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[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]

                THE U.S. DEPARTMENT OF VETERANS AFFAIRS

                     FISCAL YEAR 2008 HEALTH BUDGET

=======================================================================

                                HEARING

                               before the

                         SUBCOMMITTEE ON HEALTH

                                 of the

                     COMMITTEE ON VETERANS' AFFAIRS
                     U.S. HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                           FEBRUARY 14, 2007

                               __________

                            Serial No. 110-2

                               __________

       Printed for the use of the Committee on Veterans' Affairs

                     U.S. GOVERNMENT PRINTING OFFICE

34-304 PDF                 WASHINGTON DC:  2007
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                     COMMITTEE ON VETERANS' AFFAIRS

                    BOB FILNER, California, Chairman

CORRINE BROWN, Florida               STEVE BUYER, Indiana, Ranking
VIC SNYDER, Arkansas                 CLIFF STEARNS, Florida
MICHAEL H. MICHAUD, Maine            DAN BURTON, Indiana
STEPHANIE HERSETH, South Dakota      JERRY MORAN, Kansas
HARRY E. MITCHELL, Arizona           RICHARD H. BAKER, Louisiana
JOHN J. HALL, New York               HENRY E. BROWN, JR., South 
PHIL HARE, Illinois                  Carolina
MICHAEL F. DOYLE, Pennsylvania       JEFF MILLER, Florida
SHELLEY BERKLEY, Nevada              JOHN BOOZMAN, Arkansas
JOHN T. SALAZAR, Colorado            GINNY BROWN-WAITE, Florida
CIRO D. RODRIGUEZ, Texas             MICHAEL R. TURNER, Ohio
JOE DONNELLY, Indiana                BRIAN P. BILBRAY, California
JERRY McNERNEY, California           DOUG LAMBORN, Colorado
ZACHARY T. SPACE, Ohio               GUS M. BILIRAKIS, Florida
TIMOTHY J. WALZ, Minnesota

                   Malcom A. Shorter, Staff Director

                                 ______

                         SUBCOMMITTEE ON HEALTH

                  MICHAEL H. MICHAUD, Maine, Chairman

CORRINE BROWN, Florida               JEFF MILLER, Florida, Ranking
VIC SNYDER, Arkansas                 CLIFF STEARNS, Florida
PHIL HARE, Illinois                  JERRY MORAN, Kansas
MICHAEL F. DOYLE, Pennsylvania       RICHARD H. BAKER, Louisiana
SHELLEY BERKLEY, Nevada              HENRY E. BROWN, JR., South 
JOHN T. SALAZAR, Colorado            Carolina

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Veterans' Affairs are also 
published in electronic form. The printed hearing record remains the 
official version. Because electronic submissions are used to prepare 
both printed and electronic versions of the hearing record, the process 
of converting between various electronic formats may introduce 
unintentional errors or omissions. Such occurrences are inherent in the 
current publication process and should diminish as the process is 
further refined.

                            C O N T E N T S

                               __________

                           February 14, 2007

                                                                   Page
The U.S. Department of Veterans Affairs Fiscal Year 2008 Health 
  Budget.........................................................     1

                           OPENING STATEMENTS

Hon. Michael H. Michaud, Chairman................................     1
    Prepared statement of Chairman Michael H. Michaud............    32
Hon. Jeff Miller, Ranking Republican Member......................     2
    Prepared statement of Congressman Miller.....................    32
Hon. Henry E. Brown, Jr., prepared statement of..................    33
Hon. John T. Salazar, prepared statement of......................    34

                               WITNESSES

U.S. Department of Veterans Affairs, Michael J. Kussman, M.D., 
  M.S., MACP, Acting Under Secretary for Health, Veterans Health 
  Administration.................................................     3
    Prepared statement of Dr. Kussman............................    34

                                 ______

American Psychiatric Association, Joseph T. English, M.D., 
  Member, Board of Trustees, Chairman of Psychiatry, St. 
  Vincent's Catholic Medical Centers of New York, Professor and 
  Chairman of Psychiatry, New York Medical College, and 
  Commissioner, Joint Commission on Accreditation of Healthcare 
  Organizations..................................................    17
    Prepared statement of Dr. English............................    40
Friends of VA Medical Care and Health Research (FOVA), Gary 
  Ewart, Director, Government Relations, American Thoracic 
  Society........................................................    20
    Prepared statement of Mr. Ewart..............................    45
Iraq and Afghanistan Veterans of America, Patrick Campbell, 
  Legislative Director...........................................    22
    Prepared statement of Mr. Campbell...........................    49

                       SUBMISSIONS FOR THE RECORD

American Federation of Government Employees, AFL-CIO, statement..    50
American Legion, Shannon Middleton, statement....................    52
American Veterans (AMVETS), David G. Greineder, statement........    58
Hon. Corrine Brown, a Representative in Congress from the State 
  of Florida, statement..........................................    60
Paralyzed Veterans of America, statement.........................    60
Hon. Cliff Stearns, a Representative in Congress from the State 
  of Florida, statement..........................................    63
Vietnam Veterans of America, John Rowan, Patricia Bessigano, and 
  Thomas J. Berger, joint statement..............................    63

                   MATERIAL SUBMITTED FOR THE RECORD

Post-Hearing Questions and Responses for the Record:
  Written questions for the record submitted to the VA follow:
    Hon. Michael H. Michaud, Chairman, Subcommittee on Health, to 
      Dr. Michael Kussman, Acting Under Secretary for Health, 
      Veterans Health Administration, letter dated March 7, 2007.    74
    Hon. Jeff Miller, Ranking Republican Member, Subcommittee on 
      Health, to Dr. Michael Kussman, Acting Under Secretary for 
      Health, Veterans Health Administration, letter dated 
      February 28, 2007..........................................    82
    Hon. Henry E. Brown, Jr., attachment to Hon. Jeff Miller 
      letter to Dr. Michael Kussman, dated February 28, 2007.....    87

 
                THE U.S. DEPARTMENT OF VETERANS AFFAIRS

                     FISCAL YEAR 2008 HEALTH BUDGET

                              ----------                              

                      THURSDAY, FEBRUARY 14, 2007

             U.S. House of Representatives,
                    Committee on Veterans' Affairs,
                                    Subcommittee on Health,
                                                    Washington, DC.

    The Subcommittee met, pursuant to notice, at 2:00 p.m., in 
Room 334, Cannon House Office Building, Hon. Michael H. Michaud 
[Chairman of the Subcommittee] presiding.
    Present: Representatives Michaud, Snyder, Salazar, Miller, 
and Brown of South Carolina.

             OPENING STATEMENT OF CHAIRMAN MICHAUD

    Mr. Michaud. We will begin this hearing. First of all this 
afternoon we would like to thank everyone for braving the 
little dusting of snow that we received last night and this 
morning to come here today. This is a very important issue.
    This will be the first of many hearings in the 110th 
Congress for the Veterans' Affairs Health Subcommittee. I would 
like to welcome my Ranking Member, Congressman Jeff Miller of 
Florida, and say that I look forward to working with you in a 
bipartisan manner as we deal with Veterans Affairs issues over 
the next couple of years. We have a lot on our plate, and I 
know that by working together, we will be able to accomplish a 
great deal this year.
    I would also like to welcome our first panel of witnesses; 
Dr. Michael Kussman, who is the acting Under Secretary for 
Health. He is accompanied by Joel Kupersmith, who is the Chief 
Research and Development Officer, as well as Dr. Katz, who is 
the Deputy Chief PCS Officer for Mental Health, and Mr. Paul 
Kearns, who is the Chief Financial Officer.
    The Veterans Health Administration is responsible for the 
health and well-being of our nation's veterans. There are no 
other agencies in government that will affect our veterans more 
than this agency. We have an aging veterans population. We also 
have a new generation entering the system, with unique needs 
like mental health, traumatic brain injury, and others from 
service in Iraq and Afghanistan.
    We are here today to learn if this budget can meet all 
these needs. The request is an increase of 6 percent over the 
last year's funding. We have heard from the Independent Budget 
group and from other veterans service organizations that more 
money is needed for veterans. This request includes increases 
in fees, and copayments as well. It also includes a cut in 
medical and prosthetic research that we will have to address.
    That being said, I believe that this request is a good 
starting point for us, and I think we can move forward to 
create a budget that we all can consider a success. And let me 
be clear. I do not measure success by the dollars spent or 
dollars saved; I measure the success in the number of veterans 
receiving the highest possible quality care in a timely manner. 
We look forward to hearing your testimony today, and having a 
frank discussion about meeting the needs of our veterans.
    [The statement of Mr. Michaud appears on pg. 32.]
    Mr. Michaud. And with that, I would like to turn to Ranking 
Member Miller, if you have an opening statement.

             OPENING STATEMENT OF HON. JEFF MILLER

    Mr. Miller. Thank you very much, Mr. Chairman. I have an 
opening statement that I would like to submit for the record. 
It is lengthy, but I do want to bring a couple things to the 
Committee's attention.
    First, congratulations on becoming the Chairman of the 
Subcommittee. I know that we will work together in a true form 
of bipartisanship. The only thing that would sound better would 
be if it was Chairman Miller.
    [Laughter.]
    We have already begun the dialogue, and I look forward to 
many good working times with you.
    Today we are on the floor debating a very important 
resolution, for those that support it and those that oppose it, 
but we also meet today to discuss some very important issues 
here that we need to talk about. I am pleased to say that the 
Administration proposes this year a record $36.6 billion for VA 
healthcare for fiscal year 2008. This is the largest amount 
that any Administration has ever requested, and it is a 6 
percent increase over the request for fiscal year 2007.
    Last year, this Committee uncovered weaknesses in the 
process that VA was using to develop its healthcare budget. 
This year's budget submission doesn't assume savings from 
management efficiencies that the U.S. Government Accountability 
Office (GAO) recently reported, did not materialize last year.
    The Administration requests $3 billion for mental health 
service, including $360 million to continue implementation of 
mental health initiatives that began in 2005 to address 
deficiencies and gaps in services. While this amount is 
substantial, last September, GAO reported that the VA had not 
used all its mental health funds that were allocated in 2005. I 
believe, as I am sure the Chairman does, that we must have a 
better handle on how much, and in what way the VA is spending 
its resources to meet the emerging demand for mental health 
services, especially post-traumatic stress disorder (PTSD).
    VA must plan for and fund those programs that have been 
identified as particularly relevant to the needs and 
requirements of our soldiers.
    Three years ago, the Capital Asset Realignment for Enhanced 
Services (CARES) Commission identified, and if I may, a point 
of personal privilege in my statement, the Florida Panhandle as 
underserved for inpatient care. In fact, it is the only market 
in VISN 16 without a medical center. The absence of a VA 
inpatient facility continues to be one of the biggest concerns 
to the over 100,000 veterans who live in my congressional 
district. Currently, many of these veterans have to travel to 
Mississippi for inpatient care. Bringing a full-service 
facility to the first district is something that we have been 
looking at for a long time, and I look forward to working with 
the Department in support of VA's overall capital construction 
program to address the issue of providing timely access to 
inpatient healthcare for veterans living in and around Okaloosa 
County, in the center of my district.
    In conclusion, I too want to say thank you to the witnesses 
for appearing today on such a blustery day outside, and I look 
forward to your testimony. I ask that my statement be included 
in the record, and yield back the balance of my time.
    [The statement of Mr. Miller appears on pg. 32.]
    Mr. Michaud. Thank you. Without objection. Dr. Snyder, do 
you have an opening statement?
    Mr. Snyder. No, I do not. Just a comment about whether it 
is truly blustery, or just plain cold.
    [Laughter.]
    Mr. Michaud. Thank you very much. So we will begin, Dr. 
Kussman.

STATEMENT OF MICHAEL J. KUSSMAN, M.D., M.S., MACP, ACTING UNDER 
             SECRETARY FOR HEALTH, VETERANS HEALTH 
     ADMINISTRATION, U.S. DEPARTMENT OF VETERANS AFFAIRS, 
   ACCOMPANIED BY JOEL KUPERSMITH, M.D., CHIEF RESEARCH AND 
  DEVELOPMENT OFFICER, VETERANS HEALTH ADMINISTRATION; IRA R. 
KATZ, M.D., PH.D., DEPUTY CHIEF PCS OFFICER FOR MENTAL HEALTH, 
    VETERANS HEALTH ADMINISTRATION; AND PAUL KEARNS, CHIEF 
       FINANCIAL OFFICER, VETERANS HEALTH ADMINISTRATION

