so much.

The Chairman. If we were to say, if we were to scrap your idea on 

a demo, and actually go to plan and design -- let me just ask this, 

though -- in a planning phase, we would need to put in some language, I would think, we would need to put in some exact language, 

helping to define what that Phase 2 is, because what we want to be 

able to do here is replicate.

 So if we are going to make this investment to examine all these 

clinical areas, with integration for a successful operation, you want to 

be able to say, okay, we have made an investment. We are proceeding 

to do this in Charleston, but guess what? I am able to use our investment with what I am about to do in New Orleans too, right, because 

-- help me out here. I am not -- 

Dr. Greenberg. I think you are headed in a direction that I hope 

the conversation would move in, which is I think it is a mistake to 

look at the situation in New Orleans and the situation in Charleston 

as being in conflict with each other.

The Chairman. I don’t see them in conflict. We just have two different time lines.

Dr. Greenberg. Right. I suspect much of the work that would be 

involved in the design phase would have utility in both New Orleans 

and Charleston. There are some things that would be specific to a 

particular geographic configuration. But many of the operating principles would be largely the same.

Now it gets even more complicated if you got three parties at the 

table, but I just think it is an opportunity for us to think about taking 

this to the next level, especially if it involves a significant investment 

as Mr. Moreland has suggested.

In thinking about those principles that span not just these two fa-
50

cilities, but hopefully would inform us in Las Vegas and Orlando and 

other places that one might be considering the same kind of thing. 

We don’t have to reinvent the wheel uniquely in every geographic 

location. We should look at a model to the extent possible that can 

be replicated in each of these settings with the understanding that 

there is always going to be some element of difference between the 

individual settings, but the more that we can make that can be transported from one setting to another, the more efficient the whole process will be.

The Chairman. I concur. Consider the exporting of this model, let 

us take Ms. Berkley’s district for a second in Las Vegas. She has 

tremendous challenges because this is a population growth unlike 

anyplace in the country. And so what is plan and design today, by 

the time you get it built may even be obsolete. I mean her challenges 

are remarkable.

 So she has an immediate need while at the same time, you have 

got this desire of a chancellor to build a medical university, but guess 

what? It will be on a different time line, too, right, because there is 

a tremendous amount of funding required to pull something like that 

off.

But if we know what the model is as they construct it, something 

can be partnered for it at some point in time. And that is what we 

also want to be able to be receptive to with Orlando. If Orlando or 

the State of Florida has an interest in putting the medical university 

there, then we want to be able to build a facility that is receptive to 

that.

 So, different than LSU, you have the property, right, and as I understand, you want to be able to say to the VA, we have property. We 

are interested in the collaboration, and we want to be able to build 

this together, and work it out together, right?

Mr. Smithburg. We have some of the property.

The Chairman. So -- pardon?

Mr. Smithburg. We have some of the property and designs on the 

rest.

The Chairman. Okay. All right. So it is called the most flexible 

model ever? You know what? The Charleston Model is appropriate, 

because Charleston is, you know, a pretty loving city, a caring city. 

We are exporting your love.

Chairman Brown, we will allow you to close.

Mr. Brown of South Carolina. Mr. Chairman, I just would like to 

thank you for your interest and innovation and energy that you have 

put on this project, and Mr. Moreland, Dr. Greenberg, Mr. Smithburg, we are grateful for your energy that has been expressed today, 

and our whole commitment is to provide better healthcare for our veterans and our population as a whole and I think this is a win/win.

And certainly I am like Dr. Greenberg. I don’t see a conflict be-
51

tween Charleston and New Orleans. I think it is certainly a complement to each other, and I think by moving them both the same time, 

but certainly I think would have some numerical economic savings, 

too. So I thank you all three for being here and being part of this 

discussion. And thank you, Mr. Chairman.

 The Chairman. Thank you, Mr. Chairman. We as a Committee, 

want to remain sensitive right now with regard to construction time 

lines across the country, because they all have their own time lines, 

and they all get really sensitive. Oh, my gosh, you got money for this 

one. Are we less a priority, and that type of thing. We just want to 

get these things built. We want these hospitals built.

We are going to embrace the suggestion from both of you. A demonstration project, or do we really go to plan and design, or a hybrid 

thereof? And so we will take that to the next step. We will work 

with each other on how to define this properly and so when we put 

together our construction budget, I think that will probably be the 

best way to handle it. Do you agree?

Okay. Thank you very much for coming to town and really congratulations to you. This hearing is now concluded.

[Whereupon, at 5:50 p.m., the Committee was adjourned.]

 
(52)

APPENDIX
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Congressman Tom Udall (NM-3)

House Veterans Affairs Committee

Oversight hearing on Improving Access to Quality Care through 

Collaboration with Affiliated Medical Institutions and the Department of 

Defense and the Operation of Integrated Medical Facilities

March 8, 2006

Mr. Chairman,

I would like to welcome today’s witnesses and thank them for their testimony. 

Enhanced collaboration efforts by the Department of Veterans Affairs (VA) are 

complex in nature, as all of you have testified. Both of the experiences in New 

Orleans and Charleston offer snapshots that we should examine and take into 

consideration when trying to understand how this can and should work.

While VA collaboration efforts with the DoD or another entity can result in 

improved access of services for veterans, cost savings, and increased efficiency, collaboration will result in numerous, complex questions that must 

be answered. Put another way, it often raises more questions than it answers. 

Issues of ownership, legality, planning, and healthcare are simply a few of the 

broader questions. More specifically are questions of how collaboration will 

affect a single state or a single district or a single facility – and most importantly, a single veteran. Entering into complex collaborative efforts must be 

undertaken with caution, with foresight, and only after all questions have been 

addressed. Without taking due time to explore this issue, the VA will enter into 

situations fraught with ill-advised and unwanted consequences.

I do believe that many of these questions can be addressed, but we must ensure 

that collaboration by the VA fundamentally protects our veterans, and ensures 

that their needs are being met along each step of the way. Thank you again to 

today’s witnesses.

Thank you, Mr. Chairman.
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