    Dr. Kussman. Well, thank you, Mr. Chairman, and Ranking 
Member, and Dr. Snyder, good afternoon. I have submitted a 
written statement for the record. Sir, you did a very good job 
of introducing the panel so I won't go through that again.
    Mr. Chairman, let me begin by telling you how proud I am to 
be leading the Veterans Health Administration today. I firmly 
believe that if you are a veteran, you have a much better 
chance to receive the care you need in an expeditious and 
thorough manner from the VHA than any other healthcare system 
in the nation, or perhaps the world.
    I am not the only one who says that. In 2006, American 
Customer Satisfaction Index found that customer satisfaction 
with our system was higher than the private sector for the 
seventh consecutive year. Last year, Harvard University 
recognized the VHA's computerized patient records system by 
awarding us with their prestigious Innovations in American 
Government award. We recently received an award from the 
American Council for Technology, along with the Department of 
Defense, for our innovative ability to securely exchange real-
time medical records between our two departments. We are the 
best around, and we are working to be better.
    My written testimony discusses the details of the 
President's budget for veterans healthcare. Our total budget is 
more than 83 percent higher than the funding available to VHA 
for healthcare at the beginning of the Bush Administration. 
There are some who have said that our Department is or will 
soon be overwhelmed by the number of returning veterans we are 
seeing from Operation Iraqi Freedom and Operation Enduring 
Freedom. That is not correct. In 2008, we expect to treat about 
263,000 veterans of the Global War on Terror.
    This is only a small fraction of the 5.8 million patients 
we expect to treat overall in 2008. With the resources we have 
requested for medical care in 2008, our Department will be able 
to continue to ensure that servicemembers transitioning from 
active duty status to civilian life is as smooth and seamless 
as possible, and to continue our exceptional performance in 
providing access for all veterans to VA healthcare. We expect 
to meet our goals at 96 percent of our primary care 
appointments, and 95 percent of our specialty care appointments 
will be scheduled in 30 days of the date our patients want them 
to be scheduled.
    Another area in which VA's readiness has been questioned is 
in the area of mental health. The President's budget request 
includes nearly $3 billion to improve access to VA mental 
health services throughout the nation. These funds will help 
ensure that we provide standardized and equitable access 
throughout the nation to a full continuum of care for veterans 
with mental health disorders. Much has been made recently of 
the incidence of PTSD among OIF-OEF veterans. Thus far, 
approximately 39,000 veterans have received provisional 
diagnoses of PTSD in our hospitals and vet centers.
    But most veterans with mental health issues do not have 
PTSD. They have easily treatable problems related to their 
readjustment to civilian society after serving in combat. 
Mislabeling readjustment issues as PTSD may keep some veterans 
from seeking care, and paints a misleading picture of the 
likely effects of combat service. VA has the capacity to treat 
those veterans with PTSD, and those with readjustment 
disorders, and we will augment that capacity if needed.
    Suicide among veterans is another issue that has recently 
been in the news. VA recognizes that any veteran suicide is a 
tragedy, and we are committed to address the needs of veterans 
who may be at risk of taking their own lives. VA mental health 
professionals work with community providers and agencies to 
ensure that veterans in need are referred for care.
    Our vet centers, open to combat veterans from all wars, 
provide outreach to returning veterans, and encourage them to 
seek help if they are having difficulties in readjusting to 
society. By April, every VA hospital will be funded for a 
designated suicide prevention coordinator. They will work to 
identify veterans who have previously attempted suicide, and 
enhance their care. We are increasing the availability of 24-
hour mental healthcare, and we will soon hold a Suicide 
Prevention Awareness Day, to remind all VA employees of their 
responsibility to help prevent veteran suicide, and to increase 
their awareness of possible warning signs that might indicate a 
veteran is considering taking his or her own life.
    Our budget includes funding for the expansion of our 
services to severely injured servicemembers from Iraq and 
Afghanistan. Our four polytrauma centers have already been 
expanded to encompass additional specialties to treat patients 
with multiple complex injuries. Their efforts in turn are 
augmented by 21 polytrauma network sites and clinic support 
teams around the country, bringing state-of-the-art treatment 
closer to the injured veterans' homes.
    The budget also includes funding to continue construction 
of a new medical center in Orlando and completes funding for 
our Las Vegas hospital, provides funds to build new facilities 
in Pittsburgh, in Denver, and a spinal cord injury center in 
Syracuse, and an outpatient clinic in Lee County, Florida.
    Altogether, our fiscal year 2000 construction request will 
bring the nation's investment in improving our infrastructure, 
since the CARES report was issued, to $3.7 billion.
    Mr. Chairman, the President's requested funding level will 
allow VHA to continue to improve the world-class care we 
provide to veterans, especially those who need us the most; the 
OIF-OEF veterans, those with service-connected disabilities, 
those with lower incomes, and those with special care needs. I 
am proud to present it to you today.
    This concludes my presentation. Thank you.
    [The statement of Dr. Kussman appears on pg. 34.]
    Mr. Michaud. Thank you very much, Dr. Kussman.
    In your budget, again this year, you have requested 
increased pharmaceutical copayments from $8 to $15 for certain 
veterans. In comparison to previous years, when you have 
advocated an increase in pharmaceutical copayments, the 
revenues received would be treated as mandatory dollars instead 
of discretionary dollars. How many veterans do you estimate 
would leave the VA in fiscal year 2008 as a result of the 
enactment of the copayments? Second, is what discussion led you 
to decide in this budget cycle submission to deem these fees 
mandatory revenues instead of discretionary revenues? And 
last--and you can submit to the Subcommittee--if you could 
detail for the Subcommittee, categories built upon earnings; 
the enrollment fees and co-pays. Could you break out how many 
veterans are affected in those different categories?
    Dr. Kussman. Yes, Mr. Chairman, thank you for the question. 
There are three policy issues in this budget. One is co-pays, 
as you had mentioned, and those are tiered. That is a new 
thing, that has never been done before. And then the second is 
the pharmacy co-pay, and there is a third one that we can 
discuss as well.
    It is important to remember that these policies only affect 
people who don't have any service-connected disabilities. It 
wouldn't affect anybody who is one through six. It just focuses 
on the sevens and eights. And obviously, the difference between 
seven and eight is how much money you make. So, it starts at 
$50,000, and goes up to $100,000, I believe. And so, the issue 
was one of an equity issue that we have discussed in the past. 
As you know, people like myself and others who spent 25 or 30 
years in service to our country, when we retire, if we tend to 
use TRICARE, have to pay enrollment fees that are in the same 
ballpark of figures that we are talking about. And so the 
feeling was that somebody who didn't have any service 
connection and was using our system, it would not be 
unreasonable to expect some nominal co-pay of $250 a year, $21 
a month, I think it is, if you make $50,000 and tier it up to 
$100,000.
    So that was the thought processes behind it. But in the 
past, as you know, those initiatives are part and parcel of our 
budget. And we know that this is not a popular thing, and we 
know that when we have come to Congress, each time it has been 
not approved with that, and then that we were confronted with a 
deficit in the budget that had to be made up. In this case, our 
budget as requested is separate from this, and we believe that 
this was a fair way to look at it so veterans in general, and 
the budget, didn't get deficit.
    Mr. Michaud. And would you provide for the Subcommittee how 
many veterans are affected in each of the tiers? Because you 
came up with a dollar figure, so if you can provide that to the 
Subcommittee? How many veterans will be affected by this 
proposal, do you think, be dropped in all this?
    Dr. Kussman. Totally, if you look at uniques, not 
enrollees, but the people who are actually using our system--as 
you know, a lot of people enroll with us and then don't 
actually use the system, effectively at all. They keep it as a 
hip pocket, because obviously they are using some other 
healthcare system for their needs.
    Of the 5.5 million or 5.8 million that we expect to see in 
2008, I believe that the total number would be 111,000, of 
people who might choose to not use the system.
    Now, we have done some review of the types of patients who 
are sevens and eights, and particularly eights, who might not 
use the system. And 89 percent of them have another type of 
insurance. So those are the numbers that we looked at.
    Mr. Michaud. The enrollment fees do not start until 2009?
    Dr. Kussman. Yes. We don't think we could have the 
infrastructure ready and everything to start collecting that 
until October of 2009.
    Mr. Michaud. Okay, so this number is predicated on 2009?
    Dr. Kussman. Yes.
    Mr. Michaud. The long-term care issue; the average daily 
census level in nursing home care is 11,000. As you know, 
Congress passed legislation back in the 106th Congress, that 
would mandate it be maintained at 13,391. Does the VA plan on 
submitting another budget? How are you going to meet that 
obligation of the 13,391? Do you plan on not meeting it?
    Dr. Kussman. Sir, as you know, we have gone back and said 
that that was related to the Millennium Bill, that was 
established in 1998, I believe, that set where we were in 1998. 
And we believe that the types of care for long-term care have 
dramatically changed, emphasizing noninstitutional care. And 
for us to try to maintain 13,391 would not be effective use of 
our resources. More and more of our veterans want to be treated 
near where they live.
    And as you know, we have basically four ways of delivering 
care. One is in our bricks and mortar. One is in community-
based nursing homes. And the third is in State homes. And the 
fourth one, which is really the most rapidly growing one, at 
really 124-percent increase from 1998 to 2008, is 
noninstitutional care, to assist people in staying home and 
things like that, where they really want to be.
    And so we believe that we are increasing the total census 
of patients that are being provided for us. It is up 30 percent 
from 1998. But we also believe that we are putting them in the 
right place.
    Mr. Michaud. And if you had all the slots available? If you 
had the over 13,000 slots, would you be able to fill them 
today?
    Dr. Kussman. With the types of patients that we are 
emphasizing, people who have priority one, special needs, 
indigent, and others; we believe that we are providing that 
service for the people in the full spectrum of the beds that 
are in those four categories.
    Mr. Michaud. So if the beds were available, would you be 
able to fill them?
    Dr. Kussman. If we put those beds open in our own 
facilities, they would be adequately utilized, and that is what 
you are asking me, to go from 11,000 to 13,391? We don't 
believe that those beds would be appropriately utilized for the 
needs of our veterans.
    Mr. Michaud. Congressman Miller?
    Mr. Miller. Back to the co-pay, do you anticipate any 
increase in co-pays for fiscal year 2008 based on the medical 
consumer price index? I know we had one last year, do we 
anticipate one this year?
    Dr. Kussman. I think it would be overcome. I mean, we are 
going from eight to 15.
    Mr. Miller. You can strike that, that is not going to 
happen. I am talking about your annual review--it was seven 
dollars and then went to eight. Do you anticipate it going up?
    Dr. Kussman. I understand the question. No, because it is 
not part of the budget. We are not counting on any change from 
any of this, eight to 15, or anything else, because the budget 
stands for itself. We believe we will be able to provide the 
services with the budget as submitted.
    Mr. Miller. The 2006 GAO report on VA's budget formulation 
revealed that VA had underestimated the cost of serving 
veterans returning from Iraq and Afghanistan in fiscal year 
2006 in part because VA was not able to obtain sufficient data 
needed to identify these veterans from DoD. I have three 
questions, if I can give you all three of those, or I can give 
them to you one at a time.
    To what extent has VA improved the projections on demand 
for care for returning OIF and OEF veterans?
    The second question is, what challenges does VA continue to 
face in getting the data from DoD to identify these veterans? 
Is there a continued problem there?
    Lastly, does your budgeting process include the projection 
of the future long-term cost for treating OIF and OEF veterans? 
Example, mental health and rehabilitation?
    Dr. Kussman. We believe that, as you mentioned, our 
original projection was lower than it turned out to be. In 
2006, there were actually 155,000 OIF-OEF veterans who came in. 
We have learned from that. Our actuarial model is being 
perfected. The OIF-OEF people are new to the actuarial model, 
and so we have learned. We project that in this year, in fiscal 
year 2007, the total number of OIF patients will be 209,000, 
54,000 more than we saw in 2006.
    I can tell you that we monitor this on a monthly basis now, 
and that it is tracking quite closely, so we won't be surprised 
at the end of the year with a sudden influx or number that we 
weren't aware of. We have projected another 54,000 for 2008. A 
lot of this, as you know, will be driven by what happens in the 
war itself, and how many people are deployed, or not deployed.
    We put money against these types of veterans. In 2006, 
there were $405 million directed directly to the 155,000. In 
2008, it is $752 million against the 263. That is an increase 
of dollars at 86 percent, with what we project a 70 percent 
increase in individuals. So we are watching that very 
carefully, to be sure that we have an accurate assessment of 
the total number of new OIF-OEF that are coming in.
    As far as the second question, about getting info, we work 
very closely, and these numbers are coming readily to us, and 
we have a very good working relationship with DoD.
    As far as long-term care, as I mentioned, as far as mental 
health and things, there is still a small number of patients in 
the 5.8 million that we expect to see that most of the patients 
with mental health issues are what we hope will be short-term, 
not long-term issues, related to severe mental illness. Most of 
the people have readjustment reactions related to normal 
reactions to abnormal situations. But we will continue to 
monitor that, and put money against it as we need, for both 
that and any other kind of rehabilitation services.
    Mr. Miller. I will hold my questions, and let some of the 
other Members ask.
    Mr. Michaud. Dr. Snyder?
    Mr. Snyder. Thank you, Mr. Chairman.
    I have two lines of questions I wanted to ask about, and 
I'm sure, Dr. Kussman, you can predict the first one, that is 
this research issue that I get discouraged about. With this 
Administration, it seems like this issue never goes away. 
Secretary Gates was unaware, and said he was going to 
personally look into it, because it concerned him after we 
called it to his attention. But in the defense budget, the 
President's budget has a basic research cut of 9 percent, and 
an applied research cut of 18 percent. And that is, when you 
look at what the inflation rate may be for that kind of 
technological inflation rate, which I expect is a point or two 
higher than normal inflation rate would be in real dollars, 
even more than that. It just makes no sense as we are looking 
ahead to the military of the future, what our edge is, that we 
would be doing that.
    And we had this discussion when you were sitting at the 
table the other day with Secretary Nicholson. I just want to 
reiterate, I do not understand why at this time in our Nation's 
history, when you are dealing with an influx of injured 
veterans and veterans with a variety of different diagnoses in 
great numbers, we are not looking to perhaps dramatically 
increasing the amount of dollars coming out of your budget for 
medical research.
    I understand everything that you all say about, ``we are 
going to leverage those dollars.'' Well, I will accept the 
argument, okay? You put in more of your dollars, you can 
leverage even more dollars. The American people expect us to do 
this kind of research, to help our veterans, particularly our 
new veterans, but also our older veterans, with the kinds of 
illnesses they face, and the kinds of injuries they face, and 
rehabilitation they face.
    Are you all intending to revisit this number, which has 
essentially been flatlined for the past 4 years, in terms of 
the contribution coming from veterans' healthcare budget to 
medical research?
    Dr. Kussman. As you know, sir, we believe that there is a 
3.7 percent increase in the research budget this year, that 
includes both money from appropriated dollars, other government 
agencies, and the industry. With that, we have readjustment on 
how we spent that money, and projected that we are moving from 
a 48 percent to 59 percent of that total amount of money is 
geared toward issues related to OIF-OEF, such as TBI, PTSD, 
other mental health things, amputations, and things of that 
sort.
    Mr. Snyder. But my question was, why would you not want to 
increase your Federal dollar share, your VA Federal dollar 
share of research, so that you could leverage even more dollars 
at this point in our nation's history?
    I mean, the answer is you don't have a good answer. I mean, 
if I was sitting there I wouldn't have a good answer either. My 
guess is that you all probably advocated to do that and you got 
shot down, so maybe we will just leave it at that. But I think 
it is really hard to understand. But it is also consistent with 
what either the Administration or OMB has done to research 
budgets for the last several years. And I don't understand. I 
think it is very shortsighted. So maybe I will just leave it at 
that.
    I wanted to ask about the interface between DoD and VA. And 
I want to ask you the same question I asked Dr. Winkenwerder 
yesterday, but I won't tell you his answers until I hear your 
answers. And it is not like it is a trick question----
    Dr. Kussman. Thank you.
    Mr. Snyder. Yeah, that is right. My question was, you know, 
he was bragging on you all, and feeling like the two of you, 
between DoD and between military healthcare and the VA, that 
there has been progress in terms of seamlessness and some other 
joint--for want of a better word, ``joint-ness.''
    I asked him yesterday at our hearing, before the Military 
Personnel Subcommittee, what were the things on his list of 
things that he would like to see better between DoD and VA, or 
things that he is working on, or would like to work on? Tick 
off four or five things on your list of things that you think 
that you all ought to be working on, or that you want to see 
progress made on.
    Dr. Kussman. Thank you for the question. It is a very 
interesting one, and I hope I don't give an answer that is a 
diametrically different one than----
    Mr. Snyder. Well, if you do it just means instead of four 
items to work on, we will have eight items to work on, which is 
okay, too.
    Dr. Kussman. You know, I am retired military, and both on a 
personal and professional level, we have unprecedented 
cooperation with DoD and VA. We have put VA benefits counselors 
and social workers in 10 major transition points in the 
military health system. We have military active-duty people in 
our four major level one trauma centers. So we are working very 
closely.
    As far as the things that we need to improve on, as you 
know, we just announced recently the initiative to work 
together to get a single inpatient electronic health record, 
and I am very excited about that. And we will see hopefully 
some dramatic results of that in the not-too-distant future.
    One of the other things that we have been challenged with, 
and really in an unprecedented way, is working together to 
case-manage people who have multiple venues of care. The people 
who are leaving DoD, I am talking about the segment that have 
been significantly injured getting medically retired. They have 
options to use their TRICARE benefit, they can use the military 
health system, or they can come to the VA. And sometimes they 
use all three of them. And that has been a challenge, to be 
able to keep track of what is going on, as well as, you know, 
in an unprecedented way, the active-duty people, many of them 
are staying on active duty.
    But also, when they come to us, frequently they are still 
on active duty. We are not waiting for them to go through their 
PEB process. And so they frequently go back and forth; to VA 
facility, then they go back to a military facility, and come to 
us. And working together to make sure that nothing falls 
through the cracks, from a clinical perspective, on what we are 
doing.
    So those are the things that I would really want to 
emphasize in our partnering.
    Mr. Snyder. I will give you my summary of what Dr. 
Winkenwerder had as his four things, and you may want to pull 
the transcript, or you all have ongoing discussions with him 
anyway, and maybe just have you respond to them.
    Number one on his list was the electronic health record, 
that the work needs to be done. He specifically mentioned the 
inpatient, and the challenges that will be there. This second 
one, he thought there needed to be improved screening in 
followup on traumatic brain injury, in terms of following 
people after they get back, and have been around trauma, but 
maybe not in such a way that they realize that they have been 
hurt.
    And his third one was mental health issues. Again, 
transition. He said his experience is that people, when they 
get back, they may be so eager to get home they are just not as 
candid as maybe they think they ought to be, or want to be, and 
the transition following those folks. They may get a clean bill 
of health from them, but by the time they get to you, they have 
some issues. And he thought that there could be work done 
there.
    And his fourth one was joint procurement issues, joint 
market access. He thought you all could work together closely 
in terms of buying stuff.
    That is my amateurish summary of the four things he said. 
Do you have any response to or thoughts on any of those?
    Dr. Kussman. Yes, I would agree with those. I was looking 
at the things that are going on on a daily basis.
    TBI is obviously an important thing. Every war has its 
sentinel things that you look at. TBI is one of those. I think 
what we are learning is that it is more complicated than 
anybody thought, in a way that we all know what to do, and the 
VA has been a world leader in taking care of TBI. We all know 
what happens when somebody has a gunshot wound to the head, or 
significant TBI. The challenge is undiagnosed or minor TBI. And 
we are working particularly with the Army and the Navy, to look 
at ways of screening people for minor TBI.
    I mean, no one really knows what happens if you--whatever 
your full capability was, if--and it is related to boxing and 
playing football. You know, football players, they get 
concussions repeatedly, really are in the same category of 
things. And together, we are developing a screen that we will 
provide for everybody when they come back. We have a screen 
now, when somebody comes to us, who was in OIF-OEF, when they 
come--it could be for anything. When they go see their primary 
care provider, a drop-down menu alerts them and they have to 
ask certain questions related to PTSD. We are going to provide 
that same drop-down menu for TBI to ask the questions.
    As you know, there is no single test to determine about--
there is no x-ray or one blood test that you can do. The issue 
is to be sure that we do what we can, and help people maximize 
whatever capacity they have. So we are working together very 
aggressively on that.
    Joint procurement are things that we have always been 
working--we need to more aggressively do that, have joint 
purchases, leverage our buying capacity.
    Mental health is one that we have talked about a great 
deal. As you know, along that spectrum, whether it is a 
readjustment or PTSD, there are a lot of resources in-country, 
to try to talk with people as they develop it.
    But when they come back, as you know, particularly with the 
National Guard and Reserve, the American soldier is very smart. 
They know what to answer and what not to answer, and that if, 
you know, if you say ``yes'' to anything that is said to you, 
you are going to have to stay around for a couple more days 
versus being able to go home, they say ``no.'' And it is not 
only that they want to go home but, you know, as you alluded 
to, is that sometimes people with adjustment reactions or PTSD 
don't know they have a problem that early on, and they 
transition back because they are euphoric about coming back, 
and many of us have experienced that same thing; you come back 
and you just want to go home.
    And that is why we have initiated, with DoD, the Post-
deployment Health Risk Assessment, that is focused on the 
National Guard and Reserve--and they do it on active duty, but 
that is not a group that we are involved in--that takes place 
90 to 180 days later, to ask those questions again. We have 
been quite successful in that outreach. For the VA, we have 
hired 100 Global War on Terrorism counselors. Almost all of 
them are OIF-OEF veterans that worked with our vet centers. 
They go out to all the armories and things, going out and 
making sure that--asking questions. We work very closely with 
the State.
    So the outreach program to try to get people to understand, 
and make it easy for them to come in and get help--as you know, 
in our country there is a stigma related to that, and people 
generally don't want to come. And what we need to do is make it 
easy for them and nonthreatening to come in, so we can assess.
    It is clear that if you have symptoms related to PTSD, if 
you can get at it early and treat it, you can attenuate, if not 
eliminate, the long-term complications. So we are very 
aggressive about outreach. Sorry to be so long-winded.
    Mr. Snyder. One final question, and I guess no answer is 
fine with me if that is what you would like to do. Secretary 
Nicholson was talking prospectively about the electronic health 
record that you have--now, I go back to my VA training days, 
when we would have two-volume charts of handwritten notes, and 
they would be literally several inches thick, and how are you 
going to make a conversion over to an electronic health record?
    My question is, is there anything inherently different in 
the VA system in the transfer over to the electronic health 
record for inpatients, from the private sector? You know, a 
community hospital would also have a thick written record. Is 
there anything inherently different in making that transition 
to an electronic health record for inpatients?
    Dr. Kussman. Sir, do you mean nationally?
    Mr. Snyder. [Nods head affirmatively.]
    Dr. Kussman. We believe it is a state-of-the-art system. It 
has one weakness with it; it is MUMPS-based rather than Java-
based, Web-based, and we are in the process of re-engineering 
that. That will make it more easily compatible with what I 
believe Secretary Leavitt and the country is moving to, to make 
them be able to communicate more easily.
    Mr. Michaud. Thank you, and we will be having a separate 
hearing on TBI and mental health issues.
    Congressman Brown?
    Mr. Brown of South Carolina. Thank you, Mr. Chairman, and 
thank you, Mr. Under Secretary, for being here today. I know we 
had the Secretary come the other day, and brief us on some 
items; I want to commend you for your cooperation between the 
DoD and the VA on trying to make some things happen. In my 
district, we have an outpatient clinic which is a combination 
DoD and VA. And we also are trying to do some things to even 
further that combination of sharing of research, and sharing 
cost, and sharing patient load.
    And we have been working with the Medical University of 
South Carolina to try to get some joint efforts moving toward, 
you know, better service for our veterans. And I noticed, as we 
passed the construction bill last year we added some $36.8 
million in there for planning at Charleston. And I noticed in 
this budget that you have before us today, that nothing was 
included to continue that planning. And I was just curious, 
exactly where we are on that particular issue?
    Dr. Kussman. Thank you. As you know, it was an 
authorization. There was no appropriation with the dollars, and 
we are certainly still--we hope not too much longer--in our 
Continuing Resolution.
    But as you know, we are aggressively working with the 
University of South Carolina in Charleston. We have always had 
a great relationship with them and, as you know, with 
partnering and staffs interchange.
    The director of the veterans hospital is working with the 
medical school now, finishing up a very elaborate memorandum of 
agreement. What we intend to do is buy equipment, 
sophisticated--particularly radiologic equipment, that we don't 
believe that either one should alone as neither one would have 
the number of patients to fully utilize it. It will be on the 
campus of the University because of space issues with the VA. 
But we will pay for the equipment, and we will get the services 
of the specialists that are at the University, and they will be 
able to keep track of quid pro quo, get free services, if you 
will, from the University, at the same time as buying in a 
partnership.
    So we believe there is a lot of movement to that. The 
specific relationship, building a new hospital, is still under 
negotiation, as you know.
    Mr. Brown of South Carolina. And I appreciate you bringing 
that to our attention. I know that 95 percent of those doctors 
actually come from the Medical University, and I am grateful 
for that cancer research equipment, treatment equipment that is 
going to be shared. But the Medical University, of course, is 
under a construction program now. It would seem like to me that 
the ideal time to continue further cooperation would be for the 
VA to explore the possibility of replacing the old VA with more 
current facilities. And if we don't move, I guess, within the 
construction timeframe, then this could be difficult to utilize 
the space available at that site. And as we speak, the VA 
hospital is in a flood zone, and we would be at certainly the 
same risk as New Orleans was back when Katrina hit if, in fact, 
we had a class three or four hurricane come into Charleston.
    Dr. Kussman. Yes, sir, I understand.
    Mr. Brown of South Carolina. And one further question if I 
might, Mr. Chairman.
    We have had some of our returning veterans develop ALS. And 
I was just trying to find out in the budget how much dollars 
were going to be directed toward ALS research?
    Dr. Kussman. I will have to ask Dr. Kupersmith, but as you 
know, we have made ALS a service-connected issue. The number is 
6.8 million.
    Mr. Brown of South Carolina. Six point eight million.
    Mr. Chairman, if I might, if you could maybe arrange to 
have, like, a public hearing on ALS, to give our veterans an 
opportunity to be heard? Because they tell me, and I will just 
read this for further clarification.
    It says that, ``I recently learned of a number of cases in 
my district of veterans who have developed ALS, where VA has 
denied their claims because their service was not within the 
presumptive timeframe of August the second, 1990 through August 
the 31st, 1991.''
    Is that correct?
    Dr. Kussman. I am sorry, I cannot answer that. We have to 
ask the Veterans Benefits Administration, so we can be happy to 
take that question for the record, and get back to you.
    Mr. Brown of South Carolina. Okay, I appreciate it. Thank 
you.
    Thank you, Mr. Chairman.
    Mr. Michaud. Thank you, Mr. Brown. We definitely will work 
with you on that, as well.
    Congressman Salazar?
    Mr. Salazar. Well, thank you, Mr. Chairman, and thank you, 
Mr. Secretary, for coming and joining us today.
    I have great concerns about the President's budget and his 
proposal to cut dollars for prosthetic research. Could you 
address that a little bit? I know that there are great new, 
exciting advances that have been made in myoelectric prosthetic 
limbs. And you know, I was at Walter Reed Hospital a couple 
weeks, Monday, and the greatest concern I have is that we have 
a brand new generation of veterans that are basically left 
without arms and legs. I had the opportunity to meet with 
several from Colorado. I think it is critically important that 
we continue to develop that research, and to provide better 
prosthetics for returning men and women from Iraq and 
Afghanistan.
    And secondly, I would also like to ask you about the CBOC 
facilities. I know that there are certain requirements that you 
have to meet before a CBOC can be constructed. I know that out 
in Craig, Colorado, we have been working on trying to put one 
together there because veterans have to travel over 5 hours of 
mountainous terrain to get to any kind of primary healthcare 
physician.
    Is there any way that we could waive some of those 
provisions, or some of those requirements, to be able to do 
that? Or is there a way that we would be able to contract with 
private industry, or private healthcare to address the needs of 
these veterans?
    Dr. Kussman. If I could, sir, I will try to answer the 
second one first.
    Mr. Salazar. Okay.
    Dr. Kussman. And then if I can remember what the first one 
was--no, I can remember it.
    [Laughter.]
    Rural health is a very important issue to us, as you know. 
And we are going to establish an office of rural health, to 
look at some of the questions that you ask. There are 
challenges, obviously, with people who live in--I want to say 
``inaccessible,'' but I mean rural areas. It is not just with 
healthcare and the VA. It is healthcare in general that they 
have challenges with. And they also have trouble getting phone 
service, and cable TV, and all kinds of things that are 
challenges with living there.
    You are right. We do have criteria that are established 
under the CARES process, to look at CBOCs, the number of 
veterans that are living in a place, the type of veterans in 
there, the needs of the veterans. We try to adhere to that as 
much as possible, obviously, so that we can be consistent with 
what we are doing. We are always willing to look at unique 
issues and see what we can do. This particular issue, because 
we are going to set up this office, that would be something 
that the office could certainly look at.
    As far as the rehabilitation and prosthetics research, as I 
mentioned, we are redirecting a sizable amount of our research, 
48 percent to 59 percent, related to OIF-OEF and prosthetics 
research. Prosthetics and rehabilitation research has gone from 
55 to 63 and a half million, from 2006 to 2008; that our 
prosthetic budget, totally, is $1.3 billion. Now, that 
prosthetic budget encompasses a lot more than limb prosthetics; 
it is the whole gamut of things. But as you may or may not 
know, the number of amputees that have been suffered in this 
conflict--now, we are not talking about toes and fingers. It is 
a limb loss, the number of servicemembers that have suffered an 
amputation is under 600. And not that that is not 600 more than 
I would like, but it is not an overwhelming number that both 
together DoD and VA can approach. So we believe that we are 
monitoring these people very closely, providing them all 
services they need. Cost is not an issue with them. We will 
provide them anything they need.
    Mr. Salazar. Thank you, sir. I yield back.
    Mr. Michaud. Thank you, Congressman Salazar.
    To follow up on the CBOC question that Congressman Salazar 
posed, and Congressman Miller; how many CBOCs will be open in 
fiscal year 2007? And how many will be open in fiscal year 
2008?
    Dr. Kussman. Twenty-four have been announced for 2007. Did 
you ask about 2008?
    Mr. Michaud. Yes.
    Dr. Kussman. Yes. There is a projection of up to 29 for 
2008. That hasn't been totally decided on, but that is a fair 
guesstimate of where we are.
    Mr. Michaud. Okay. And out of which appropriation account 
are these new CBOCs located?
    Dr. Kussman. That question came up, as you know, and it 
comes out of the VISN VERA dollars. The VISNs started, locally 
determined where they think a CBOC should be, meeting all the 
criteria. It does come up to the central office for review, not 
for distribution of dollars, but for review to make sure that 
everybody is following the same rules that we have 
standardization and consistency about what we are doing.
    Mr. Michaud. Okay. And where does the VISN get their money?
    Dr. Kussman. It comes out of the VERA distribution of 
medical dollars, that we take our $36 billion in budget, and we 
distribute it through the VISNs, and they are tasked to 
initiate CBOCs if they think it is appropriate, at the local 
level.
    Mr. Michaud. So it comes out of medical care dollars?
    Dr. Kussman. Yes, sir.
    Mr. Michaud. You know, the concern I have with that is if 
you actually require the VISN to request a CBOC in order for 
them to move forward, even though the CARES process says that 
there is a need there, unless the VISN asks for a business 
plan, then it doesn't move forward, and it is like a catch-22. 
If you don't have the money, you are not going to ask for a 
business plan, and therefore you are not going to get it, and 
therefore there is a lack of service, particularly in the rural 
areas. And it goes right back to some of the issues that we 
have talked about before on mental health issues, and a lot of 
other issues. I know the VA is doing all it can with PTSD and 
other issues, but the need is not being taken care of.
    I was reading an article this morning, and I will quote. It 
says, ``I am not going to take shots at the Administration or 
the Democrats. It is just a problem that needs to be fixed. It 
is an American problem.'' End of quote. That was from Larry 
Provost, an Army reservist who was given two months' wait for 
an appointment to address his PTSD problem.
    And you know, Larry is not the only one. I am reading the 
articles where suicide has occurred because the service is not 
there. My concern, particularly when you look at the CARES 
process, in rural areas is to make sure that we have adequate 
service for our veterans. And we look at the mental health 
area, former Congressman Lane Evans and myself, when we asked 
the GAO to look at the mental health dollars, to help initiate 
the mental health initiative; when it came back, it pretty much 
showed that the VA did not use all the money that it was 
allocated. Some of the money they did use they couldn't figure 
out where it was used. So I guess my next question is, does the 
Department plan on using all the money in the mental health 
area that has been allocated for fiscal year 2008? As well as 
the $306 million in 2007? Are you going to be utilizing all 
that money?
    Dr. Kussman. Yes, sir. The intent is obviously to use that 
money. Let me address the GAO's report. And we are not refuting 
that. The problem was that between a Continuing Resolution and 
our challenge to hire people, we did not spend all the money. 
We didn't lose the money, it was carried over to the next year. 
We are working very hard to track, and be sure that we put a 
performance measure in place to monitor that on a monthly basis 
of how that mental health money is being used. So we are very 
aggressive on trying to--but we don't want to waste it either. 
We want to be sure that it is appropriately spent to increase 
services for the veterans.
    As far as waiting times go, obviously there can be all 
kinds of anecdotal situations. We provide 39 million 
appointments a year. Thirty-seven million of them are done 
within 30 days of the request of the patient, 95 percent. So we 
want to make it 100 percent. We are going to work hard to do 
that. But all told, I think we are providing pretty good 
service for people when they need it.
    Mr. Michaud. But do you agree that that service could be 
improved?
    Dr. Kussman. It can always be improved, sir.
    Mr. Michaud. Good answer. Just a couple more quick 
questions.
    Dealing with priority eight veterans. When the Secretary 
was here the other day, in order to include the remainder of 
priority eight veterans, he said it would cost $1.7 billion. 
The Independent Budget came up with a much lower number, $366 
million. Out of that $1.7 billion, did the Secretary forget or 
not calculate the effect of the fees and the copayments? Is 
that the difference between the Independent Budget's numbers 
versus the Secretary's?
    Dr. Kussman. The Secretary never forgets anything, sir. I 
believe that it is in there, in the $1.7 billion, but we will 
get back to you on that. Over 10 years, it is $33 billion 
projected that it would cost if we open back up to priority 
eights.
    Mr. Michaud. What?
    Dr. Kussman. Over 10 years, and we opened it to--the cost 
would be $33.3 billion.
    Mr. Michaud. But for the priority eights that will be 
utilizing the system, they will also have to pay copayments.
    Dr. Kussman. Right.
    Mr. Michaud. Now, out of that number, the $1.7 billion, 
have you backed out all of the copayments?
    Dr. Kussman. I think that they have, but we will need to 
get back to you on that, because I don't want to give you the 
wrong answer.
    Mr. Michaud. Okay, great. Congressman Miller?
    Mr. Miller. I will go ahead and pass, I know we have 
another panel.
    Mr. Michaud. Congressman Brown?
    Mr. Brown of South Carolina. [Inaudible.]
    Mr. Michaud. Once again, I want to thank the panel for 
coming over this afternoon. I really appreciate it and look 
forward to working with you, and look forward to doing whatever 
we can to improve how we give services to our veterans. So 
thank you very much.
    Dr. Kussman. Thank you, Mr. Chairman.
    Mr. Michaud. I would ask the next panel if they would come 
up, please.
    I would like to welcome the second panel. The second panel 
includes Dr. Joseph English, who is a Board of Trustee Member 
of the American Psychiatric Association; Gary Ewart, who is the 
Director of Government Relations for the American Thoracic 
Society, on behalf of the Friends of the VA Medical Care and 
Health Research; and we have Patrick Campbell, who is 
Legislative Director of the Iraq and Afghanistan Veterans of 
America. So I would like to welcome all three of you gentlemen, 
and we will start off with Dr. English.

    STATEMENTS OF JOSEPH T. ENGLISH, M.D., MEMBER, BOARD OF 
    TRUSTEES, AMERICAN PSYCHIATRIC ASSOCIATION, CHAIRMAN OF 
PSYCHIATRY, ST. VINCENT'S CATHOLIC MEDICAL CENTERS OF NEW YORK, 
PROFESSOR AND CHAIRMAN OF PSYCHIATRY, NEW YORK MEDICAL COLLEGE, 
    AND COMMISSIONER, JOINT COMMISSION ON ACCREDITATION OF 
  HEALTHCARE ORGANIZATIONS; GARY EWART, DIRECTOR, GOVERNMENT 
RELATIONS, AMERICAN THORACIC SOCIETY, ON BEHALF OF THE FRIENDS 
  OF VA MEDICAL CARE AND HEALTH RESEARCH (FOVA); AND PATRICK 
 CAMPBELL, LEGISLATIVE DIRECTOR, IRAQ AND AFGHANISTAN VETERANS 
                           OF AMERICA

                 STATEMENT OF JOSEPH T. ENGLISH

    Dr. English. Mr. Chairman, I appreciate that, and it is a 
pleasure to address you and Members of the Committee. I also 
serve as Chairman of Psychiatry at St. Vincent's Catholic 
Medical Centers of New York, and Professor and Chairman of 
Psychiatry at New York Medical College.
    My department is affiliated with two VA medical centers; 
Montrose and Castle Point, in the Hudson Valley. And I 
currently serve as a Commissioner of the Joint Commission on 
Accreditation of Healthcare Organizations which, as you know, 
surveys and accredits healthcare facilities.
    I am especially proud, Mr. Chairman, that my oldest son 
Patrick has recently completed service as a captain of infantry 
in the United States Marine Corps, with service in Afghanistan 
and Iraq. His last assignment was to serve as the aide de camp 
of the commanding general of the Fourth Marine Division, whom 
he assisted with the problems of wounded Marines and their 
families cared for by the VA. So it is a pleasure to be able to 
talk to you about some of this this afternoon.
    Today I am principally representing the American 
Psychiatric Association, as you mentioned, with 37,000 
practicing psychiatric physicians as members. And I also want 
to thank the Members of the Committee, and your colleagues in 
the House, for your continuing commitment to the welfare of our 
veterans, and would specifically like to mention Dr. Katz and 
Dr. Cross, who you know well, who are of great help to us in 
assisting with that. And I must say, Dr. Kussman's testimony, 
having to do with some of our concerns, was great to hear 
before this Committee.
    We are very encouraged by VA Secretary Nicholson's 
testimony emphasizing the importance of providing mental 
healthcare to returning National Guard members, as well as 
other veterans. And we are encouraged by the President's 
request for additional funds for the VA Department of Mental 
Health Strategic Planning. All of that is good news for us.
    But we are concerned that there is increasing need both in 
the number of servicemembers returning from combat, and the 
severity of their metal health diagnoses, that continues to 
warrant the attention of this Committee. Colonel Hoge reported 
a 2006 ``JAMA'' article, that approximately 15 to 17 percent of 
our recent vets have such conditions as posttraumatic stress 
disorder, major depression, other mental health problems, as 
you well know.
    According to a GAO report issued less than 2 years ago, and 
I quote, ``the reliability of the VA's estimate for the total 
number of veterans it currently treats for PTSD is uncertain, 
and the VA lacks the information it needs to determine whether 
it can meet an increased expected demand for PTSD services,'' 
as you have already manifested concern about.
    The APA is concerned that the VA's PTSD service expansion, 
improvement, and coordination, may be inefficient and slow to 
respond due to VA data problems. The APA, along with Friends of 
the VA, remain extremely concerned that data collection in the 
VA and the DoD is hampered by non-congruity of data measurement 
classifications from year to year, due in part to realignment 
initiatives and quality of care initiatives.
    And while the homelessness and posttraumatic stress 
disorder programs have received attention, problems remain. 
There is a disparity among the VISNs regarding physician 
staffing, waiting lists for treatment programs, as well as lack 
of resources. The VA should continue to invest resources in 
these programs and develop all the elements which provide a 
continuum of care.
    We also commend the efforts of the VA to improve access to 
mental health services by locating them in a primary care 
facility, and encourage expansion of these co-locations. We 
have seen this in our own VA facilities. It makes a tremendous 
difference for access to veterans.
    The APA is hopeful that with continued education in organic 
brain changes that occur with combat stress, the stigma against 
mental illness will be greatly diminished. Tens of thousands of 
soldiers which are deployed to combat zones are members of 
National Guard and Reserve units. These troops do not receive 
their health- care from the VA, as you know, but most often 
from private employer-sponsored health insurance plans when 
they return to civilian life. It is therefore important that 
data on the DoD's TRICARE program's accessibility to Guard and 
Reserve troops continue to be collected, to monitor the need 
for expansion and increased funding for this program.
    And the APA urges the adoption of insurance parity laws for 
private employer health insurance, to improve access to care.
    We are very concerned about the ancillary mental healthcare 
available from TRICARE to family members of the soldier who is 
deployed. The same holds true for families of veterans who have 
returned and are experiencing readjustment problems.
    We would also like to encourage the DoD and the VA to 
continue to work together for a seamless transition of soldier 
family to veteran's family, and that family resilience be an 
important factor in the comprehensive care of veterans.
    In summary, we are pleased to note some of the achievements 
of VA mental health and substance abuse programs in the areas 
of clinical care, research, and education. However, we continue 
to have concerns about the disparities among some of the VISNs, 
the remaining stigma toward mental illness by VA 
administrators, as well as the quality of psychiatric care and 
patient safety. We support the Administration's fiscal year 
2008 budget proposal, and request additional funding of $500 
million every year until fiscal year 2012, to ensure the 
success of the VA's healthcare mission.
    And Mr. Chairman, I would also like to say a word if I have 
a few minutes, because my son I mentioned worked for the 
general who commands the fourth Marine division, who has a lot 
of contact with families. As a matter of fact, when he visits 
families and Marines at Walter Reed and other facilities for 
the country, he gives them his card and encourages them to call 
if they have a problem. And they do, and oftentimes my son 
would be called upon to help with those problems.
    And I reached him on the phone yesterday. My son arranged a 
call, and we had a wonderful conversation. I would like just to 
share a little bit of what he had to say. First of all, he is 
the first to say that great things are being done for our 
soldiers in the VA. But there are problems. For example, you 
can have a soldier that is given excellent care at Walter Reed. 
And then he is returned to a facility close to his home, and 
that facility may not have a fraction of the resources for the 
continuing care that soldier needs. My son has called me about 
that a couple of times, and I have called the VA, and they have 
quickly made adjustments for that. But it happens more often 
than--the reasons why would be obvious, but it is something I 
think we need to pay attention to with these very seriously 
wounded soldiers.
    Secondly, there are administrative complexities in dealing 
with the VA, at the administrative level. He says that the 
differences in the understanding of what the benefits are and 
who qualifies for them in different regions of the country can 
sometimes be a nightmare that takes a Marine general to deal 
with. And this also affects financial aid to the families. He 
cited one example of a father who was caring for his severely 
wounded son living there with him, supposed to get family 
assistance, away from his job for months. But no subsistence, 
and the maze that he had to go through to get that problem 
corrected, which he did, is an example of another thing that 
under the surface is a problem that he is certainly concerned 
about.
    And finally, he would be gratified to hear the discussion 
at this Committee this morning of concern about TBI, these 
traumatic brain injuries. His concern, as a general, concern 
about his men, is that a lot of these men with closed-head 
injuries, which don't appear to be causing difficulty at the 
moment, are going to end up with delayed illnesses, and 
somebody 10 years from now is going to wonder whether or not 
they are service-connected. And that is why he is urging, 
together with the physicians that he speaks to at these 
centers, that research funds be provided for the study of this 
kind of problem, so that we are able to take care of the young 
men and women when the problems may arise later on.
    And then finally, sir, this may not be within the province 
of this Committee, but I just feel impelled to tell you about 
it because listening, here, to the cooperation that is going on 
between the VA and the DoD, perhaps it can help with this. We 
have Reserve physicians who have retired who allow themselves 
to be reactivated, to go back into the military to help with 
the current situation. One of these very distinguished surgeons 
from my area of New York, Bronxville, New York, went to the 
major DoD facility in Germany, where some of the very seriously 
wounded soldiers are being brought.
    Sir, for significant portions of time, there was no 
neurosurgeon in that facility, and that is almost unbelievable. 
I am sure it is not because the DoD didn't want one there, but 
it is because they can't get them. My question to you, sir, is 
whether or not it might be possible for the VA to help with 
this, in the spirit of collaboration that is going on.
    Well, sir, I could go on and on, but I very much appreciate 
this opportunity and the help that all of you give to this 
great cause.
    [The statement of Dr. English appears on pg. 40.]
    Mr. Michaud. Thank you very much for your enlightening 
testimony. Mr. Ewart?

                    STATEMENT OF GARY EWART

    Mr. Ewart. Thank you. I am Gary Ewart, Director of 
Government Relations for the American Thoracic Society, and I 
am here today speaking on behalf of FOVA, Friends of VA Medical 
Care and Health Research, a coalition of over 80 organizations, 
veterans service organizations, physician organizations, and 
patient organizations, that support the mission of the VA 
health system.
    I am here today to speak in particular emphasis on the VA 
research program, and to present our request for $480 million 
for fiscal year 2008, for the VA research program.
    I must say, FOVA recognizes the significant budgetary 
constraints that this Committee is under, and thanks both the 
House Veterans' Affairs Committee and your Senate colleagues 
for the consistent support you provided for the VA research 
program in your views and estimates budget. I would like to 
remind this Committee that in last year's views and estimates 
budget for 2007, there was a recommendation between $28 million 
to $51 million increased for the VA research program. I think 
the views and estimates of 2007 demonstrate the strong support 
this Committee has provided in the past for the VA research 
program, and we hope to continue to build on that support for 
the views and estimates for 2008.
    Lest I assume you will continue to support the VA research 
program, let me give you three good reasons why I think you 
should continue your support of the VA research program.
    First, the VA research program is a successful program for 
attracting and retaining physicians in the VA healthcare 
system. I think it is fair to say when physicians graduate from 
their fellowship programs, they have a menu of options 
available to them. And one of the things that attracts 
physicians to serve in the VA is the ability to do clinical 
care, and seeing and treating patients in the veteran system, 
as well as compete for the intramural research budget that the 
VA offers. And by ``intramural'' I mean you have to be at least 
a five eighths physician to compete for the intramural research 
program that VA offers.
    What this allows is the VA to entice young physicians who 
want to see patients and develop their scientific career, to 
join the VA. It is a successful program for bringing these kind 
of doctors in.
    Equally important, it is a successful program for retaining 
these physicians over time. And I am sorry that Dr. Snyder 
isn't here because I would tell him about his good friend Dr. 
Joe Bates from Little Rock, Arkansas, who, for 25 years, served 
in Little Rock, Arkansas. And he would consistently say to me, 
``Gary, the program works, it got me in, it is why I stay. It 
is what birthed my career, both as an investigator, and allowed 
me to get NIH funds over time, to contribute to the science and 
care, treating veterans.''
    The VA research program also produces good science, and 
particularly good clinical science. The colleagues at NIH do a 
great job of doing basic research, and generating a wealth of 
ideas. Somebody needs to take these ideas, and apply them to 
good medical care, and that is something that the VA research 
program does an excellent job; taking basic research findings 
and using them to improve the care for veterans and ultimately 
all Americans.
    Examples of some of these findings are in my written 
examples, and these have been published in prestigious journals 
like the ``New England Journal of Medicine,'' and the ``Journal 
of the American Medical Association.''
    In preparing for this testimony I was trying to think of 
another metric to demonstrate for you the value of science that 
the VA research program supports. And I thought Nobel laureates 
might be an interesting way of looking at things. The VA 
research program can claim three Nobel laureates in medicine as 
part of their family. And that is on a budget of about $412 
million. As a point of comparison, NIH, which has an intramural 
research budget of about $2.6 billion, has four Nobel 
laureates. So I think this compares very favorably between VA 
and NIH, and it shows the quality of science that is being 
conducted at the VA research program.
    And lastly, the VA research program is good for veterans. 
And let me say it again for emphasis: it is good for veterans. 
It gets these high-quality, thought-leading doctors in the VA 
system. It gives veterans access to cutting-edge treatment. And 
because the VA system is a system, unlike our dyslexic 
healthcare system outside of the VA, it allows an entire system 
to apply these findings across the board, so not just those in 
the research lab can enjoy these increased treatments for 
veterans; that they can be applied across system-wide.
    While I am very enthusiastic about the VA research program, 
there is one problem I need to bring to this Committee's 
attention once again, and that is the deteriorating lab space 
in the VA system. It is fair to say that the VA research lab 
space is woefully out of date. If the VA wants to continue to 
maintain a state-of-the-art VA research system, we need to have 
state-of-the-art VA research facilities. FOVA greatly 
appreciates the Subcommittee's effort in the past, both in 
holding hearings and report language addressing the problem. 
However, the problem still persists. We strongly recommend that 
the views and estimates for 2008 specifically recommend $45 
million for rehabilitating existing lab space within the VA 
research system.
    Mr. Chairman, I think it is clear that the VA research 
program does a lot of good for a lot of people, for very little 
money. We strongly encourage this Committee in developing your 
views and estimates to support both the need for the VA 
research program, and $45 million for the VA lab space 
infrastructure. Thank you.
    [The statement of Mr. Ewart appears on pg. 45.]
    Mr. Michaud. Thank you very much. Mr. Campbell?

                 STATEMENT OF PATRICK CAMPBELL

    Mr. Campbell. Mr. Chairman, it is a pleasure to be here. 
This is a far cry from the basement, the last time I testified 
in front of you.
    My name is Sergeant Patrick Campbell. I am a medic with the 
D.C. National Guard, and the Legislative Director for the Iraq 
and Afghanistan Veterans of America. I have submitted a written 
testimony so I am not going to just read it. I figured I would 
take my couple of minutes and tell you a short story.
    A little bit of background on me. When I was in Iraq, I 
witnessed over 16 IED, mortar, gunfire attacks. As a medic, I 
frantically tried to save many lives. I saved most, but lost 
too many. Mr. Chairman, I have told you some of my war stories 
before, and to be quite frank I am not ready to relive some of 
them today. I figured I would tell you a different type of 
story.
    When I got home off that plane, it was 2 days before 
Hurricane Rita hit, made landfall in Louisiana. I kissed the 
tarmac. The first meal I had was Taco Bell and a beer. I was 
home, I was safe, and I was wrong. In my mind, when I turned in 
my weapon that day, the war was over for me. It took me less 
than one month of being back to alienate, anger, and scare off 
some of my closest friends. I did things, I said things that 
were supremely insensitive. I drank too much, I caroused, I was 
mean. All the while, I was vehemently arguing that I was the 
same warm, fuzzy person that everyone remembered before I left.
    Now today, a year and a half later, I am sitting in front 
of you as a medic, a graduate of UC Berkeley, a law student, an 
advocate for veterans service organizations, and someone who is 
thoroughly aware of the medical services that are available to 
veterans for mental health counseling.
    When it came time for me to ask for help, I wouldn't. I 
mean, I couldn't. It took an intervention of some of my closest 
friends threatening that they would never talk to me again 
unless I sought medical services. I am proud to say a couple of 
months ago I went into the vet center, sat down with my vet 
counselor and he said, ``No one who goes to war ever comes home 
the same person.'' Unfortunately for many soldiers, the real 
battle begins the day that they get home.
    As you well know, we people in the military are a proud 
bunch. We are trained to overcome and defeat any obstacle. For 
most of my buddies, the thought of attending counseling is 
admitting defeat in a mental war that rages well beyond the 
days we turned in our weapons.
    I have been diagnosed with posttraumatic stress disorder. I 
would prefer to call it readjustment problems, but it has been 
officially diagnosed. Every time I say it gets a little easier, 
but I keep thinking there is someone in the back of the room, 
or someone watching at home, staring at my bald spot, laughing 
at me, thinking, ``That guy is not a real soldier. He needs to 
get back in the fight.''
    I can say from personal experience that to think that even 
a majority of the veterans who need mental health counseling 
will ask for help is just plain naive. The VA's passive 
approach of waiting for veterans to come to them isn't working. 
Right now, the budget that you have submitted before you is 
predicated on the idea that the people who ask for help are the 
people we are going to serve.
    We are not going to get to the people who need the most 
help. The people who check a box on their post-deployment 
health reassessment form, or the people who make that phone 
call, or the people who have the support network where a spouse 
or a friend stops them and says, ``You need to go get 
counseling,'' they are not the people we need to worry about. 
We are worried about the person whose wife, whose husband, 
whose friends say, ``I can't deal with you anymore,'' and just 
leave, and watch that person spiral out of control.
    This budget is predicated on the VA sitting around and 
waiting, waiting for those soldiers to call. Soldiers need and 
deserve mandatory health screening. Every soldier who comes 
home from combat needs to see a counselor. You ask any police 
department around the country, the moment a bullet is fired, by 
the police officers, by anyone else, every person in that area 
immediately sees a counselor. If they don't, they will not be 
paid for the next paycheck.
    We have hundreds of thousands of troops who have seen 
things that they will never want to tell anyone. I mean, 
watching someone die in my hands because of a mistake that I 
made is something I will have to live with for the rest of my 
life. And as I sit here before you, I don't want to talk about 
it. I don't want to tell the world about it, but I definitely 
don't want to tell my friends. I don't want to tell anyone who 
is going to look at me with those eyes and say, ``I'm really 
sorry,'' but I know they don't understand.
    The only way we are going to remove the stigma of mental 
health counseling is to require everyone to attend. They say an 
ounce of prevention is worth a pound of intervention. By 
requiring all soldiers to submit to mental health screening 
today, we would be saving billions of dollars 10 years down the 
road.
    There is a wooden sign that hangs over the door of the D.C. 
vet center that says, ``Welcome home.'' I will never be the 
same man I was before I left for Iraq. But I know whoever I 
become, I will always have a home at the vet center. I just 
pray that every one of my battle buddies find the courage to 
find their way home. We need to lead that fight. When you look 
over this budget we need to reject the assumption that soldiers 
who need help the most will ask for it, and we need to go to 
every soldier. If money is no object for people who are missing 
a limb, money should be no object for treating those people who 
have borne the burden of this war.
    Less than 1 percent of this country has fought in Iraq or 
Afghanistan, and they are going to keep going. I am scheduled 
to redeploy in a year, year and a half, for my second tour. And 
you know, I am not trying to shirk that responsibility. I just 
want to make sure that I am as fixed as it can be so that when 
I go back again, it is not just compounded.
    I really appreciate the opportunity to speak here. I am 
glad that we were invited and we are ready for your questions.
    [The statement of Mr. Campbell appears on pg. 49.]
    Mr. Michaud. Thank you very much, Mr. Campbell.
    I know Mr. Brown has to run off to another meeting, so I 
recognize you for your question, Mr. Brown.
    Mr. Brown of South Carolina. Thank you, Mr. Chairman, and 
it is a pleasure sitting on this side, you know. I want to 
congratulate you on the Chairmanship, and for conducting such a 
great hearing.
    And thank you, gentlemen, for coming and sharing with us 
your insight. Dr. English, I was particularly refreshed to hear 
your willingness to offer volunteers to help fill in the gap. 
That is what makes America great, is those people that are 
willing to come forward and to meet a need.
    And Sergeant, we are glad to have you, and grateful for 
your service to this country. War is never easy. We want to be 
absolutely sure that those needs are going to be met, and I 
think you made a good point. Sometimes PTSD can't be recognized 
like a missing arm or a leg, but yet the pain is still there, 
and I am grateful for you bringing that insight to us.
    Sir, we are grateful for your testimony, and we recognize 
that there are never enough research dollars. And we are trying 
to do some things in Charleston where we are trying to broker 
between the Medical University and the VA, a research facility. 
It is basically concentrated on heart disease, but it is the 
right way. There are never enough dollars, so we have got to 
find smarter ways to be able to work within those programs. But 
I wanted to just particularly thank you for coming.
    And Mr. Chairman, I apologize for having to leave, but 
thank you for your leadership.
    Mr. Michaud. Thank you very much, Mr. Brown. It is always a 
pleasure working with you. I know you care deeply about the 
veterans, and I really look forward to continuing working with 
you over the next couple years on this Subcommittee.
    It took me a while to get used to that accent, to figure 
out what you were trying to say. But after I learned that, we 
got along very well. So thank you very much.
    [Laughter.]
    I have got a couple questions. The first one is for Dr. 
English. If you look at the higher percentage of women that are 
now serving in Iraq and Afghanistan, combat veterans, do you 
think that the VA PTSD treatment programs and research 
initiatives are keeping pace with the unique needs of women 
veterans? And if not, do you have any recommendations for that?
    Dr. English. Well, I think that is an important question, 
Mr. Chairman. I have a woman chair at our own facility. She is 
very interested in that question, too. And what I hear from 
her--needless to say I touch base with our own VA facilities 
before coming down here--is very encouraging in that regard. 
There is a growing awareness that women need these services as 
well as everyone else. They have their own problems of stigma 
in approaching these services. But I think the VA is doing good 
things to try to help solve that problem.
    Mr. Michaud. Do you think that the VA should mandate that 
all CBOCs provide some type of mental health services?
    Dr. English. Well, I listened to my colleague's very moving 
testimony here, and I must say it is hard to argue with anybody 
that comes here with his credentials. I think the other side of 
it, though, that we have got to be careful of is that some 
people would really resent the program if it were mandated. You 
know, they get that Orwellian feel. We have had that problem 
with the police in New York, where there is a mandatory 
program, sometimes. So I think there is a middle ground there 
somewhere that, working with folks who have had this 
experience, we can achieve.
    I think right now what he is saying is correct; that maybe 
the bulk of the people that need the help that we ought to be 
able to provide do not come to it without something that 
provides them an incentive. Whether that goes all the way to 
mandation or not I am not so sure, but it is certainly an 
important issue for us to continue looking at.
    Mr. Michaud. Thank you. And you also, Doctor, expressed 
concerns in your testimony over the lack of a system-wide 
approach for proper identification, management, and 
surveillance of those who sustained mild to moderate TBI, 
concussions. What would you recommend to the VA to address this 
problem, or to Congress, of how we should address this problem?
    Dr. English. Well, I think some of the Secretary's comments 
to you here this morning were encouraging in that regard, Mr. 
Chairman, because it looks like they are very much aware of 
this problem, and they are looking at better ways to detect and 
discover problems that the soldier, or the Marine, or the 
sailor, is not going to volunteer themselves. I think we feel 
that there is attention being given to that.
    I think the concern we have is that there may not be 
adequate research being done into the long-term effects of some 
of these TBIs that appear on first--you know, it could be--
these explosions, as you know, can cause tremendous damage to 
the brain, that is invisible or undetectable. And yet, there is 
evidence that there is going to be long-term impact from that, 
that may develop only years later.
    And I was particularly interested in what the general had 
to say about this. He talks to a lot of the docs in these 
facilities about this kind of thing, and that was the major 
thing that he asked to be represented here this morning; that 
there be research into the long-term impact of some of these 
head injuries that are really not as evident when they are 
being examined acutely.
    Mr. Michaud. Thank you.
    Mr. Ewart, you had mentioned more money in the VA for 
research, $480 million for research. That is just to meet the 
cost of inflation. Do you think that much more money has to be 
provided to the VA, to address polytrauma and genomic medicine?
    Dr. English. I sure do, Mr. Chairman. You summed it up 
beautifully.
    Mr. Ewart. I agree with his comments.
    [Laughter.]
    First, if I could caution, there is a little bit of 
disingenuousness in the President's budget. If you read the 
budget documents, it mentions a 2.7 percent projected increase 
in total VA research enterprise. That is including all the NIH 
money VA investigators may get, and private money VA 
investigators might get.
    Unfortunately, NIH's budget is also being flatlined, and I 
think the assumption that the VA investigators are going to 
aggregately pull in an additional 2.7 percent more money this 
year as opposed to last year, particularly when NIH's budget is 
flat, and VA budget, as in the President's proposal, is being 
cut. I think that is an unrealistic budget assumption.
    To answer your question regarding current services, if you 
assume that the biomedical research inflation is 3.7 percent, 
it would require $427 million in fiscal year 2008 just to 
maintain current service, or current buying power, in the VA 
research program.
    There are a number of needs. We have spent a lot of time 
talking about the returning veterans from Iraq and Afghanistan, 
and traumatic brain injury, and multiple injuries that they are 
facing. That requires a great deal of additional research on 
both the obvious wounds, and the less obvious wounds, and how 
best to track and treat those individuals over time.
    But we also have commitments to veterans of previous wars; 
World War II, Vietnam, Korea, they still have pressing health 
needs that require additional research. So I think there is a 
compelling case to be made for an increase in the research 
budget for the new problems that face the veterans population, 
as well as the less new problems that are facing the veterans 
population.
    Mr. Michaud. Okay. Dealing with the research issue further, 
research done at VA facilities incur direct and indirect costs 
associated with a particular research project. Direct costs for 
research are usually covered by the grant, or contract 
provisions. The indirect costs associated with research, which 
in VA's case, in facilities, and administration costs, are paid 
by the medical account from the VA. Do you believe that the VA 
should be able to get reimbursed for those indirect costs from 
NIH?
    Mr. Ewart. You are asking, Mr. Chairman, a very challenging 
question. The indirect cost issue has been a sore point between 
the VA research program and NIH research program for quite some 
time. NIH has taken the position that they are barred from 
essentially using Federal dollars to pay for another Federal 
program, and that has been their position over time.
    The VA has taken the position that much like any other 
grant program, they are entitled to indirect costs. I think 
there needs to be some middle ground established that will 
allow for recognition of the indirect costs associated with VA-
funded grants, and particularly with NIH-funded grants that are 
being done at VA facilities. What that magic middle ground is I 
cannot tell you today. But I do think that is an area that 
needs to be solved soon, and solving that will provide 
additional resources for the VA research program, I hope and 
expect.
    Mr. Michaud. Thank you.
    Mr. Campbell, you had mentioned in your testimony that it 
was because your friends were very persistent, that you went to 
seek help for PTSD. What are you recommending for those--and 
you mentioned also that, you know, it should be mandatory. But 
what would you recommend for those who might not have the 
supportive circle that you had around you to encourage you to 
seek PTSD help?
    Mr. Campbell. Well, I had my most recent counseling session 
on Monday, and I asked my counselor, you know, ``if you could 
be testifying here today, what would you say?''
    And he said, ``I think that every returning veteran should 
check in the local vet center when they get home.''
    And I agree with you that when you talk about mandatory, 
when you have someone who is out of the military, they are not 
being told what to do anymore. You know, you almost have to 
bribe them to get there. You have to give them an incentive.
    Right now, we pay $50 to every U.S. soldier to enroll in a 
recruitment program. And for every person they bring in, we get 
$2,000. So right now, to get people into the military, we are 
literally bribing people, ``Just enroll in the program and we 
are going to give you a $50 credit card.''
    I am not saying it needs to be $50, I am not saying it 
needs to be, you know, whatever. But you need to incentivize; 
when someone leaves the military, that they go and the first 
thing they do, or within a short period of time, go in and 
check in with a vet center. It only takes one time for these 
trained counselors to see if there is going to be a problem. 
And you know, like I said, the more people who go, the less of 
a stigma it has. You know, if you cannot make it mandatory for 
someone who is out of the military, give them a reason to go.
    And it has got to be a major campaign, just like the--you 
know, hire a PR firm. You know, we are spending it on, I don't 
know, billions of dollars, it feels like, on recruitment 
programs. We also need to worry about it on the back end.
    Mr. Michaud. When you returned from Iraq, what type of 
screening or help did you get from your unit? And what type of 
outreach did you encounter from the VA?
    Mr. Campbell. I remember this very distinctly. We were 
sitting in a very large auditorium, and they hand out a bunch 
of sheets of paper, and my captain gets up and says, ``I want 
you all to answer this questionnaire honestly.'' Everyone gets 
it, ``But if you answer yes to any of these questions, you are 
going to stay and everyone else gets to go home.'' And that 
questionnaire was asking about symptoms for posttraumatic 
stress disorder.
    Now, the first thing I did when I got home, because I used 
to work on the Senate side, was go to my old boss and say, 
``This needs to be fixed.'' So we took the post deployment-
health assessment form, and we created the post deployment re-
health assessment form.
    Problem is, anyone who got home before January 2006, if 
they were triaged, they never got followup counseling. As I 
said to you before, the last time I testified, down in the 
basement, I had just got a phone call from one of my buddies 
who said that my next door neighbor when I was in Iraq 
committed suicide on the same day the VA decided that they were 
going to do a sample of 40 troops from my brigade out of 4,000. 
So they took and had a mandatory face-to-face counseling with 
40 of them, and one of my buddies wasn't on that list, and he 
committed suicide that same day.
    The problem is that we fill out tons of forms. I mean, I 
have not filled out the post to post deployment health 
reassessment form. The only thing that has happened to me 
because of that is I can't be deployed until I re-fill out that 
form. I was talking to one of my buddies, Sergeant Todd Bowers 
downstairs before I came up here. He has filled out the form 
six times. He got called yesterday by the Marines asking him 
the same question he has filled out. He has answered the 
questions the same way each time, and he has never been reached 
out to by a mental health physician.
    These tools, these post-deployment health reassessment 
forms are very powerful tools only if there is the followup; 
meaning, getting these people to counseling. People who were in 
a war zone have seen things--like my counselor said, no one 
goes to a war zone and comes home the same person. You know, 
these questions say, ``Have you ever seen anything--did you 
ever feel that your life was in danger?'' Yes.
    You know, talk about traumatic brain injury, I had an IED 
go off right next to my ear, to the point where I started 
bleeding from my eardrum. You know, I have never been screened 
for a traumatic brain injury. You know, that was probably one 
of three or four that I can say were within five to 10 feet of 
me.
    You know, we know what has happened to these people now. We 
are just not actually doing anything about it. And my unit, out 
of 4,000 people, I would say--I can say about my 22 guys, I had 
22 guys there. Three of them have gone and gotten counseling, 
including myself.
    The last thing I am going to say is in terms of making it 
mandatory. In Fort Bragg, if you go to the TMC, the troop 
medical clinic, for a hangnail, you will get mental health 
counseling. You know, the moment you walk into a healthcare 
center, you get mandatory mental health--and the number of 
soldiers that they have been able to treat for mental health 
issues has gone up greatly. Because Fort Bragg, of all the 
places, has some of the people who have seen the worst 
fighting.
    Mr. Michaud. Doctor?
    Dr. English. I would like to say a word just reflecting on 
this testimony, Mr. Chairman. This is going to be an analogy 
that is maybe stretched a bit, but I happened to serve as the 
First Chief of Psychiatry for the United States Peace Corps. 
And Sergeant Shriver was rather concerned when ``Life'' 
magazine did a front page story on the reverse culture shock 
that Peace Corps volunteers would experience after service, 
coming back into the United States. I don't mean to compare 
this to posttraumatic stress disorder, but they left one way, 
lived in radically different circumstances, had experiences 
that nobody their age would ever have, and then they are coming 
back.
    So he felt that something had to be done about that. And we 
also were worried about forms, all the usual things. What he 
allowed us to do was to start something called ``completion of 
service conferences.'' All over the world. Every single group 
of Peace Corps volunteers, or the first 5 years that I can 
speak to, about 2 months before they left the country, were 
brought together in the group that left the states, under the 
auspices--well, originally it was a couple of us in our field. 
It was to debrief them, it was to get a sense of what their 
experiences had been. But in the course of that, we were able 
to ask, and actually inventory, through a questionnaire, what 
their psychological difficulties had been while they were 
there, what they had done to get over it, and then to begin to 
make the transfer into what they were going to be encountering 
when they came back home.
    And let me tell you something. I think they would have 
reacted exactly the same way that you are hearing here, as 
soldiers do when it is done through, you know--but when you get 
them together in a group, when you get them talking about 
experiences they have had that might relate to something that 
is going to occur back home, when you normalize it, and then 
most importantly, when--first of all, those sessions themselves 
were tremendously helpful in making the adjustment. They went 
on for 2\1/2\ days, all over the world.
    But then, we had touch with them when they came back home. 
We had 400 psychiatrists identified. If we got a call from one 
of those Peace Corps volunteers, they would immediately be seen 
by one of the best people in that region in the country.
    What that resulted in was a complaint from the General 
Accounting Office that we might not be adequately explaining to 
Peace Corps volunteers their benefits, because there was so 
little required in the way of long-term illness benefit 
associated with such a population that had been overseas, they 
didn't understand it, and they thought we weren't educating the 
volunteers.
    So there may be some experience there that would be 
relevant for trying to tackle this very important problem.
    Mr. Michaud. Thank you.
    What are the three recommendations you would list as the 
highest priority for this Subcommittee to deal with? And we 
will start with Mr. Campbell.
    Mr. Campbell. I can give you two, because I am first. I 
think traumatic brain injury research. And I know the fight we 
had last year about funding just the small program, the Defense 
Veterans Brain Injury Center. That shouldn't even be a fight. 
You know, any program that is doing research for veterans, the 
Department of Defense, TBI just needs to be fully funded.
    And number two, I am going to harp on this again. Any way 
we can get soldiers to mental health counseling; requiring, 
incentivizing it, but it cannot be a passive system. It has to 
be an aggressive system. The budget we have now is predicated 
on the idea that people are going to ask for help when they 
need it. If we go out to these soldiers and we ask them, ``Do 
you need help?'' We are going to find a lot more people coming 
into the system. It is going to cost more now, but save down 
the line.
    Dr. English. I could just say ``ditto,'' Mr. Chairman, let 
me just phrase it this way. I think the research is enormously 
important. What I would simply suggest is that we also have 
specific research dealing with a long-term effect of these 
injuries, like my friend here may have, the effects of which 
may not be felt for 10 years, and there is evidence from other 
illnesses that that is what can occur.
    Secondly, I think the question of access. I think there 
could be some very creative work. I was assigned to the Peace 
Corps as its First Chief of Psychiatry from the NIMH, from the 
National Institute of Mental Health. I was there to help us 
learn, for NIMH, what might be relevant to other things other 
than overseas service. Would it be useful to bring some of that 
kind of research to bear on this problem of access. It is not 
the first time analogous situations have been faced.
    And thirdly, sir, continued support and surveillance of 
this Committee of the terrific efforts that are going on to 
meet the mental health needs of veterans, and the Reserve and 
so forth, that we just keep it going, that when the resources 
are committed, it is spent. If it is not spent, why isn't it 
being spent? It isn't certainly because of need. It may be 
because of some of the same bureaucratic problems that were 
suggested by the Secretary in his testimony.
    But those three things we would most appreciate.
    Mr. Michaud. Great, thank you.
    Mr. Ewart. Thank you, Mr. Chairman. And you are tempting me 
sorely, because I lobbied for the American Thoracic Society, 
and part of me wants to speak about the unique needs in the 
pulmonary community, but I will speak more broadly. And I think 
there are three things that we, FOVA, would like to see 
additional resources to fund in the VA research program.
    First is deployment health. As has been so well articulated 
today, soldiers are going to war and coming back differently, 
and we need to understand what those health needs are. We need 
to survey what their health is before they are deployed, and 
what their health profile is upon returning. And if the VA 
research program has a vigorous proposal out there, that is 
only being applied in limited ways because of lack of funding, 
I think additional funding for the research aspects of 
deployment health is essential.
    I think genetics is a field of just wonderful potential, 
beyond the VA, but particularly for the VA. With the power we 
can get from actually understanding genetic makeup of each 
individual, it will allow the VA system--which is a system 
unlike our dyslexic U.S. healthcare system--to really track 
what are your genetic predispositions to diseases, and to focus 
your early detection efforts, and hopefully early intervention 
efforts, to make sure that medicine is being provided by the VA 
health system, as uniquely tailored to the individual.
    What is an additional beauty to this is not only does it 
improve care for the veterans, it also allows the VA healthcare 
system to enjoy the benefits of earlier targeted interventions, 
and earlier treatments that hopefully will lead to reduced 
medical outlays in the VA system.
    And because the VA is a system, it should not only be able 
to coordinate care of providing genetically tailored medicine, 
but also capture the cost savings system-wide, that I don't 
think other actors in the U.S. healthcare system are capable of 
doing.
    And the third one is chronic disease management. Whether it 
is chronic disease of chronic obstructive pulmonary disease, or 
HIV AIDS, the burden of chronic illness in the veteran 
population is significant. How to appropriately develop 
programs to manage chronic disease over time I think is 
something the VA population is uniquely in need of in the VA 
healthcare system, and the VA research program is uniquely 
suited to doing some scientific investigation on the best way 
to manage chronic diseases.
    Majority Counsel. Maybe we should include pulmonary care as 
a recommendation. Count it as one-half of three and a half.
    Mr. Ewart. That would be appreciated.
    Mr. Michaud. Well, once again I would like to thank the 
three panelists for your heartfelt testimony. It definitely has 
been insightful, and really appreciated. I also want to thank 
the staff on the Democratic and Republican side for being here 
today, and I want to wish everyone a happy Valentine's Day.
    So once again, thank you very much. The hearing is 
adjourned.
    [Whereupon, at 3:42 p.m., the Subcommittee was adjourned.]

 
                            A P P E N D I X

                              ----------                              

             Prepared Statement of Hon. Michael H. Michaud
                    Chairman, Subcommittee on Health
    I would like to thank everyone for braving the weather today.
    This will be the first of many hearings in the 110th Congress for 
the Veterans Affairs Health Subcommittee.
    I would like to welcome my Ranking Member, Congressman Jeff Miller 
of Florida and say that I look forward to working with you.
    We have a lot on our plates and I know that by working together, we 
will be able to accomplish a great deal this year.
    I would like to welcome our first panel of witnesses, Dr. Kussman, 
Dr. Kupersmith, Dr. Katz, and Mr. Kearns from the VA.
    The Veterans Health Administration is responsible for the health 
and well-being of our nation's veterans.
    There are few in any more important responsibilities of our 
government.
    We have an aging veterans' population. We also have a new 
generation entering the system with unique needs like mental health, 
traumatic brain injury and other wounds from service in Afghanistan and 
Iraq.
    We are here today to learn if this budget request can meet all of 
these needs.
    The request is an increase of 6 percent over last year's funding. 
We have heard from the Independent Budget and from other veterans 
service organizations that more money is needed.
    This request includes increases to fees and copays that this 
Committee and this Congress have rejected in the past.
    It also includes a cut in medical and prosthetics research that we 
will address.
    That being said, I believe this request is a good starting point 
for us, and I think we can move forward to create a budget that we can 
all consider a success.
    And let me be clear, I don't measure success by the dollars spent 
or the dollars saved.
    I measure success by the number of veterans receiving the highest 
possible quality of care in a timely manner.
    We look forward to hearing your testimony and to having a frank 
discussion about meeting the needs of our veterans.

                                 
                 Prepared Statement of Hon. Jeff Miller
           Ranking Republican Member, Subcommittee on Health
    Thank you, Mr. Chairman. I want to congratulate you, Mike, as you 
assume your new role as Chairman of the Subcommittee on Health.
    I, myself, am honored to have been selected by my colleagues to 
serve as the Ranking Member. With the return of thousands of new 
veterans from the Global War on Terror in need of medical services, 
this Subcommittee faces additional responsibilities and challenges. I 
look forward to working with you and all of the Members of the 
Subcommittee to see that the highest quality medical care is provided 
to our new generation of younger veterans and our older veterans from 
past conflicts.
    In recognition of today being Valentine's Day, I want to express my 
heartfelt gratitude to the brave men and women serving in our Armed 
Forces. I also want to take this opportunity to thank all the dedicated 
VA healthcare personnel throughout the country that work hard to make 
sure that servicemembers returning from Iraq and Afghanistan and all of 
our honorable veterans receive the best care.
    Over the past decade, we have watched VA transform its healthcare 
system from one with a lackluster reputation to one that is highly 
rated and highly regarded. Research study after study continues to 
distinguish the VA healthcare system for its outstanding performance, 
recognizing the significant benefit of VA's use of electronic medical 
records, focus on preventative care and measurable accountability.
    The Department proposes a record $36.6 billion for VA healthcare 
for fiscal year 2008--the largest amount ever requested by any 
Administration, and a 6-percent increase over the fiscal year 2007 
request.
    It is satisfying to see that after this Committee uncovered 
weaknesses in the process VA used to develop its healthcare budget last 
Congress, the budget request for fiscal year 2008 is more transparent. 
For example, this year's budget submission does not assume savings from 
``management efficiencies,'' that the Government Accountability Office 
(GAO) recently reported, did not materialize in years past.
    I am concerned, however, that the Administration again requests 
legislation to establish enrollment fees and increase pharmacy 
copayments for certain Priority Group 8 veterans. These proposals do 
differ from last year in that they are not assumed as reductions to the 
Administration's request for appropriations. Still, Congress has 
emphatically rejected similar legislative proposals the last 4 years 
running and I am certain that the political will of this Congress will 
not support these proposals.
    The Administration requests nearly $3 billion for mental health 
services, including $360 million to continue implementation of mental 
health initiatives begun in 2005 to address deficiencies and gaps in 
services. While this amount is substantial, last September, the 
Government Accountability Office (GAO) reported that VA had not used 
all of the mental health funds Congress allocated in 2005. We must have 
a better handle on how much and in what way VA is spending its 
resources to meet the emerging demand for mental health services, 
especially Post Traumatic Stress Disorder (PTSD). VA must plan for and 
fund those programs that have been identified as particularly relevant 
to the needs and requirements of our soldiers.
    The Department of Defense is reporting that more than 12,000 
returning 
wounded servicemembers suffer with Traumatic Brain Injury (TBI). 
Because of the frequency and unique nature of TBI, it is vital that VA 
continues to embrace and enhance an interdisciplinary program to handle 
the medical, psychological, rehabilitation, and prosthetic needs of 
these injured servicemembers. It is a high priority of mine to ensure 
that appropriate funds are available to support important research into 
TBI causes and prevention and efforts for early identification and 
better clinical diagnosis to separate TBI from PTSD.
    The Administration's budget request includes $740 million for major 
and minor medical facility construction, more than a 60-percent 
increase over the FY 2007 request.
    Three years ago, the Capital Asset Realignment for Enhanced 
Services (CARES) Commission identified the Florida Panhandle region as 
underserved for inpatient care. In fact, it is the only market area in 
the VISN, VISN 16, without a medical center.
    The absence of a VA inpatient facility continues to be one of the 
biggest concerns of the more than 100,000 veterans who live in my 
Congressional District. Currently, many of these veterans have to drive 
to Mississippi to receive inpatient care.
    The VA patient workload in the State of Florida is among the 
highest in the Nation and the demand for VA healthcare continues to 
grow, especially in Okaloosa County, the center of my Congressional 
District.
    Bringing a full service VA hospital to the first district is 
something I have been fighting for. I look forward to working with the 
Department in support of VA's overall capital construction program to 
address the issue of providing timely access to inpatient healthcare 
for veterans living in and around Okaloosa County.
    In conclusion, I thank our witnesses for appearing today, and look 
forward to your testimony.
    Thank you, Mr. Chairman, I ask that my statement be included in the 
record, and yield back the balance of my time.

                                 
             Prepared Statement of Hon. Henry E. Brown, Jr.
    Chairman Michaud and Ranking Member Miller, thank you for calling 
this important hearing to discuss the Department's Fiscal Year 2008 
Budget for Veterans' Healthcare. I look forward to the testimony from 
our witnesses and discussing what has been such an important issue for 
me during my time in Congress.
    As Chairman of this Subcommittee during the 109th 
Congress, I was proud to share an equal commitment with Mr. Michaud to 
the well-being of our veterans, and I am glad to see that the 
Subcommittee is in your very able hands. The same sentiments go to 
Ranking Member Miller, who I know is committed to working for the good 
of our nation's veterans.
    This budget, overall, represents just how far we have come since 
2001 in meeting the needs of our nation's veterans. Funding for the VA 
has increased every single year, with medical care dollars a special 
priority of Congress. And during that time, we have seen the VA, 
Congress, and the VSOs come together and work on a number of priority 
issues: the process VA uses to estimate its budgetary needs, the 
centralization of VA's IT, and the move by the VA and DoD to a common 
electronic medical record. These moves, which are at varying stages of 
completion, will ensure the VA truly requests what it needs, protects 
the security of private records, and provides a seamless transition for 
our uniformed men and women into the VA system.
    During this hearing, I want to focus on a few areas, especially 
advanced planning for a joint use facility at the Charleston VAMC, and 
how the VA manages treatment and research related to ALS, a terrible 
disease that has affected a high percentage of veterans. ALS has 
touched one of my friends, former Air Force General Tom Mikolajcik. A 
27-year Air Force veteran, Tom commanded a C-130 Wing during the Gulf 
War and lead Charleston Air Force Base as the C-17 was deployed. 
General Mikolajcik commanded all air operations during the first U.S. 
operations in Somalia. And General Mikolajcik suffers from ALS.
    Even with this debilitating disease, Tom is an extremely active 
member of the Charleston community, especially as it continues to move 
past the closure of the Naval Base. We owe it to veterans like Tom to 
provide the best possible care to veterans with service-connected ALS, 
and to use the resources available for researching new treatments.
    I look forward to hearing from our witnesses on these and other 
important issues. Mr. Chairman, I yield back my time.

                                 
               Prepared Statement of Hon. John T. Salazar
    Thank you, Mr. Chairman.
    While many areas of this budget have proposed increases, I'm 
concerned to see that the Administration would like to cut funding for 
Medical and Prosthetic Research.
    Because of advances in medicine, soldiers are returning from Iraq 
and Afghanistan that may not have survived in past wars.
    We have had over 50,000 soldiers injured in Iraq and Afghanistan, a 
large number who are amputees.
    The twentieth century has seen advances never before imagined in 
prosthetic research.
    The most exciting advances have been in myoelectric prosthetic 
limbs.
    Myoelectricity involves using electrical signals from the patients 
arm or leg muscles to move the limb.
    Just last week I had an opportunity to see this technology in 
action at Walter Reed Medical Center.
    Mr. Chairman, I urge this Committee and its Members to oppose any 
cuts to Medical and Prosthetic Research that could damage the quality 
of life for our American heroes.

                                 
      Prepared Statement of Michael J. Kussman, M.D., M.S., MACP,
 Acting Under Secretary for Health, U.S. Department of Veterans Affairs
    Mr. Chairman and Members of the Committee, good morning. I am 
pleased to be here today to present the President's 2008 budget 
proposal for the Veterans Health Administration (VHA). We are 
requesting $36.6 billion for medical care in 2008, a total more than 83 
percent higher than the funding available at the beginning of the Bush 
Administration. Our total medical care request is comprised of funding 
for medical services ($27.2 billion), medical administration ($3.4 
billion), medical facilities ($3.6 billion), and resources from medical 
care collections ($2.4 billion).
    The President's requested funding level will allow the Veterans 
Health Administration (VHA) to continue to provide timely, high-quality 
healthcare to a growing number of patients who count on VA the most--
veterans returning from service in Operation Iraqi Freedom and 
Operation Enduring Freedom, veterans with service-connected 
disabilities, those with lower incomes, and veterans with special 
healthcare needs.
Ensuring a Seamless Transition from Active Military Service to Civilian 
        Life
    The President's 2008 budget request provides the resources 
necessary to ensure that service members' transition from active duty 
military status to civilian life continues to be as smooth and seamless 
as possible. We will continue to ensure that every seriously injured or 
ill serviceman or woman returning from combat in Operation Iraqi 
Freedom and Operation Enduring Freedom receives the treatment they need 
in a timely way.
    Last week, Secretary Nicholson announced plans to create a special 
Advisory Committee on Operation Iraqi Freedom/Operation Enduring 
Freedom Veterans and Families. The panel, with membership including 
veterans, spouses, survivors, and parents of the latest generation of 
combat veterans, will report directly to the Secretary. Under its 
charter, the Committee will focus on the concerns of all men and women 
with active military service in Operation Iraqi Freedom or Operation 
Enduring Freedom, but will pay particular attention to severely 
disabled veterans and their families.
    VA launched an ambitious outreach initiative to ensure separating 
combat veterans know about the benefits and services available to them. 
During 2006 VA conducted over 8,500 briefings attended by more than 
393,000 separating service members and returning reservists and 
National Guard members. The number of attendees was 20 percent higher 
in 2006 than it was in 2005 attesting to our improved outreach effort.
    Additional pamphlet mailings following separation and briefings 
conducted at town hall meetings are sources of important information 
for returning National Guard members and reservists. VA has made a 
special effort to work with National Guard and reserve units to reach 
transitioning servicemembers at demobilization sites and has trained 
recently discharged veterans to serve as National Guard Bureau liaisons 
in every state to assist their fellow combat veterans.
    Each VA medical center has a designated point of contact to 
coordinate activities locally and to ensure the healthcare needs of 
returning servicemembers and veterans are fully met. VA has distributed 
specific guidance to field staff to make sure the roles and functions 
of the points of contact and case managers are fully understood and 
that proper coordination of benefits and services occurs at the local 
level.
    For combat veterans returning from Iraq and Afghanistan, their 
contact with VA often begins with priority scheduling for healthcare, 
and for the most seriously wounded, VA counselors visit their bedside 
in military wards before separation to assist them with their 
disability claims and ensure timely compensation payments when they 
leave active duty.
    In an effort to assist wounded military members and their families, 
VA has placed workers at key military hospitals where severely injured 
servicemembers from Iraq and Afghanistan are frequently sent for care. 
These include benefit counselors who help servicemembers obtain VA 
services as well as social workers who facilitate healthcare 
coordination and discharge planning as servicemembers transition from 
military to VA healthcare. Under this program, VA staff provides 
assistance at 10 military treatment facilities around the country, 
including Walter Reed Army Medical Center, the National Naval Medical 
Center Bethesda, the Naval Medical Center San Diego, and Womack Army 
Medical Center at Ft. Bragg.
    To further meet the need for specialized medical care for patients 
with service in Operation Iraqi Freedom and Operation Enduring Freedom, 
VA has expanded its four polytrauma centers in Minneapolis, Palo Alto, 
Richmond, and Tampa to encompass additional specialties to treat 
patients for multiple complex injuries. Our efforts are being expanded 
to 21 polytrauma network sites and clinic support teams around the 
country providing state-of-the-art treatment closer to injured 
veterans' homes. We have made training mandatory for all physicians and 
other key healthcare personnel on the most current approaches and 
treatment protocols for effective care of patients afflicted with brain 
injuries. Furthermore, we established a polytrauma call center in 
February 2006 to assist the families of our most seriously injured 
combat veterans and servicemembers. This call center operates 24 hours 
a day, 7 days a week to answer clinical, administrative, and benefit 
inquiries from polytrauma patients and family members.
    In addition, VA has significantly expanded its counseling and other 
medical care services for recently discharged veterans suffering from 
mental health disorders, including post-traumatic stress disorder. We 
have launched new programs, including dozens of new mental health teams 
based in VA medical facilities focused on early identification and 
management of stress-related disorders, as well as the recruitment of 
about 100 combat veterans as counselors to provide briefings to 
transitioning servicemembers regarding military-related readjustment 
needs.
Legislative Proposals
    The President's 2008 budget request identifies three legislative 
proposals which ask veterans with comparatively greater means and no 
compensable service-connected disabilities to assume a small share of 
the cost of their healthcare.
    The first proposal would assess Priority 7 and 8 veterans with an 
annual enrollment fee based on their family income:

------------------------------------------------------------------------
               Family Income                    Annual Enrollment Fee
------------------------------------------------------------------------
Under $50,000                                                      None
------------------------------------------------------------------------
$50,000-$74,999                                                    $250
------------------------------------------------------------------------
$75,000-$99,999                                                    $500
------------------------------------------------------------------------
$100,000 and above                                                 $750
------------------------------------------------------------------------

    The second legislative proposal would increase the pharmacy 
copayment for Priority 7 and 8 veterans from $8 to $15 for a 30-day 
supply of drugs. And the last provision would eliminate the practice of 
offsetting or reducing VA first-party copayment debts with collection 
recoveries from third-party health plans.
    While our budget requests in recent years have included legislative 
proposals similar to these, the provisions identified in the 
President's 2008 budget are markedly different in that they have no 
impact on the resources we are requesting for VA medical care. Our 
budget request includes the total funding needed for the Department to 
continue to provide veterans with timely, high-quality medical services 
that set the national standard of excellence in the healthcare 
industry. Unlike previous budgets, these legislative proposals do not 
reduce our discretionary medical care appropriations. Instead, these 
three provisions, if enacted, would generate an estimated $2.3 billion 
in mandatory receipts to the Treasury from 2008 through 2012.
Workload
    During 2008, we expect to treat about 5,819,000 patients. This 
total is more than 134,000 (or 2.4 percent) above the 2007 estimate. 
Patients in Priorities 1-6--veterans with service-connected conditions, 
lower incomes, special healthcare needs, and service in Iraq or 
Afghanistan--will comprise 68 percent of the total patient population 
in 2008, but they will account for 85 percent of our healthcare costs. 
The number of patients in Priorities 1-6 will grow by 3.3 percent from 
2007 to 2008.
    We expect to treat about 263,000 veterans in 2008 who served in 
Operation Iraqi Freedom and Operation Enduring Freedom. This is an 
increase of 54,000 (or 26 percent) above the number of veterans from 
these two campaigns that we anticipate will come to VA for healthcare 
in 2007, and 108,000 (or 70 percent) more than the number we treated in 
2006.
Funding Drivers
      Our 2008 request for $36.6 billion in support of our 
medical care program was largely determined by three key cost drivers 
in the actuarial model we use to project veteran enrollment in VA's 
healthcare system as well as the utilization of healthcare services of 
those enrolled:

        inflation;
        trends in the overall healthcare industry; and
        trends in VA healthcare.

    The impact of the composite rate of inflation of 4.45 percent 
within the actuarial model will increase our resource requirements for 
acute inpatient and outpatient care by nearly $2.1 billion. This 
includes the effect of additional funds ($690 million) needed to meet 
higher payroll costs as well as the influence of growing costs ($1.4 
billion) for supplies, as measured in part by the Medical Consumer 
Price Index. However, inflationary trends have slowed during the last 
year.
    There are several trends in the U.S. healthcare industry that 
continue to increase the cost of providing medical services. These 
trends expand VA's cost of doing business regardless of any changes in 
enrollment, number of patients treated, or program initiatives. The two 
most significant trends are the rising utilization and intensity of 
healthcare services. In general, patients are using medical care 
services more frequently and the intensity of the services they receive 
continues to grow. For example, sophisticated diagnostic tests, such as 
magnetic resonance imaging (MRI), are now more frequently used either 
in place of, or in addition to, less costly diagnostic tools such as x-
rays. As another illustration, advances in cancer screening 
technologies have led to earlier diagnosis and prolonged treatment 
which may include increased use of costly pharmaceuticals to combat 
this disease. These types of medical services have resulted in improved 
patient outcomes and higher quality healthcare. However, they have also 
increased the cost of providing care.
    The cost of providing timely, high-quality healthcare to our 
Nation's veterans is also growing as a result of several factors that 
are unique to VA's healthcare system. We expect to see changes in the 
demographic characteristics of our patient population. Our patients as 
a group will be older, will seek care for more complex medical 
conditions, and will be more heavily concentrated in the higher cost 
priority groups. Furthermore, veterans are submitting disability 
compensation claims for an increasing number of medical conditions, 
which are also increasing in complexity. This results in the need for 
disability compensation medical examinations, the majority of which are 
conducted by our Veterans Health Administration, that are more complex, 
costly, and time consuming. These projected changes in the case mix of 
our patient population and the growing complexity of our disability 
claims process will result in greater resource needs.
Quality of Care
    The resources we are requesting for VA's medical care program will 
allow us to strengthen our position as the Nation's leader in providing 
high-quality healthcare. VA has received numerous accolades from 
external organizations documenting the Department's leadership position 
in providing world-class healthcare to veterans. For example, our 
record of success in healthcare delivery is substantiated by the 
results of the 2006 American Customer Satisfaction Index (ACSI) survey. 
Conducted by the National Quality Research Center at the University of 
Michigan Business School, the ACSI survey found that customer 
satisfaction with VA's healthcare system increased last year and was 
higher than the private sector for the seventh consecutive year. The 
data revealed that inpatients at VA medical centers recorded a 
satisfaction level of 84 out of a possible 100 points, or 10 points 
higher than the rating for inpatient care provided by the private-
sector healthcare industry. VA's rating of 82 for outpatient care was 8 
points better than the private sector.
    Citing VA's leadership role in transforming healthcare in America, 
Harvard University recognized the Department's computerized patient 
records system by awarding VA the prestigious ``Innovations in American 
Government Award'' in 2006. Our electronic health records have been an 
important element in making VA healthcare the benchmark for 294 
measures of disease prevention and treatment in the U.S. The value of 
this system was clearly demonstrated when every patient medical record 
from the areas devastated by Hurricane Katrina was made available to 
all VA healthcare providers throughout the Nation within 100 hours of 
the time the storm made landfall. Veterans were able to quickly resume 
their treatments, refill their prescriptions, and get the care they 
needed because of the electronic health records system--a real, 
functioning health information exchange that has been a proven success 
resulting in improved quality of care. It can serve as a model for the 
healthcare industry as the Nation moves forward with the public/private 
effort to develop a National Health Information Network.
    The Department also received an award from the American Council for 
Technology for our collaboration with the Department of Defense on the 
Bidirectional Health Information Exchange program. This innovation 
permits the secure, real-time exchange of medical record data between 
the two departments, thereby avoiding duplicate testing and surgical 
procedures. It is an important step forward in making the transition 
from active duty to civilian life as smooth and seamless as possible.
    In its July 17, 2006, edition, Business Week featured an article 
about VA healthcare titled ``The Best Medical Care in the U.S.'' This 
article outlines many of the Department's accomplishments that have 
helped us achieve our position as the leading provider of healthcare in 
the country, such as higher quality of care than the private sector, 
our nearly perfect rate of prescription accuracy, and the most advanced 
computerized medical records system in the Nation. Similar high praise 
for VA's healthcare system was documented in the September 4, 2006, 
edition of Time Magazine in an article titled ``How VA Hospitals Became 
the Best.'' In addition, a study conducted by Harvard Medical School 
concluded that federal hospitals, including those managed by VA, 
provide the best care available for some of the most common life-
threatening illnesses such as congestive heart failure, heart attack, 
and pneumonia. Their research results were published in the December 
11, 2006, edition of the Annals of Internal Medicine.
    These external acknowledgments of the superior quality of VA 
healthcare reinforce the Department's own findings. We use two primary 
measures of healthcare quality--clinical practice guidelines index and 
prevention index. These measures focus on the degree to which VA 
follows nationally recognized guidelines and standards of care that the 
medical literature has proven to be directly linked to improved health 
outcomes for patients. Our performance on the clinical practice 
guidelines index, which focuses on high-prevalence and high-risk 
diseases that have a significant impact on veterans' overall health 
status, is expected to grow to 85 percent in 2008, or a 1 percentage 
point rise over the level we expect to achieve this year. As an 
indicator aimed at primary prevention and early detection 
recommendations dealing with immunizations and screenings, the 
prevention index will be maintained at our existing high level of 
performance of 88 percent.
Access to Care
    With the resources requested for medical care in 2008, the 
Department will be able to continue our exceptional performance dealing 
with access to healthcare--96 percent of primary care appointments will 
be scheduled within 30 days of patients' desired date, and 95 percent 
of specialty care appointments will be scheduled within 30 days of 
patients' desired date. We will minimize the number of new enrollees 
waiting for their first appointment. We reduced this number by 94 
percent from May 2006 to January 2007, to a little more than 1,400, and 
we will continue to place strong emphasis on lowering, and then 
holding, the waiting list to as low a level as possible.
    An important component of our overall strategy to improve access 
and timeliness of service is the implementation on a national scale of 
Advanced Clinic Access, an initiative that promotes the efficient flow 
of patients by predicting and anticipating patient needs at the time of 
their appointment. This involves assuring that specific medical 
equipment is available, arranging for tests that should be completed 
either prior to, or at the time of, the patient's visit, and ensuring 
all necessary health information is available. This program optimizes 
clinical scheduling so that each appointment or inpatient service is 
most productive. In addition, this reduces unnecessary appointments, 
allowing for relatively greater workload and increased patient-directed 
scheduling.
Funding for Major Healthcare Programs and Initiatives
    Our request includes $4.6 billion for extended care services, 90 
percent of which will be devoted to institutional long-term care and 10 
percent to non-institutional care. By continuing to enhance veterans' 
access to non-institutional long-term care, the Department can provide 
extended care services to veterans in a more clinically appropriate 
setting, closer to where they live, and in the comfort and familiar 
settings of their homes surrounded by their families. This includes 
adult day healthcare, home-based primary care, purchased skilled home 
healthcare, homemaker/home health aide services, home respite and 
hospice care, and community residential care. During 2008 we will 
increase the number of patients receiving non-institutional long-term 
care, as measured by the average daily census, to over 44,000. This 
represents a 19.1-percent increase above the level we expect to reach 
in 2007 and a 50.3-percent rise over the 2006 average daily census.
    The President's request includes nearly $3 billion to continue our 
effort to improve access to mental health services across the country. 
These funds will help ensure VA provides standardized and equitable 
access throughout the Nation to a full continuum of care for veterans 
with mental health disorders. The resources will support both inpatient 
and outpatient psychiatric treatment programs as well as psychiatric 
residential rehabilitation treatment services. We estimate that about 
80 percent of the funding for mental health will be for the treatment 
of seriously mentally ill veterans, including those suffering from 
post-traumatic stress disorder (PTSD). An example of our firm 
commitment to provide the best treatment available to help veterans 
recover from these mental health conditions is our ongoing outreach to 
veterans of Operation Iraqi Freedom and Operation Enduring Freedom, as 
well as increased readjustment and PTSD services.
    In 2008 we are requesting $752 million to meet the needs of the 
263,000 veterans with service in Operation Iraqi Freedom and Operation 
Enduring Freedom whom we expect will come to VA for medical care. 
Veterans with service in Iraq and Afghanistan continue to account for a 
rising proportion of our total veteran patient population. In 2008 they 
will comprise 5 percent of all veterans receiving VA healthcare 
compared to the 2006 figure of 3.1 percent. Veterans deployed to combat 
zones are entitled to 2 years of eligibility for VA healthcare services 
following their separation from active duty even if they are not 
otherwise immediately eligible to enroll for our medical services.

Medical Collections
    The Department expects to receive nearly $2.4 billion from medical 
collections in 2008, which is $154 million, or 7.0 percent, above our 
projected collections for 2007. As a result of increased workload and 
process improvements in 2008, we will collect an additional $82 million 
from third-party insurance payers and an extra $72 million resulting 
from increased pharmacy workload.
    We have several initiatives underway to strengthen our collections 
processes:

      The Department has established a private-sector based 
business model pilot tailored for our revenue operations to increase 
collections and improve our operational performance. The pilot 
Consolidated Patient Account Center (CPAC) is addressing all 
operational areas contributing to the establishment and management of 
patient accounts and related billing and collections processes. The 
CPAC currently serves revenue operations for medical centers and 
clinics in one of our Veterans Integrated Service Networks but this 
program will be expanded to serve other networks.
      VA continues to work with the Centers for Medicare and 
Medicaid Services contractors to provide a Medicare-equivalent 
remittance advice for veterans who are covered by Medicare and are 
using VA healthcare services. We are working to include additional 
types of claims that will result in more accurate payments and better 
accounting for receivables through use of more reliable data for claims 
adjudication.
      We are conducting a phased implementation of electronic, 
real-time outpatient pharmacy claims processing to facilitate faster 
receipt of pharmacy payments from insurers.
      The Department has initiated a campaign that has resulted 
in an increasing number of payers now accepting electronic coordination 
of benefits claims. This is a major advancement toward a fully 
integrated, interoperable electronic claims process.

Medical Research
    The President's 2008 budget includes $411 million to support VA's 
medical and prosthetic research program. This amount will fund nearly 
2,100 high-priority research projects to expand knowledge in areas 
critical to veterans' healthcare needs, most notably research in the 
areas of mental illness ($49 million), aging ($42 million), health 
services delivery improvement ($36 million), cancer ($35 million), and 
heart disease ($31 million).
    VA's medical research program has a long track record of success in 
conducting research projects that lead to clinically useful 
interventions that improve the health and quality of life for veterans 
as well as the general population. Recent examples of VA research 
results that are now being applied to clinical care include the 
discovery that vaccination against varicella-zoster (the same virus 
that causes chickenpox) decreases the incidence and/or severity of 
shingles, development of a system that decodes brain waves and 
translates them into computer commands that allow quadriplegics to 
perform simple tasks like turning on lights and opening e-mail using 
only their minds, improvements in the treatment of post-traumatic 
stress disorder that significantly reduce trauma nightmares and other 
sleep disturbances, and discovery of a drug that significantly improves 
mental abilities and behavior of certain schizophrenics.
    In addition to VA appropriations, the Department's researchers 
compete for and receive funds from other federal and non-federal 
sources. Funding from external sources is expected to continue to 
increase in 2008. Through a combination of VA resources and funds from 
outside sources, the total research budget in 2008 will be almost $1.4 
billion.

Capital Programs (Construction and Grants to States)
    The 2008 request for construction funding for our healthcare 
programs is $750 million--$570 million for major construction and $180 
million for minor construction. All of these resources will be devoted 
to continuation of the Capital Asset Realignment for Enhanced Services 
(CARES) program, total funding for which comes to $3.7 billion over the 
last 5 years. CARES will renovate and modernize VA's healthcare 
infrastructure, provide greater access to high-quality care for more 
veterans, closer to where they live, and help resolve patient safety 
issues. Within our request for major construction are resources to 
continue six medical facility projects already underway:

      Denver, Colorado ($61.3 million)--parking structure and 
energy development for this replacement hospital.
      Las Vegas, Nevada ($341.4 million)--complete construction 
of the hospital, nursing home, and outpatient facilities.
      Lee County, Florida ($9.9 million)--design of an 
outpatient clinic (land acquisition is complete).
      Orlando, Florida ($35.0 million)--land acquisition for 
this replacement hospital.
      Pittsburgh, Pennsylvania ($40.0 million)--continue 
consolidation of a 3-division to a 2-division hospital.
      Syracuse, New York ($23.8 million)--complete construction 
of a spinal cord injury center.

    Minor construction is an integral component of our overall capital 
program. In support of the medical care and medical research programs, 
minor construction funds permit VA to address space and functional 
changes to efficiently shift treatment of patients from hospital-based 
to outpatient care settings; realign critical services; improve 
management of space, including vacant and underutilized space; improve 
facility conditions; and undertake other actions critical to CARES 
implementation. Our 2008 request for minor construction funds for 
medical care and research will provide the resources necessary for us 
to address critical needs in improving access to healthcare, enhancing 
patient privacy, strengthening patient safety, enhancing research 
capability, correcting seismic deficiencies, facilitating realignments, 
increasing capacity for dental services, and improving treatment in 
special emphasis programs.

Information Technology
    The most critical IT project for our medical care program is the 
continued operation and improvement of the Department's electronic 
health record system, a Presidential priority which has been recognized 
nationally for increasing productivity, quality, and patient safety. 
Within this overall initiative, we are requesting $131.9 million for 
ongoing development and implementation of HealtheVet-VistA (Veterans 
Health Information Systems and Technology Architecture). This 
initiative will incorporate new technology, new or reengineered 
applications, and data standardization to improve the sharing of, and 
access to, health information, which in turn, will improve the status 
of veterans' health through more informed clinical care. This system 
will make use of standards accepted by the Secretary of Health and 
Human Services that will enhance the sharing of data within VA as well 
as with other federal agencies and public and private sector 
organizations. Health data will be stored in a veteran-centric format 
replacing the current facility-centric system. The standardized health 
information can be easily shared between facilities, making patients' 
electronic health records available to them and to all those authorized 
to provide care to veterans.
    Until HealtheVet-VistA is operational, we need to maintain the 
VistA legacy system. This system will remain operational as new 
applications are developed and implemented. This approach will mitigate 
transition and migration risks associated with the move to the new 
architecture. Our budget provides $129.4 million in 2008 for the VistA 
legacy system. Funding for the legacy system will decline as we advance 
our development and implementation of HealtheVet-VistA.

Summary
    Our 2008 budget request of $36.6 billion for medical care will 
provide the resources necessary for VA to strengthen our position as 
the Nation's leader in providing high-quality healthcare to a growing 
patient population, with an emphasis on those who count on us the 
most--veterans returning from service in Operation Iraqi Freedom and 
Operation Enduring Freedom, veterans with service-connected 
disabilities, those with lower incomes, and veterans with special 
healthcare needs.
    Mr. Chairman, I am very proud to be leading the Veterans Health 
Administration at this time. I am proud of our system and its 
accomplishments, and l look forward to working with the Members of this 
Committee to continue the Department's tradition of providing timely, 
high-quality healthcare to those who have helped defend and preserve 
freedom around the world.

                                 
             Prepared Statement of Joseph T. English, M.D.,
      Member, Board of Trustees, American Psychiatric Association
    Mr. Chairman and Members of the Subcommittee, I am Joseph T. 
English, M.D., the Chairman of St. Vincent's Catholic Medical Centers 
of New York City and Professor and Chairman of Psychiatry at New 
Medical College. New Medical College is affiliated with two VA hospital 
centers: Montrose and Castle Point. I thank you for the opportunity to 
present the American Psychiatric Association's (APA) recommendations 
for appropriations for the Department of Veterans Affairs (VA) 
healthcare and medical research programs for fiscal year (FY) 2008. The 
APA consists of over 37,000 psychiatric physicians nationwide who 
specialize in the diagnosis and treatment of mental and emotional 
illnesses and substance use disorders.
    First, I would like to thank the Members of the Subcommittee and 
your House colleagues for your commitment to providing the highest 
quality medical care for our nation's veterans and for supporting 
necessary research to advance the quality of that care.
    The APA is grateful for the $786 million the President requested 
for Outpatient Mental Health Care, Readjustment Counseling and VA 
Mental Health Initiative.\1\ Sadly, it may not be adequate to meet the 
growing needs of veterans with mental illnesses.
---------------------------------------------------------------------------
    \1\ Combination of: Outpatient Mental Health Care $311m, 
Readjustment Counseling $115m and Mental Health Initiative $360m from 
the President's Fiscal Year 2008 Budget Proposal.
---------------------------------------------------------------------------
Current and Emerging Needs of OEF/OIF Vets
    VA and the Department of Defense (DoD) are well aware that a 
significant percentage of combat veterans of Operations Enduring and 
Iraqi Freedom (OEF/OIF) are at risk for PTSD and other mental health 
problems. In a 2006 study published in the Journal of the American 
Medical Association, Col. Charles Hoge, M.D., of the Walter Reed 
Military Research Institute, evaluated relationships between combat 
deployment and mental healthcare use in the first year following return 
from the war.
    The Hoge study found that 19 percent of soldiers and Marines who 
had returned from Iraq screened positive for mental health problems 
including PTSD, generalized anxiety, and depression. Col. Hoge reported 
that mental health problems recorded on the post-deployment self-
assessments by military servicemembers were significantly associated 
with combat experiences and mental healthcare referral and utilization. 
Thirty-five percent of Iraq war veterans had received mental health 
services in the year after returning home, and 12 percent each year 
were diagnosed with a mental problem. According to study findings, 
mental health problems remained elevated at 12 months post-deployment 
among soldiers preparing to return to Iraq for a second deployment. 
Col. Hoge postulated that although OIF veterans are using mental health 
services at a high rate, many military personnel with mental health 
concerns do not seek help due to fear of stigma and other barriers. The 
study revealed that service members resisted care because of personal 
concerns over being perceived as weak--or that seeking treatment would 
have a negative impact on their military career. Finally, Col. Hoge 
noted that the high use rate of mental health services among veterans 
who served in Iraq following deployment illustrates the challenges in 
ensuring that there are adequate resources to meet the mental health 
needs of this group, both within the military services themselves and 
in follow-on VA programs.
    The VA healthcare system is also seeing increasing trends of 
healthcare utilization among OEF/OIF veterans. VA reports that veterans 
of these current wars seek care for a wide range of possible medical 
and psychological conditions, including mental health conditions such 
as adjustment disorder, anxiety, depression, PTSD, and the effects of 
substance abuse. As of November 2006, VA reported that of the 205,000 
separated OEF/OIF veterans who have sought VA healthcare since fiscal 
year 2002, a total of 73,157 unique patients have received a diagnosis 
of a possible mental health disorder. Nearly 34,000 of the enrolled 
OEF/OIF veterans had a probable diagnosis of PTSD.\2\
---------------------------------------------------------------------------
    \2\ Independent Budget, Critical Issues Report on Fiscal Year 2008.
---------------------------------------------------------------------------
    VA has intensified its outreach efforts to OEF/OIF veterans and 
reports that the relatively high rates of healthcare utilization among 
this group reflect the fact that these veterans have ready access to VA 
healthcare, which is free of charge for 2 years following separation 
from service for problems related to their wartime service. However, VA 
estimates that only 109,191 veterans of the Iraq and Afghanistan wars 
will be seen in VA facilities in 2007 (1,375 fewer than expected to see 
in 2006). With increased outreach, internal mental health screening 
efforts underway, and expanded access to healthcare for OEF/OIF 
veterans, we are concerned that these estimates are artificially low 
and could result in a shortfall in funding necessary to meet the 
demand.
VA's PTSD Programs
    According to VA, it operates a network of more than 190 specialized 
PTSD outpatient treatment programs throughout the country, including 
specialized PTSD clinical teams or a PTSD specialist at each VA medical 
center. Vet centers, which provide readjustment counseling in 207 
community-based centers, have reported rapidly increasing enrollment in 
their programs, with nearly 77,000 readjustment counseling visits of 
OEF/OIF veterans in fiscal year 2005 and projected visits of 242,000 in 
fiscal year 2006.
    Because of increased roles of women in the military and their 
exposure to combat in OEF/OIF theaters, we encourage VA to continue to 
address, through its treatment programs and research initiatives, the 
unique needs of women veterans related to treatment of PTSD and 
military sexual trauma. Although VA has improved access to mental 
health services at its 800-plus community-based outpatient clinics, 
such services are still not readily available at all sites. Likewise, 
VA has not yet achieved its goal of integration of mental health staff 
in all its primary care clinics. Also, we remain concerned about the 
capacity of specialized PTSD programs and the decline in availability 
of VA substance-use disorder programs of all kinds over time, including 
virtual elimination of inpatient detoxification and residential 
treatment beds. Although additional funding has been dedicated to 
improving capacity in some programs, VA mental health providers 
continue to express concerns about inadequate resources to support, and 
consequently rationed access to, these specialized services.
Mental Health and Traumatic Brain Injury
    Traumatic brain injury (TBI)--caused by IEDs, vehicular accidents, 
gunshot or shell fragment wounds, falls, and other traumatic injuries 
to the brain and upper spinal cord--is the signature injury of 
Operations Enduring and Iraqi Freedom. Severe TBI resulting from blast 
injuries or powerful bomb detonations that severely shake or compress 
the brain within the skull often causes devastating and permanent 
damage to brain tissue. Likewise, veterans who are in the vicinity of 
an IED blast or involved in a motor vehicle accident can suffer from a 
milder form of TBI that is not always immediately detected and can 
produce symptoms that mimic PTSD or other mental health disorders. 
Research from Charles Marmar, M.D., at the San Francisco VA Clinic 
indicates that many OEF/OIF veterans have suffered mild brain injuries 
or concussions that have gone undiagnosed and that injury symptoms will 
only be detected later when these veterans return home.
    We are concerned about emerging literature \3\ that strongly 
suggests that even ``mild'' TBI patients may have long-term mental and 
medical health consequences. The DoD admits that it lacks a system-wide 
approach for proper identification, management, and surveillance for 
individuals who sustain mild to moderate TBI/concussion, in particular 
mild TBI/concussion. Therefore, the VA should coordinate with the DoD 
to better address mild TBI/concussion injuries and develop a 
standardized followup protocol utilizing appropriate clinical 
assessment techniques to recognize neurological and behavioral 
consequences of TBI as recommended by the Armed Forces Epidemiological 
Board.
---------------------------------------------------------------------------
    \3\ August 11, 2006, memorandum, issued by the Armed Forces 
Epidemiological Board regarding Traumatic Brain Injury in Military 
Servicemembers.
---------------------------------------------------------------------------
    The VA has designated TBI as one of its special emphasis programs 
and is committed to working with the DoD to provide comprehensive acute 
and long-term rehabilitative care for veterans with brain injuries. We 
are encouraged that VA has responded to the growing demand for 
specialized TBI care and, fulfilling the requirements of Public Law 
108-422, established four polytrauma rehabilitation centers (PRCs) that 
are collocated with the existing TBI lead centers. However, we remain 
concerned about capacity and whether VA has fully addressed the 
resources and staff necessary to provide intensive rehabilitation 
services, treat the long-term emotional and behavioral problems that 
are often associated with TBI, and support families and caregivers of 
these seriously brain injured veterans.
Long-Term Mental Health Services for Veterans
    Over the past 15 years, there has been an increase in the number of 
veterans with serious mental illnesses being treated by the VA. This is 
partially attributable to other avenues of care becoming closed (e.g., 
when private insurance coverage for mental illness becomes exhausted or 
Medicaid systems are stretched to the breaking point). Over 90% of the 
veterans being treated for psychosis are so ill that they cannot 
maintain a significant income and therefore become indigent and heavily 
reliant on the VA for their care.
    Until recently, mental healthcare has not been a priority for VA. 
Virtually every entity with oversight of VA mental healthcare 
programs--including Congressional oversight committees, the GAO, VA's 
Committee on Care of Veterans with Serious Mental Illness, and The 
Independent Budget--have documented both the extensive closures of 
specialized inpatient mental health programs and VA's failure in many 
locations to replace those services with accessible community-based 
programs. The resultant dearth of specialized inpatient care capacity 
and the failure of many networks to establish or provide appropriate 
specialized programs effectively deny many veterans access to needed 
care. These gaps highlight VA's ongoing problems in meeting statutory 
requirements to maintain a benchmark capacity to provide needed care 
and rehabilitation through distinct specialized treatment programs and 
a comprehensive array of services.
    Congress has directed the VA to substantially expand the number and 
scope of specialized mental health and substance abuse programs to 
improve veterans' access to needed specialized care and services (P.L. 
107-135). The law details the VA's obligation to make systemic changes 
network-by-network to reverse the erosion of that specialized capacity. 
Congress has made clear that the criteria by which the ``maintain 
capacity'' obligation is to be met are hard, measurable indicators that 
are to be followed by all Veterans Integrated Service Networks (VISNs).
Substance Abuse Treatment
    Veterans with substance use disorders are drastically underserved. 
It has been the experience of some of my colleagues in the VA that 
returning soldiers with PTSD often try to mask their anxiety and panic 
symptoms by using alcohol or drugs such as marijuana. The APA is 
concerned that veterans who may be waiting for specialized substance 
abuse care may in fact have co-occurring PTSD that has not been 
adequately identified, or that vets are forced onto a wait list for a 
substance abuse treatment bed. A delay in treatment can have serious 
consequences. The dramatic decline in VA substance use treatment beds 
has reduced physicians' ability to provide veterans a full continuum of 
care, often needed for those with chronic, severe problems. Funding for 
programs targeted to homeless veterans who have mental illnesses or co-
occurring substance use problems does not now meet the demand for care 
in that population. Additionally, despite the needs of an aging veteran 
population, relatively few VA facilities have specialized 
geropsychiatric programs.
Military Families
    The APA remains deeply concerned about the ancillary mental 
healthcare available from TRICARE to family members of a soldier who is 
deployed. The same holds true for the families of veterans who have 
returned and are experiencing readjustment problems. The VA currently 
only has an informal network of support groups to help families develop 
the coping and support skills necessary when a loved one is 
experiencing PTSD. The TRICARE services available are largely dictated 
by a family's geographic accessibility to a military base. The APA 
would like to encourage the DoD and VA to continue to work together for 
a seamless transition of soldier family to veterans family and that 
family resilience be an important factor in the comprehensive care of 
veterans.
Care for Homeless Veterans
    The APA applauds the inclusion of funds in the Administration's 
budget to enhance and expand services for homeless veterans through the 
Samaritan Initiative, which is co-administered by the Substance Abuse 
and Mental Health Services Administration (SAMHSA) and the Department 
of Housing and Urban Development (HUD). Psychiatric and substance abuse 
disorders contribute significantly to homelessness among veterans. 
Studies show that about one-third, or approximately 250,000 homeless 
individuals have served their country in the armed services. Over 40% 
of homeless veterans suffer from persistent and disabling mental 
illnesses, and 69% have substance abuse disorders. The VA's healthcare 
system is a safety net and, within that context, providing treatment 
and support services for homeless veterans is one of the VA's important 
missions.
MIRECCs and Research
    The APA wishes to compliment the VA for initiating the Mental 
Illnesses Research, Education and Clinical Centers (MIRECCs). The 
MIRECCs serve as infrastructure supports for psychiatric research into 
the most severe mental illnesses. Additionally, the APA would like to 
compliment the VA Research Office for initiating the Quality 
Enhancement Research Initiative (QUERI), which has funded two new field 
centers focused on putting into clinical application evidence-based 
treatment for schizophrenia, depressive disorders, and substance use 
disorders. However, the nominal increase in the President's research 
budget request is likely to limit the implementation of this farsighted 
plan.
    The APA supports the Independent Budget's request for $480 million 
for VA Medical and Prosthetic Research (an increase of $69 million over 
the President's request; with an additional $45 million for research 
facility improvements. Despite high productivity and success, funding 
for VA medical and prosthetic research has not kept pace with other 
federal research programs or with funding for VA medical care. The VA 
research program has done an extraordinary job leveraging its modest 
$412 million FY06 appropriation into a $1.7 billion research enterprise 
that hosts multiple Nobel laureates and produces an exceedingly 
competitive number of scientific papers annually. VA Research awards 
are currently capped at $125,000, significantly lower than comparable 
federal research programs. However, VA investigators would be unable to 
compete for additional funding from other federal sources without the 
initial awards from the Medical and Prosthetic Research account.
    Psychiatric research funding originates with the VA's medical and 
prosthetics budget. Regrettably, it is inadequate to support the full 
costs of the VA research portfolio and fails to provide the resources 
needed to maintain, upgrade and replace aging facilities. VA medical 
and prosthetics research is a national asset that helps to attract 
high-caliber clinicians to practice medicine and conduct research in VA 
healthcare facilities. The resulting environment of medical excellence 
and ingenuity, developed in conjunction with collaborating medical 
schools, benefits every veteran receiving care at VA, and ultimately 
benefits all Americans. VA research is patient-oriented: Over 60% of VA 
researchers treat veterans. As a result, the Veterans Health 
Administration, the largest integrated medical care system in the 
world, has the unparalleled ability to translate progress in medical 
science to improvements in clinical care.
Fellowships, Psychiatric Education and Workforce Issues
    Closely related to research efforts are the training needs of 
professional staff members. The VA should provide sufficient funding to 
the Office of Academic Affiliations for furthering fellowships in the 
field of severe mental illness (SMI) patient care and other areas. 
Fellowships should also emphasize the multidisciplinary needs of 
effective mental healthcare, addressing the elements of a recovery- and 
quality of life-based care system, as well as evidence-based best 
practices in psychosocial rehabilitation.
    The APA applauds the VA for initiating the program for Psychiatric 
Primary Care Education (PsyPCE), which allows psychiatric residents to 
assume the duties of primary care physicians for mentally ill patients 
in mental health and primary care settings. We regard this as an 
opportunity to enhance the capabilities of psychiatric trainees to 
provide psychiatric care at primary care settings in order to reach a 
sector of veterans with psychiatric illness who normally would not have 
come to the attention of mental health professionals. It is, however, 
important for VA to maintain its core psychiatric residency and 
fellowship training capabilities. Rapid expansion of psychiatric 
knowledge and the challenges of providing quality care to veterans at 
different venues would require the availability of additional competent 
psychiatric physicians.
    The shortage of physicians and other mental health professionals 
has compromised the services VA provides and has endangered patient 
safety. Many veterans with mental illnesses are medically fragile--with 
diabetes, liver or kidney failure, or cardiac disease, for example. 
Their care requires a specially trained physician. A revision of salary 
schedules, recognition of the contributions of International Medical 
Graduates and minority American Medical Graduates, and the availability 
of Continuing Medical Education (CME) courses and other professional 
opportunities for advancement need to be addressed. We understand that 
there is a significant shortage of nursing staff--especially 
psychiatric nurses--and we request that the VA address this shortage 
area.
Summary
    Overall, the APA is pleased with the direction VA has taken and the 
progress it has made with respect to its mental health programs. We are 
also pleased that the DoD has acknowledged that it needs to conduct 
more rigorous pre- and post-deployment health assessments and 
reassessments with military service personnel who serve in combat 
theaters and that it is working to improve collaboration with VA to 
ensure this information is accessible to VA clinicians. Likewise, VA 
and the DoD are to be commended for attempting to deal with the issue 
of stigma and the barriers that prevent servicemembers and veterans 
from seeking mental health services. Although we recognize and 
acknowledge both agencies' efforts, the DoD and VA are still far from 
achieving the universal goal of ``seamless transition.''
    Emerging evidence suggests that the burden of combat-related mental 
illness from OEF/OIF will be high. Utilization rates for healthcare and 
mental health services predict an increasing demand for such services 
in the future, and evidence suggests that the current wars are 
presenting new challenges to the DoD and VA healthcare systems. 
Fortunately, Americans are united in agreeing that care for those who 
have been wounded as a result of military service is a continuing cost 
of national defense. PTSD, TBI, and other injuries with mental health 
consequences that are not so easily recognizable can lead to serious 
health catastrophes, including occupational and social disruption, 
personal distress, and even suicide if not treated.
Recommendations
    The APA is deeply concerned about veterans with mental illness and 
substance abuse disorders. We believe it is important to secure:

      additional and specifically allocated funding for mental 
health and substance abuse services;
      immediate nationwide implementation of clinical programs 
mandated within the system;
      enforcement of compliance with legislation aimed at 
maintaining capacity; and
      enhanced recruitment and retention of personnel who will 
improve the care and lives of veterans with mental illnesses and 
substance abuse disorders.

    The APA is concerned that VA mental health service delivery has not 
kept pace with advances in the field. State-of-the-art care requires an 
array of services that include intensive case management, access to 
substance abuse treatment, peer support and psychosocial 
rehabilitation, pharmacologic treatment, housing, employment services, 
independent living and social skills training, and psychological 
support to help veterans recover from a mental illness. The VA's 
Committee on Care of Veterans with Serious Mental Illness has 
recognized that this continuum should be available throughout the VA. 
However, at most, it can be said that some VA facilities have the 
capability to provide some limited number of these services to a 
portion of those who need them. The APA recommends that Congress 
incrementally augment funding for mental illness and substance use 
disorders by $500 million each year from FY08 to FY12 above FY06 
levels.
    Above all, a profound respect for the dignity of patients with 
mental and substance use disorders and their families must be duly 
reflected in serving the needs of veterans in the VA system. I 
appreciate the opportunity to speak with you today on behalf of the 
American Psychiatric Association.

                                 
                   Prepared Statement of Gary Ewart,
       Director, Government Relations, American Thoracic Society
 on behalf of the Friends of VA Medical Care and Health Research (FOVA)
    On behalf of the Friends of VA Medical Care and Health Research 
(FOVA), thank you for your continued support of the Department of 
Veterans Affairs (VA) Medical and Prosthetic Research Program. FOVA is 
a coalition of over 80 national academic, medical and scientific 
societies; voluntary health and patient advocacy groups; and veteran 
service organizations, committed to ensuring high-quality healthcare 
for our nation's veterans. The FOVA organizations greatly appreciate 
this opportunity to submit testimony on the President's proposed $411 
million FY 2008 budget for VA research. For FY 2008, FOVA recommends an 
appropriation of $480 million for VA Medical and Prosthetic Research 
and an additional $45 million for medical facilities upgrades to be 
appropriated through the VA Minor Construction account.
    FOVA recognizes the significant budgetary pressures this Committee 
bears and thanks both the House and Senate Committees on Veterans 
Affairs for your FY 2007 views and estimates with regard to the VA 
Medical and Prosthetic Research program. These recommendations, ranging 
from at least a $28 million up to a $51.5 million increase over the 
President's FY 2007 budget request for the VA research program, affirm 
your ongoing support for our nation's veterans. These recommendations 
would still provide at least an $11 million to $34.5 million increase 
over the President's FY 2008 budget. We look forward to working with 
you to develop views and estimates for FY 2008 that reflect this same 
commitment to medical research for the benefit of veterans and, 
ultimately, all Americans.
    Medical and Prosthetic Research for Superior Veterans Healthcare
    Recent stagnate funding has jeopardized VA Research and 
Development's status as a national leader. Significant growth in the 
annual Research and Development appropriation is necessary to continue 
to achieve breakthroughs in healthcare for its current population and 
to develop new solutions for its most recent veterans. For FY 2008, the 
Bush Administration has yet again recommended a budget that cuts 
funding for the VA research program. When biomedical inflation is 
considered--the Biomedical Research and Development Price Index for FY 
2008 is projected at 3.7 percent--the research program will be cut even 
more significantly than the documented $1 million. Just to keep pace 
with the previous year's spending, an additional $15 million, for a 
total of $427 million, is required. FOVA's $480 million recommendation 
for VA research funding represents an inflation adjustment for the 
program since 2003; unfortunately, this number does not even consider 
the additional funding needed to address emerging needs for more 
research on post traumatic stress disorder, long-term treatment and 
rehabilitation of veterans with polytraumatic blast injures, and 
genomic medicine.
    The VA Medical and Prosthetic Research program is one of the 
nation's premier research endeavors. The program has a strong history 
of success as illustrated by the following examples of VA 
accomplishments:

      Developed effective therapies for tuberculosis following 
World War II.
      Invented the implantable cardiac pacemaker, helping many 
patients prevent potentially life-threatening complications from 
irregular heartbeats.
      Performed the first successful liver transplants.
      Developed the nicotine patch.
      Developed Functional Electrical Stimulation (FES) systems 
that allow patients to move paralyzed limbs.
      Found that an implantable insulin pump offers better 
blood sugar control, weight control and quality of life for adult-onset 
diabetes than multiple daily injections.
      Identified a gene associated with a major risk for 
schizophrenia.
      Launched the first treatment trials for Gulf War 
Veterans' Illnesses, focusing on antibiotics and exercise.
      Began the first clinical trial under the Tri-National 
Research Initiative to determine the optimal antiretroviral therapy for 
HIV.
      Launched the largest-ever clinical trial of psychotherapy 
to treat posttraumatic stress disorder.
      Studied and demonstrated the effectiveness of a new 
vaccine for shingles, a painful skin and nerve infection that affects 
older adults.
      Discovered via a 15-year study of 5,000 individuals that 
secondhand smoke exposure increases the risk of developing glucose 
intolerance, the precursor to diabetes.

    VA strives for improvements in treatments for conditions long 
prevalent among veterans such as diabetes, spinal cord injury, 
substance abuse, mental illnesses, heart diseases, infectious diseases, 
and prostate cancer. VA is equally obliged to develop better responses 
to the grievous conditions suffered by veterans of Operation Iraqi 
Freedom (OIF) and Operation Enduring Freedom (OEF), such as extensive 
burns, multiple amputations, compression injuries, and mental stress 
disorders. These returning OIF and OEF veterans have high expectations 
for returning to their active lifestyles and combat. The seamless 
mental and physical reintegration of these soldiers is a high priority, 
but still a difficult challenge that the VA Research program can 
address.
    However, without appropriate funding over FY 2007, VA will be ill-
equipped to address the needs of the returning veteran population while 
also researching treatments for diseases that affect veterans 
throughout their entire tenure within the VA healthcare system. 
Additional increases are also necessary for continued support of new 
initiatives in neurotraumas, including head and cervical spine 
injuries; wound and pressure sore care; pre- and post-deployment health 
issues with a particular focus on post-traumatic stress disorder; and 
the development of improved prosthetics and strategies for 
rehabilitation from polytraumatic injuries.
    The VA has a distinctive opportunity to recreate its healthcare 
system and provide progressive and cutting edge care for veterans 
through Genomic Medicine. VA is the obvious choice to lead advances in 
Genomic Medicine as the largest integrated healthcare system in the 
world with an advanced and industry-leading Electronic Health Record 
system and a dedicated population for sustained research, ethical 
review, and standard processing. Innovations in Genomic Medicine will 
allow the VA to reduce drug trial failure by identifying genetic 
disqualifiers and allowing treatment of eligible populations; track 
genetic susceptibility for disease and develop preventative measures; 
predict response to medication; and modify drugs and treatment to match 
an individual's unique genetic structure.
    The new VA Genomic Medicine project represents a monumental 
advancement in the future of the VA Medical and Prosthetic Research 
program and in the future of America's healthcare system. According to 
Frances Collins, M.D., Director of the National Institutes of Health 
(NIH) Human Genome project, the study of genomics will be most 
beneficial to the patient population by decoding the genetic mechanisms 
that cause common, complex diseases--many of which are particularly 
prevalent in the veteran population--such as hypertension and diabetes.
    While advances in genomic medicine show promise in aiding the 
discovery of new, personalized treatments for diseases prevalent among 
many veterans seeking treatment at VA hospitals, there is also evidence 
that genomic medicine will greatly help in the treatment and 
rehabilitation of returning OIF/OEF veterans. New research has recently 
targeted the human genome for insight into why certain wounds heal 
while others do not. Additional studies have considered the differences 
between genes that aid in healing and genes that cause inflammation and 
its side-effects. Advancements in this field can drastically influence 
the treatment of injured soldiers and may play a large role in the 
long-term treatment of amputees.
    The VA Genomic Medicine project will require sustained increases 
for VA Research funding in the coming years. A VA pilot program 
involving 20,000 individuals and 30,000 specimens (with the capacity to 
hold 100,000 specimens) provides estimates that approximately $1,000 
will be necessary for each specimen. The potential advances that can be 
achieved with regard to PTSD and veteran-related diseases point to an 
expansion of tissue banking activities.
    Despite high productivity and success, funding for VA medical and 
prosthetic research has not kept pace with other federal research 
programs or with funding 
for VA medical care. The VA research program has done an extraordinary 
job leveraging its modest $412 million appropriation into a $1.7 
billion research enterprise that hosts multiple Nobel laureates and 
produces an exceedingly competitive number of scientific papers 
annually. VA Research awards are currently capped at $125,000, 
significantly lower than comparable federal research programs. However, 
VA investigators would be unable to compete for additional funding from 
other federal sources without the initial awards from the Medical and 
Prosthetic Research account.
       Research Facilities Consistent with Scientific Opportunity
    State-of-the-art research requires state-of-the-art technology, 
equipment, and facilities. Such an environment promotes excellence in 
teaching and patient care as well as research. It also helps VA recruit 
and retain the best and brightest clinician scientists. In recent 
years, funding for the VA medical and prosthetics research program has 
failed to provide the resources needed to maintain, upgrade, and 
replace aging research facilities. Many VA facilities have run out of 
adequate research space, and ventilation, electrical supply, and 
plumbing appear frequently on lists of needed upgrades along with space 
reconfiguration. Under the current system, research must compete with 
other facility needs for basic infrastructure and physical plant 
improvements which are funded through the minor construction 
appropriation.
    FOVA appreciates the inclusion within the House-passed Military 
Quality of Life and Veterans' Affairs and Related Agencies FY 2007 
appropriations bill of an additional $12 million to address research 
facility infrastructure deficiencies. The House Committee on 
Appropriations also gave attention to this problem in the House Report 
accompanying the FY 2006 appropriations bill (P.L. 109-114), which 
expresses concern that equipment and facilities to support the research 
program may be lacking and that some mechanism is necessary to ensure 
the Department's research facilities remain competitive. It noted that 
more resources may be required to ensure that research facilities are 
properly maintained to support the Department's research mission. To 
assess VA's research facility needs, Congress directed VA to conduct a 
comprehensive review of its research facilities and report to Congress 
on the deficiencies found, along with suggestions for correction. 
However, VA cites that this review, already underway for the past year, 
will take an additional 3 years to complete.
    Meanwhile, in May 2004, Secretary of Veterans Affairs Anthony J. 
Principi approved the Capital Asset Realignment for Enhanced Services 
(CARES) Commission report that called for implementation of the VA 
Undersecretary of Health's Draft National CARES Plan for VA research. 
This plan recommended $87 million to renovate existing research space; 
however, a complete assessment of research infrastructure needs will 
likely require a more than $300 million investment.
    FOVA believes Congress should establish and appropriate a funding 
stream specifically for research facilities, using the VA assessment to 
ensure that amounts provided are sufficient to meet both immediate and 
long-term needs. Congress should also use the VA report as the basis 
for prioritizing allocation of such funding to ensure that the most 
urgent needs are addressed first. To ensure that funding is adequate to 
meet both immediate and long-term needs, FOVA recommends an annual 
appropriation of $45 million in the minor construction budget dedicated 
to renovating existing research facilities and additional major 
construction funding sufficient to replace at least one outdated 
facility per year until the backlog is addressed.
    Preserving the Integrity of VA's Intramural, Peer-Review System
    As a perquisite for membership, all FOVA organizations agree not to 
pursue earmarks or designated amounts for specific areas of research in 
the annual appropriation for the VA Research program. We urge you to 
take a similar stance in regard to FY 2008 funding for VA research for 
the following reasons:

      The VA research program is exclusively intramural. Only 
VA employees holding at least a five-eighths salaried appointment are 
eligible to receive VA research awards originating from the VA R&D 
appropriation. Compromising this principle by designating funds to 
institutions or investigators outside of the VA undermines an extremely 
effective tool for recruiting and retaining the highly qualified 
clinician-investigators who provide quality care to veterans, focus 
their research on conditions prevalent in the veteran population, and 
educate future clinicians to care for veterans.
      VA has well-established and highly refined policies and 
procedures for peer review and national management of the entire VA 
research portfolio. Peer review of proposals ensures that VA's limited 
resources support the most meritorious research. Additionally, 
centralized VA administration provides coordination of VA's national 
research priorities, aids in moving new discoveries into clinical 
practice, and instills confidence in overall oversight of VA research, 
including human subject protections, while preventing costly 
duplication of effort and infrastructure. Earmarks have the potential 
to circumvent or undercut the scientific integrity of this process, 
thereby funding less than meritorious research.
      A research encompasses a wide range of types of research. 
Designating amounts for specific areas of research minimizes VA's 
ability to fund ongoing programs in other areas and forces VA to delay 
or even cancel plans for new initiatives. Biomedical research inflation 
alone, estimated at 3.8% for FY 2005 and at 3.5% for FY 2006, has 
reduced the purchasing power of the R&D appropriation by $29.7 million 
over just 2 years. In the absence of commensurate increases, VA is 
unable to sustain important research on diabetes, hepatitis C, heart 
diseases, stroke and substance abuse, or address emerging needs for 
more research on post traumatic stress disorder and long-term treatment 
and rehabilitation of polytraumatic blast injures. While Congress 
certainly should provide direction to assist VA in setting its research 
priorities, earmarked funding exacerbates ongoing resource allocation 
shortages.

    Again, FOVA appreciates the opportunity to present our views to the 
Committee. While research challenges facing our nation's veterans are 
significant, if given the resources, we are confident the expertise and 
commitment of the physician-scientists working in the VA system will 
meet the challenge.
         Organization Supporting FOVA's FY 2007 Recommendations

 
 
 
Administrators of Internal Medicine                                       Association of Academic Psychiatrists
Alliance for Academic Internal Medicine                                Association of American Medical Colleges
Alliance for Aging Research                                               Association of Professors of Medicine
Alzheimer's Association                                            Association of Program Directors in Internal
American Academy of Child and Adolescent                                                               Medicine
  Psychiatry                                                             Association of Schools and Colleges of
American Academy of Neurology                                                                         Optometry
American Academy of Opthalmology                                         Association of Subspecialty Professors
American Association for the Study of Liver                                Association of VA Chiefs of Medicine
  Diseases                                                                         Blinded Veterans Association
American Association of Anatomists                                                 Blue Star Mothers of America
American Association of Colleges of Pharmacy                           Clerkship Directors in Internal Medicine
American Association of Spinal Cord Injury                                   Coalition for American Trauma Care
  Nurses                                                                  Coalition for Heath Services Research
American Association of Spinal Cord Injury                                 Digestive Disease National Coalition
Psychologists and Social Workers                                              Gerontological Society of America
American College of Chest Physicians                                         Hepatitis Foundation International
American College of Clinical Pharmacology                                 Juvenile Diabetes Research Foundation
American College of Physicians                                                                    International
American College of Rheumatology                                                                               Legion of Valor of the USA, Inc.
American Congress of Rehabilitation Medicine                           Medical Device Manufacturers Association
American Dental Education Association                                     Medicine-Pediatrics Program Directors
American Diabetes Association                                                                       Association
American Federation for Medical Research                               Military Officers Association of America
American Gastroenterological Association                                 National Alliance for the Mentally Ill
 

 
 
 
American Geriatrics Society                                         National Association for the Advancement of
American Heart Association                                                            Orthotics and Prosthetics
American Hospital Association                                       National Association for Uniformed Services
American Lung Association                                             National Association of VA Dermatologists
American Military Retirees Association                               National Association of Veterans' Research
American Optometric Association                                                       and Education Foundations
American Osteopathic Association                                        National Organization of Rare Disorders
American Paraplegia Society                                             Nurses Organization of Veterans Affairs
American Physiological Society                                                    Paralyzed Veterans of America
American Podiatric Medical Association                                Paralyzed Veterans of America Spinal Cord
American Psychiatric Association                                                            Research Foundation
American Psychological Association                                                    Parkinsons Action Network
American Society for Pharmacology and Experi-                                                  Research!America
  mental Therapeutics                                                                  Society for Neuroscience
American Society of Hematology                                              Society for Women's Health Research
American Society of Nephrology                                             Society of General Internal Medicine
American Therapeutic Recreation Association                                               The Endocrine Society
American Thoracic Society                                                             United Spinal Association
Association for Assessment and Accreditation of                               Vietnam Veterans of America, Inc.
  Laboratory Animal Care International                                Washington Home Center for Pallative Care
Association of Academic Health Centers                                                                  Studies
 

                                 

                Prepared Statement of Patrick Campbell,
     Legislative Director, Iraq and Afghanistan Veterans of America

    Mr. Chairman and Members of the House Subcommittee on Health, on 
behalf of the Iraq and Afghanistan Veterans of America (IAVA), thank 
you for this opportunity to address the issue of VA's Mental Health 
budget for FY 08.
    My name is SGT Patrick Campbell and I am a combat medic for the DC 
National Guard, an OIF vet and the Legislative Director for the Iraq 
and Afghanistan Veterans of America. IAVA is the nation's first and 
largest organization for Veterans of the wars in Iraq and Afghanistan. 
IAVA believes that the troops and veterans who were on the frontlines 
are uniquely qualified to speak about and educate the public about the 
realities of war, its implications on the health of our military, and 
its impact on the strength of our country.
    As my counselor at the local Vet Center would say, ``No one goes to 
war and comes home the same person.'' And unfortunately for many 
soldiers the real battle begins the day they get home.
    The Department of Veterans' Affairs proposes spending $3 billion on 
Mental Health Programs in FY 08. Of that $3 billion, 80% ``will be 
devoted to the treatment of seriously mentally ill veterans, including 
those suffering from post-traumatic stress disorder.'' Another $360 
million will fund the VA's mental health initiative and $115 million is 
assigned to readjustment counseling. The VA proposes commendable 
increases to these vital mental health services, however the 
President's budget fails at a fundamental level. It assumes that the 
veterans who need help will ask for it.
    Mr. Chair, as I have testified many times before, we in the 
military are a proud bunch. We are trained to overcome any obstacle and 
defeat any enemy. For most of my buddies the thought of attending 
counseling is admitting defeat in the mental war that rages well beyond 
the days we turn in our weapons and take off our uniforms.
    I am a combat medic, a graduate student, an advocate of mental 
health services for a veterans service group and someone who has 
counseled many of my battle buddies to seek counseling. When it came 
time for me to admit that I needed help, I just avoided it altogether. 
Thankfully I am blessed to have amazing friends who did not let me run 
away from my issues. After spending a year in denial, last month I was 
diagnosed with Post Traumatic Stress Disorder (PTSD).
    Every time I admit I have PTSD it gets a little easier to say. That 
being said, I will never be able to shake that feeling that some 
soldier watching this testimony from home is shaking his head at me and 
under his breath calling me a whiner. So here I am before you in spite 
of myself and my own insecurities.
    I can say from personal experience that to think that even a 
majority of veterans who need help will ask for it is just plain naive. 
The VA's passive approach of waiting for veterans to come to them just 
isn't working. Returning soldiers need and deserve mandatory mental 
health counseling. We understand this is a radical shift from the 
incremental and passive approach the VA has undertaken since the 
beginning of the Global War on Terror. This approach is the only 
effective way to remove the stigma of seeking mental health counseling.
    This Subcommittee should lead the fight to ensure that every 
veteran receives at least one mental health screening with a trained 
professional. Every veteran should be required or incentivized to visit 
their local Vet Center within 6 months of their release of active duty. 
The VA could model their incentive program after the military's new 
recruitment plan (e.g., a massive PR campaign combined with paying 
soldiers to enroll in the program with prepaid credit cards). Lastly, 
the VA must ensure that those new veterans will be seen in a timely 
manner.
    They say an ounce of prevention is worth a pound of intervention. 
By requiring all soldiers to submit to a mental health screening today 
we will be preventing millions and billions of dollars of intervention 
services.
    There is a wooden sign that hangs over the door to the DC Vet 
Center, that says, ``Welcome Home.'' I will never be the same man that 
I was before I left for Iraq. But I know that whoever I have become I 
will always have a home to go to when at the DC Vet Center. I just pray 
that every one of my battle buddies has the courage to find their way 
home.

                                 
   Statement of American Federation of Government Employees, AFL-CIO

INTRODUCTION
    The American Federation of Government Employees, AFL-CIO, which 
represents more than 600,000 federal employees who serve the American 
people across the nation and around the world, including roughly 
150,000 employees in the Department of Veterans Affairs (VA), is 
honored to submit a statement regarding the VA's Fiscal Year (FY) 2008 
budget for the Veterans Health Administration (VHA).
    AFGE commends Chairman Michaud for his unwavering commitment to 
secure adequate funds to treat the physical and mental health needs of 
our veterans, and his support for assured funding legislation. AFGE 
agrees that it is time to give veterans more predictability through an 
assured funding process for VA healthcare. The evidence of a broken 
discretionary funding process is overwhelming: a $3 billion shortfall 2 
years ago, widespread hiring freezes and hospitals operating in the red 
last year, while this year, the VA is operating on its twelfth 
continuing resolution in 13 years.
    AFGE members working in VA hospitals and clinics see first hand 
both the costs of war and the costs of a discretionary VA funding 
formula. They take tremendous pride in being part of the best 
healthcare system in this country. At the same time, they express 
growing anxiety, sometimes bordering on desperation over the lack of 
resources and staffing they need to do their jobs.
NEED FOR MORE OVERSIGHT
    Adequate funding goes hand in hand with adequate oversight. 
Congress and the public must be able to determine whether these 
precious dollars are being spent cost effectively and in the best 
interests of veterans. Unfortunately, there is far too little 
transparency in VA spending at the present time, as recent Government 
Accountability Office (GAO) studies have shown. First, GAO found that 
the VA fails to track healthcare dollars used for illegal cost 
comparison studies. More recently, it concluded that the VA does a poor 
job of budget forecasting. Thus, it is no surprise that in the first 
quarter of FY 2006, VHA treated nearly 34,000 more returning OIF and 
OEF veterans than it had predicted it would treat for the entire year. 
Its mental health track record is no better: Last year, GAO found that 
millions of dollars budgeted for mental health strategic initiatives 
had not been spent.
    Stronger oversight and reporting requirements for VA spending are 
greatly needed. For example:

      The quarterly reports provided by the VA pursuant to new 
requirements in the 2006 VA appropriations law do not appear to provide 
much of a vehicle for oversight. AFGE members continue to report 
``borrowing'' between medical accounts. Along these lines, the proposed 
budget does not adequately explain why 5,689 food service jobs suddenly 
fit better in Medical Services than Medical Facilities.
      Despite clear reporting requirements in federal law (38 
USC Sec. 305), it appears that the VA has suffered no consequences for 
repeatedly filing incomplete reports on contracting out by medical 
facilities.

    More transparency is needed in other critical VHA areas to improve 
forecasting of future need and ensure the best use of precious 
healthcare dollars. For example:

      VISN budgets: It is very difficult to determine how much 
VHA spends on FTEs that do not provide direct patient care. We are 
especially concerned about the enormous growth in VISN budgets. One of 
the original goals of the VISN reorganization was to reduce the need 
for management positions, and each VISN was expected to have 8 to 10 
FTEs. Yet currently, total VISN employment is nearly three times that 
amount (638 FTEs). Seven of the 23 VISNS have 30 or more employees.
      Bonuses: AFGE is very concerned about the diversion of 
precious patient care dollars to excessive management bonuses.
      Patient capacity: AFGE encourages the Subcommittee to 
conduct oversight of VHA practices for determining patient waiting 
lists and bed capacity. AFGE is concerned that waiting list statistics 
are often presented in ways that understate the actual delays that 
veterans are experiencing. Second, it is a common practice to keep a 
hospital unit officially open even though there are no available beds.

THE PRESIDENT'S FY 2008 BUDGET PROPOSAL
    As a proud and longtime supporter of the Independent Budget (IB), 
AFGE's overall concern with the President's budget proposal is that the 
proposed funding levels for VHA fall short of the IB's recommendations, 
which forecasts veterans' needs using sound, systematic methodology. We 
also concur with the IB's recommendation to restore eligibility to 
Category 8 veterans. AFGE rejects doubling of co-pays, new user fees or 
any other policies that shift costs to moderate income veterans and 
shrink deficits by pushing veterans away.
    Despite the Administration's contentions, this proposed budget is 
not gimmick-free. Even though drug co-pays and user fees are not part 
of this year's medical care budget, the Administration acknowledges 
that these dollars could affect its 2009 
appropriations request. Another familiar gimmick is to follow a strong 
first year 
budget with a decrease in funding over the next 4 years. According to 
the Center on Budget and Policy Priorities, veterans' healthcare would 
undergo large cuts between 2008 and 2012.
    Fee basis care: One of the most harmful byproducts of underfunding 
is excessive reliance on contract care. Federal law and good policy 
dictate that fee basis care should be provided to veterans in limited 
circumstances, for example, to increase rural access when other means 
are not available. AFGE is concerned that the proposed FY 2008 budget 
continues a dangerous trend toward increased reliance on fee basis 
care, in lieu of hiring more VA medical professionals and timely 
construction of new hospitals and clinics. The number of outpatient 
medical fee basis visits estimated for FY 2008 represents a 27% 
increase in 3 years. Veterans deserve a better explanation of VA's 
growing reliance on fee basis care, in the face of constant accolades 
in the medical community about the quality of VA healthcare. AFGE also 
has concerns about the potential of VA's newest fee basis initiative, 
Project HERO, to waste scarce medical dollars by increased use of 
contract care.
    Long term care: The Administration has once again failed to propose 
adequate funding for institutional long term care. There are 
insufficient resources in the community to shift large numbers of aging 
and disabled veterans to noninstitutional care. Some veterans must 
remain in institutional care and need beds that are currently in short 
supply. In addition, AFGE questions estimates in the proposed budget 
that predict declines in operating levels for rehabilitative, 
psychiatric, nursing home and domiciliary care.
REPORTS FROM THE FRONT LINES
    The following examples illustrate how underfunding and financial 
uncertainty adversely impact the delivery of healthcare to veterans:

Nurses:

      PAY: Budget-driven pay policies hurt nurses and veterans 
alike. Despite widely recognized problems with recruitment and 
retention, RNs in every VISN report problems with the locality pay 
process established by 2000 nurse legislation. Managers regularly 
contend that they lack the funds to provide nurse locality pay 
increases even after conducting pay surveys.
      STAFFING: Poor pay policies directly impact staffing 
levels, which in turn hurt patient care and patient safety in many 
ways, for example, not having time to check orders or do blood drawers 
or IV placements promptly. Staffing shortages in the hospital supply 
department further impede the RN's ability to access oxygen tubes and 
other life-saving equipment in emergency situations. RNs in a VISN 23 
facility report that their polytrauma unit is short-staffed, requiring 
nurses to give less time to each veteran and forcing them to limit the 
number of veterans admitted to this state-of-the-art new treatment 
facility. A facility in VISN 16 was recently forced to place 
geropsychiatric patients in a more costly medical unit with one on one 
nursing care because of a loss of psychiatric ward beds.
      CONTRACT NURSES: Turning to contract nurses as a stopgap 
solution wastes scarce dollars and impacts quality. A facility in VISN 
9 is about to spend more than a half million VA healthcare dollars on 
contract nurses because of difficulties in recruiting and retaining in-
house staff (at a lower cost) and too few staff in the personnel 
department to bring in new hires.
      FLOATING: Another frequently used stopgap solution that 
hurts patient care and lowers nurse morale is rotation of nurses 
between units because of short staffing. Nurses are then forced to work 
in areas where they feel less competent.
      MANDATORY OVERTIME: Despite provisions in 2004 
legislation to reduce mandatory nurse overtime, hospitals continue to 
rely on mandatory overtime to address staffing shortages.
      PATIENT SAFETY EQUIPMENT: AFGE urges this Subcommittee to 
ensure that all VA hospitals have the funds to purchase patient lifting 
equipment that reduces the incidence of nurse back injuries and patient 
skin tears.

Physicians and dentists:

    In every VISN, physicians and dentists report difficulty getting 
adequate market pay increases and performance pay awards, despite clear 
language in 2004 physicians pay legislation. Facility directors have 
contended that they lack the funds to increase pay and give awards, 
even before they convened any panels to set market pay or conducted 
evaluations of individual physician performance. Management also cries 
``budget'' in refusing to reimburse physicians for continuing medical 
education, again despite clear language in Title 38 entitling full-time 
physicians to up to $1000 per year.
    On call physicians are routinely scheduled for weekend rounds and 
are not provided any compensation time for weekend work. Primary care 
panel sizes are at maximum levels regardless of the complexity of 
various cases. Physicians with heavy workloads must also cover large 
patient loads of other doctors on leave as there are no additional 
physicians available.
    The results of these ill-advised policies are widespread shortages 
of specialty physicians throughout the VA, and shorthanded primary care 
clinics with enormous patient caseloads. In turn, these shortages 
require increased reliance of costly fee basis care by non-VA 
providers.
    Delays in diagnostic testing: Short staffing causes significant 
delays in medical testing. According to a recent report from a VISN 20 
facility, veterans face significant delays in obtaining sleep studies 
because the sleep clinic lacks adequate staff to review the results. As 
a result, it takes 5 to 6 months to get reports read (over double the 
wait time a year ago). The facility is also experiencing extensive 
delays in getting the results of bone density studies because the 
Imaging Department has only one part-time employee to read the scans.
    Mental Health: Due to a chronic shortage of psychiatrists in many 
facilities, new veterans entering the VA healthcare system must wait 
several months to see a psychiatrist. While there has been an increase 
in hiring of new social workers, the level is still below that of 10 
years ago. Heavier caseloads prevent social workers from spending more 
time with patients and providing other support such as visiting 
patients at homeless shelters.
CONCLUSION
    AFGE greatly appreciates the opportunity to submit our views and 
recommendations to the Subcommittee on Health. We look forward to 
working with Chairman Michaud and other Members of the Subcommittee to 
ensure that the VA budget adequately meets the healthcare needs of our 
veterans in FY 2008 and beyond. We believe assured funding, increased 
oversight and carefully measured use of contract care are essential to 
meeting that goal.

                                 
            Statement of Shannon Middleton, Deputy Director,
     Veterans Affairs and Rehabilitation Division, American Legion
    Mr. Chairman and Members of the Committee:
    Thank you for this opportunity to submit The American Legion's 
views on the Veterans Health Administration's budget request for Fiscal 
Year 2008. There is no question that all service-connected disabled 
veterans and economically disadvantaged veterans must receive timely 
access to quality healthcare; however, their 
comrades-in-arms should also receive their earned benefit--enrollment 
in the VA healthcare delivery system. Rather than supporting 
legislative proposals designed to drive veterans from the world's best 
healthcare delivery system, The American Legion will continue to 
advocate new revenue streams to allow any veteran to receive VA 
healthcare.
    The American Legion offers the following budgetary recommendations 
for selected discretionary programs within the Department of Veterans 
Affairs for FY 2008:

----------------------------------------------------------------------------------------------------------------
                    Program                         FY06 Funding      President's Request      Legion's Request
----------------------------------------------------------------------------------------------------------------
Medical Care                                     $30.8 billion         $36.6 billion         $38.4 billion
----------------------------------------------------------------------------------------------------------------
Medical Services                                 $22.1 billion         $27.2 billion           $29 billion
----------------------------------------------------------------------------------------------------------------
Medical Administration                            $3.4 billion          $3.4 billion          $3.4 billion
----------------------------------------------------------------------------------------------------------------
Medical Facilities                                $3.3 billion          $3.6 billion          $3.6 billion
----------------------------------------------------------------------------------------------------------------
Medical Care Collections                            ($2 billion)        ($2.4 billion)          $2.4 billion*
----------------------------------------------------------------------------------------------------------------
Medical and Prosthetics
Research                                          $412 million          $411 million          $472 million
----------------------------------------------------------------------------------------------------------------
Construction
----------------------------------------------------------------------------------------------------------------
Major                                             $1.6 billion          $727 million          $1.3 billion
----------------------------------------------------------------------------------------------------------------
Minor                                             $233 million          $233 million          $279 million
----------------------------------------------------------------------------------------------------------------
State Extended Care
Facilities Grant Program                           $85 million           $85 million          $250 million
----------------------------------------------------------------------------------------------------------------
* Third-party reimbursements should supplement rather than offset discretionary funding.

MEDICAL CARE
    The Department of Veterans Affairs standing as the nation's leader 
in providing safe, high-quality healthcare in the healthcare industry 
(both public and private) is well documented. Now VA is also recognized 
internationally as the benchmark for healthcare services:

      December 2004, RAND investigators found that VA 
outperforms all other sectors of the U.S. healthcare industry across a 
spectrum of 294 measures of quality in disease prevention and 
treatment;
      In an article published in the Washington Monthly (Jan/
Feb 2005) ``The Best Care Anywhere'' featured the VA healthcare system;
      In the prestigious Journal of the American Medical 
Association (May 18, 2005) noted that VA's healthcare system has ``. . 
. quickly emerged as a bright star in the constellation of safety 
practice, with system-wide implementation of safe practices, training 
programs and the establishment of four patient-safety research 
centers.'';
      The U.S. News and World Report (July 18, 2005) included a 
special report on the best hospitals in the country titled ``Military 
Might--Today's VA Hospitals Are Models of Top-Notch Care'' highlighting 
the transformation of VA healthcare;
      The Washington Post (August 22, 2005) ran a front-page 
article titled ``Revamped Veterans' Health Care Now a Model'' that 
spotlights VA healthcare accomplishments;
      In 2006, VA received the highly coveted and prestigious 
``Innovations in American Government'' Award from Harvard's Kennedy 
School of Government for its advanced electronic health records and 
performance measurement system; and
      Recently, in January 2007, the medical journal Neurology 
wrote: ``The VA has achieved remarkable improvements in patient care 
and health outcomes, and is a cost-effective and efficient 
organization.''

    Although VA is considered a national resource, the Secretary of 
Veterans Affairs continues to prohibit the enrollment of any new 
Priority Group 8 veterans, even if they are Medicare-eligible or have 
private insurance coverage. This prohibition is not based on their 
honorable military service, but rather on limited resources provided to 
the VA medical care system. For 2 years following receiving an 
honorable discharge, veterans from Operations Enduring Freedom and 
Iraqi Freedom are able to receive healthcare through VA, but many of 
their fellow veterans and those of other armed conflicts may very well 
be denied enrollment due to limited existing appropriations. This is 
truly a national tragedy.
    As the Global War on Terrorism continues, fiscal resources for VA 
will continue to be stretched to their limits and veterans will 
continue to go to their elected officials requesting additional money 
to sustain a viable VA capable of caring for all veterans, not just the 
most severely wounded or economically disadvantaged. VA is often the 
first experience veterans have with the Federal Government after 
leaving the military. This nation's veterans have never let this 
country down; Congress and VA should do its best to not let veterans 
down.
    The President's budget request for FY 2008 calls for Medical Care 
funding to be $36.6 billion, which is about $1.8 billion less than The 
American Legion's recommendation of $38.4 billion. The major difference 
is the President's budget request continues to offset the discretionary 
appropriations by its Medical Care Collection Fund's goal ($2.4 
billion), whereas The American Legion considers this collection as a 
supplement since it is for the treatment of nonservice-connected 
medical conditions.
Medical Services
    The President's budget request assumes the enrollment of new 
Priority Group 8 veterans will remain suspended. The American Legion 
strongly recommends reconsidering this ``lockout'' of eligible 
veterans, especially for those veterans who are Medicare-eligible, 
military retirees enrolled in TRICARE or TRICARE for Life, or have 
private healthcare coverage. Successful seamless transition from 
military service should not be penalized, but rather encouraged. This 
prohibition sends the wrong message to recently separated veterans. No 
eligible veteran should be ``locked out'' of the VA healthcare delivery 
system.
    The VA healthcare system enjoys a glowing reputation as the best 
healthcare delivery system in the country, so why ``lock out'' any 
eligible veteran, especially those that have the means to reimburse VA 
for services received? New revenue streams from third-party 
reimbursements and copayments can supplement the ``existing 
appropriations,'' but sound fiscal management initiatives are required 
to enhance third-party collections of reasonable charges.
    In FY 2008, VA expects to treat 5.8 million patients (an increase 
of 2.4 percent).  According to the President's budget request, VA will 
treat over 125,000 more Priority 1-6 veterans in 2008 representing a 
3.3-percent increase over the number of these priority veterans treated 
in 2007. Priority 7 and 8 veterans are projected to decrease by over 
15,000 or 1.1 percent from 2007 to 2008. However, VA will provide 
medical care to non-veterans; this population is expected to increase 
by over 24,000 patients or 4.8 percent over this same time period. In 
2008, VA anticipates treating 263,000 Operation Iraqi Freedom (OIF) and 
Operation Enduring Freedom (OEF) veterans, an increase of 54,000 
patients, or 25.8 percent, over the 2007 level.
    The American Legion supports the President's mental health 
initiative to provide $360 million to deliver mental health and 
substance abuse care to eligible veterans in need of treatment of 
serious mental illness, to include post-traumatic stress disorder.
    The American Legion remains opposed to the concept of charging an 
enrollment fee for an earned benefit. Although the President's new 
proposal is a tiered approach targeted at Priority Groups 7 and 8 
veterans currently enrolled, the proposal does not provide improved 
healthcare coverage, but rather creates a fiscal burden for the 1.4 
million Priority Groups 7 and 8 patients. This initiative clearly 
projects further reductions in the number of Priority Groups 7 and 8 
veterans leaving the system for other healthcare alternatives. This 
proposed vehicle for gleaning of veterans would apply to both service-
connected disabled veterans as well as nonservice-connected disabled 
veterans in Priority Groups 7 and 8.
    The American Legion also remains opposed to the President's 
proposed increase in VA pharmacy co-pays from the current $8 to $15 for 
enrolled Priority Groups 7 and 8 veterans. This proposal would nearly 
double current pharmacy costs to this select group of veterans.
    The American Legion recommends $29 billion for Medical Services, 
$1.8 billion more than the President's budget request of $27.2 billion.
Medical Administration
    The President's budget request of $3.4 billion is a slight increase 
in FY 2006 funding level. VA plans to transfer 3,721 full-time 
equivalents from Medical Administration to Information Technology in FY 
2008. The American Legion applauds the President recommending this 
level of funding.
Medical Facilities
    The President's budget request of $3.6 billion is about $234 
million more than the FY 2006 funding level. The American Legion agrees 
with this recommendation to maintain VA existing infrastructure of 
4,900 buildings and over 15,700 acres. In FY 2008, VA will transfer 
5,689 full-time equivalents from Medical Facilities to Medical 
Services. It has been determined that the costs incurred for hospital 
food service workers, provisions and related supplies are for the 
direct care of patients which Medical Services is responsible for 
providing.
Medical Care Collection Fund (MCCF)
    The Balanced Budget Act of 1997, Public Law 105-33, established the 
VA Medical Care Collections Fund (MCCF), requiring that amounts 
collected or recovered from third-party payers after June 30, 1997 be 
deposited into this fund. The MCCF is a depository for collections from 
third-party insurance, outpatient prescription copayments and other 
medical charges and user fees. The funds collected may only be used for 
providing VA medical care and services and for VA expenses for 
identification, billing, auditing and collection of amounts owed the 
Federal Government. The American Legion supported legislation to allow 
VA to bill, collect, and reinvest third-party reimbursements and 
copayments; however, The American Legion adamantly opposes the scoring 
of MCCF as an offset to the annual discretionary appropriations since 
the majority of the collected funds come from the treatment of 
nonservice-connected medical conditions. Historically, these collection 
goals far exceed VA's ability to collect accounts receivable.
    In FY 2006, VA collected nearly $2 billion, a significant increase 
over the $540 million collected in FY 2001. VA's ability to capture 
these funds is critical to its ability to provide quality and timely 
care to veterans. Miscalculations of VA required funding levels results 
in real budgetary shortfall. Seeking an annual emergency 
supplemental is not the most cost-effective means of funding the 
nation's model healthcare delivery system.
    Government Accountability Office (GAO) reports have described 
continuing problems in VHA's ability to capture insurance data in a 
timely and correct manner and raised concerns about VHA's ability to 
maximize its third-party collections. At three medical centers visited, 
GAO found an inability to verify insurance, accepting partial payment 
as full, inconsistent compliance with collections follow-up, 
insufficient documentation by VA physicians, insufficient automation 
and a shortage of qualified billing coders were key deficiencies 
contributing to the shortfalls. VA should implement all available 
remedies to maximize its collections of accounts receivable.
    The American Legion opposes offsetting annual VA discretionary 
funding by the arbitrarily set MCCF goal, especially since VA is 
prohibited from collecting any third-party reimbursements from the 
nation's largest federally mandated, health insurer--Medicare.
Medicare Reimbursement
    As do most American workers, veterans pay into the Medicare system 
without choice throughout their working lives, including active-duty. A 
portion of each earned dollar is allocated to the Medicare Trust Fund 
and although veterans must pay into the Medicare system, VA is 
prohibited from collecting any Medicare reimbursements for the 
treatment of allowable, nonservice-connected medical conditions. This 
prohibition constitutes a multi-billion dollar annual subsidy to the 
Medicare Trust Fund. The American Legion does not agree with this 
policy and supports Medicare reimbursement for VHA for the treatment of 
allowable, nonservice-connected medical conditions of allowable 
enrolled Medicare-eligible veterans.
    As a minimum, VA should receive credit for saving the Centers for 
Medicare and Medicaid Services billions of dollars in annual mandatory 
appropriations.
                    MEDICAL AND PROSTHETICS RESEARCH
    The American Legion believes that VA's focus in research should 
remain on understanding and improving treatment for conditions that are 
unique to veterans. The Global War on Terrorism is predicted to last at 
least two more decades. Servicemembers are surviving catastrophically 
disabling blast injuries in Iraq, Afghanistan and elsewhere due to the 
superior armor they are wearing in the combat theater and the timely 
access to quality triage. The unique injuries sustained by the new 
generation of veterans clearly demands particular attention. There have 
been reported problems of VA not having the state-of-the-art 
prostheses, like DoD, and that the fitting of the prostheses for women 
has presented problems due to their smaller stature.
    In addition, The American Legion supports adequate funding for 
other VA research activities, including basic biomedical research as 
well as bench-to-bedside projects. Congress and the Administration 
should encourage acceleration in the development and initiation of 
needed research on conditions that significantly affect veterans--such 
as prostate cancer, addictive disorders, trauma and wound healing, 
post-traumatic stress disorder, rehabilitation, and others jointly with 
DoD, the National Institutes of Health (NIH), other federal agencies, 
and academic institutions.
    The American Legion recommends $472 million for Medical and 
Prosthetics Research in FY 2008, $61 million more than the President's 
budget request of $411 million.
                              CONSTRUCTION

Major Construction
    Over the past several years, Congress has kept a tight hold on the 
purse strings that control the funding needs for the construction 
program within VA. The hold out, presumably, is the development of a 
coherent national plan that will define the infrastructure VA will need 
in the decades to come. VA has developed that plan and it is CARES. The 
CARES process identified more than 100 major construction projects in 
37 states, the District of Columbia, and Puerto Rico. Construction 
projects are categorized as major if the estimated cost is over $7 
million. Now that VA has a plan to deliver healthcare through the year 
2022, it is up to Congress to provide adequate funds. The CARES plan 
calls for, among other things, the construction of new hospitals in 
Orlando and Las Vegas and replacement facilities in Louisville and 
Denver for a total cost estimate of well over $1 billion alone for 
these four facilities. VA has not had this type of progressive 
construction agenda in decades. Major construction money can be 
significant and proper utilization of funds must be well planned out. 
The American Legion is pleased to see six medical facility projects 
(Pittsburgh, Denver, Orlando, Las Vegas, Syracuse, and Lee County, FL) 
included in this budget request.
    In addition to the cost of the proposed new facilities are the many 
construction issues that are virtually ``put on hold'' for the past 
several years due to inadequate funding and the moratorium placed on 
construction spending by the CARES process. One of the most glaring 
shortfalls is the neglect of the buildings sorely in need of seismic 
correction. This is an issue of safety. Hurricane Katrina taught a very 
real lesson on the unacceptable consequences of procrastination. The 
delivery of healthcare in unsafe buildings cannot be tolerated and 
funds must be allocated to not only construct the new facilities, but 
also to pay for much-needed upgrades at existing facilities. Gambling 
with the lives of veterans, their families and VA employees is 
absolutely unacceptable.
    The American Legion believes that VA has effectively shepherded the 
CARES process to its current state by developing the blueprint for the 
future delivery of VA healthcare--it is now time for Congress to do the 
same and adequately fund the implementation of this comprehensive and 
crucial undertaking.
    The American Legion recommends $1.3 billion for Major Construction 
in FY 2008, $573 million more than the President's budget request of 
$727 million to fund more pending ``life-safety'' projects.
Minor Construction
    VA's minor construction program has suffered significant neglect 
over the past several years as well. The requirement to maintain the 
infrastructure of VA's buildings is no small task. Because the 
buildings are old, renovations, relocations and expansions are quite 
common. When combined with the added cost of the CARES program 
recommendations, it is easy to see that a major increase over the 
previous funding level is crucial and well overdue.
    The American Legion recommends $279 million for Minor Construction 
in FY 2008, $46 million more than the President's budget request of 
$233 million to address more CARES proposal minor construction 
projects.
Capital Asset Realignment for Enhanced Services (CARES)
    In March 1999, GAO published a report on VA's need to improve 
capital asset planning and budgeting. GAO estimated that over the next 
few years, VA could spend one of every four of its healthcare dollars 
operating, maintaining, and improving capital assets at its national 
major delivery locations, including 4,700 buildings and 18,000 acres of 
land nationwide.
    Recommendations stemming from the report included the development 
of asset-restructuring plans for all markets to guide future investment 
decisionmaking, among other initiatives. VA's answer to GAO and 
Congress was the initiation and development of the Capital Asset 
Realignment for Enhanced Services (CARES) program.
    The CARES initiative is a blueprint for the future of VHA--a fluid 
work in progress, in constant need of reassessment. In May 2004, the 
long awaited final CARES decision was released. The decision directed 
VHA to conduct 18 feasibility studies at those healthcare delivery 
sites where final decisions could not be made due to inaccurate and 
incomplete information. VHA contracted Pricewaterhouse Cooper (PwC) to 
develop a broad range of viable options and, in turn, develop business 
plans based on a limited number of selected options. To help develop 
those options and to ensure stakeholder input, then-VA Secretary 
Principi constituted the Local Advisory Panels (LAPs), which are made 
up of local stakeholders. The final decision on which business plan 
option will be implemented for each site lies with the Secretary of 
Veterans Affairs.
    The American Legion is dismayed over the slow progress in the LAP 
process and the CARES initiative overall. Both Stage I and Stage II of 
the process include two scheduled LAP meetings at each of the sites 
being studied with the whole process concluding on or about February 
2006.
    It wasn't until April 2006, after nearly a 7-month hiatus, that 
Secretary Nicholson announced the continuation of the services at Big 
Spring, Texas, and like all the other sites, has only been through 
Stage I. Seven months of silence is no way to reassure the veterans' 
community that the process is alive and well.
    The American Legion continues to express concern over the apparent 
short-circuiting of the LAPs and the silencing of the stakeholders. In 
an effort to provide a tangible voice for the frustrations expressed by 
veterans affected by the delay in CARES funding, The American Legion 
has recently produced a publication entitled CARES Dead or Alive?  This 
seven-part series of articles provides a candid view of how the absence 
of CARES-promised facilities has impacted veterans and the challenges 
they face when seeking care. The American Legion intends to hold 
accountable those who are entrusted to provide the best healthcare 
services to the most deserving population--the nation's veterans.
    Upon conclusion of the initial CARES process, then-Secretary 
Principi called for a ``billion dollars a year for the next seven 
years'' to implement CARES. The American Legion continues to support 
that recommendation and encourages VA and Congress to ``move out'' with 
focused intent.
              STATE EXTENDED CARE FACILITY GRANTS PROGRAM
    Since 1984, nearly all planning for VA inpatient nursing home care 
has revolved around State Veterans' Homes and contracts with public and 
private nursing homes. The reason for this is obvious; VA paid a per 
diem of $59.48 for each veteran it placed in State Veterans' Homes, 
compared to the $354 VA pays to maintain a veteran for 1 day in its own 
nursing home care units.
    Under the provisions of title 38, United States Code, VA is 
authorized to make payments to states to assist in the construction and 
maintenance of State Veterans' Homes. Today, there are 109 State 
Veterans' Homes in 47 states with over 23,000 beds providing nursing 
home, hospital, and domiciliary care. Grants for Construction of State 
Extended Care Facilities provide funding for 65 percent of the total 
cost of building new veterans homes. Recognizing the growing long-term 
healthcare needs of older veterans, it is essential that the State 
Veterans' Home Program be maintained as a viable and important 
alternative healthcare provider to the VA system. The American Legion 
opposes any attempts to place moratoria on new State Veterans' Home 
construction grants. State authorizing legislation has been enacted and 
state funds have been committed. The West Los Angeles State Veterans' 
Home, alone, is a $125 million project. Delaying this and other 
projects could result in cost overruns from increasing building 
materials costs and may result in states deciding to cancel these much-
needed facilities.
    The American Legion supports:

      Increasing the amount of authorized per diem payments to 
50 percent for nursing home and domiciliary care provided to veterans 
in State Veterans' Homes;
      The provision of prescription drugs and over-the-counter 
medications to State Veterans' Homes Aid and Attendance patients along 
with the payment of authorized per diem to State Veterans' Homes; and
      Allowing for full reimbursement of nursing home care to 
70 percent service-connected veterans or higher, if the veteran resides 
in a State Veterans' Home.

    The American Legion recommends $250 million for the State Extended 
Care Facility Construction Grants Program in FY 2008, $165 million more 
than the President's budget request. This additional funding will 
address more pending life-safety projects and new construction 
projects.
                      VA's LONG-TERM CARE MISSION
    Historically, VA's Long-Term Care (LTC) has been the subject of 
discussion and legislation for nearly two decades. In a landmark July 
1984 study, Caring for the Older Veteran, it was predicted that a wave 
of elderly veterans had the potential to overwhelm VA's long-term care 
capacity. Further, the recommendations of the Federal Advisory 
Committee on the Future of Long-Term Care in its 1998 report VA Long-
Term Care at the Crossroads, made recommendations that serve as the 
foundation for VA's national strategy to revitalize and reengineer 
long-term care services. It is now 2006 and that wave of veterans has 
arrived.
    Additionally, Public Law 106-117, the Millennium Act, enacted in 
November 1999, required VA to continue to ensure 1998 levels of 
extended care services (defined as VA nursing home care, VA 
domiciliary, VA home-based primary care, and VA adult day healthcare) 
in its facilities. Yet, VA has continually failed to maintain the 1998 
bed levels mandated by law.
    VA's inability to adequately address the long-term care problem 
facing the agency was most notable during the CARES process. The 
planning for the long-term care mission, one of the major services VA 
provides to veterans, was not even addressed in the CARES initiative. 
That CARES initiative is touted as the most comprehensive analysis of 
VA's healthcare infrastructure that has ever been conducted.
    Incredibly, despite 20 years of forewarning, the CARES Commission 
report to the VA Secretary states that VA has yet to develop a long-
term care strategic plan with well-articulated policies that address 
the issues of access and integrated planning for the long-term care of 
seriously mentally ill veterans. The Commission also reported that VA 
had not yet developed a consistent rationale for the placement of long-
term care units. It was not for the lack of prior studies that VA has 
never had a coordinated long-term care strategy. The Secretary's CARES 
decision agreed with the Commission and directed VHA to develop a 
strategic plan, taking into consideration all of the complexities 
involved in providing such care across the VA system.
    The American Legion supports the publishing and implementation of a 
long-term care strategic plan that addresses the rising long-term care 
needs of America's veterans. We are, however, disappointed that it has 
now been over 2 years since the CARES decision and no plan has been 
published.
    It is vital that VA meet the long-term care requirements of the 
Millennium Health Care Act and we urge this Committee to support 
adequate funding for VA to meet the long-term care needs of America's 
Veterans. The American Legion supports the President's $4.6 billion 
funding recommendation for FY 2008.
                                SUMMARY
    Mr. Chairman and Members of the Committee, The American Legion 
appreciates the strong relationship we have developed with this 
Committee. With increasing military commitments worldwide, it is 
important that we work together to ensure that the services and 
programs offered through VA are available to the new generation of 
American servicemembers who will soon return home. You have the power 
to ensure that their sacrifices are indeed honored with the thanks of a 
grateful nation.
    Thank you for allowing me the opportunity to present the views of 
The American Legion to you today.

                                 
Statement of David G. Greineder, Deputy National Legislative Director, 
                       American Veterans (AMVETS)
    Chairman Michaud, Ranking Member Miller, and Members of the 
Subcommittee:
    AMVETS is honored to join our fellow veterans service organizations 
and partners at this important hearing on the Department of Veterans 
Affairs Veterans Health Administration budget request for fiscal year 
2008. My name is David G. Greineder, Deputy National Legislative 
Director of AMVETS, and I am pleased to provide you with our best 
estimates on the resources necessary to carry out a responsible budget 
for VHA.
    As you know, AMVETS is a co-author of The Independent Budget. This 
is the 21st year AMVETS, the Disabled American Veterans, the 
Paralyzed Veterans of America, and the Veterans of Foreign Wars have 
pooled their resources together to produce a unique document, one that 
has stood the test of time.
    The IB, as it has come to be called, is our blueprint for building 
the kind of programs veterans deserve. Indeed, we are proud that over 
60 veteran, military, and medical service organizations endorse these 
recommendations. In whole, these recommendations provide decisionmakers 
with a rational, rigorous, and sound review of the budget required to 
support authorized programs for our nation's veterans.
    In developing this document, we believe in certain guiding 
principles. Veterans should not have to wait for benefits to which they 
are entitled. Veterans must be ensured access to high-quality medical 
care. Specialized care must remain the focus of VA. Veterans must be 
guaranteed timely access to the full continuum of healthcare services, 
including long-term care. And, veterans must be assured burial in a 
state or national cemetery in every state.
    As an aside, Mr. Chairman, AMVETS is honored that you are the 
recipient of the 2007 Congressional Silver Helmet award. You have been 
a strong and steadfast supporter of veterans throughout the years, and 
we look forward to presenting you with the Silver Helmet in March.
Veterans Health Administration
    Everyone knows that the VA healthcare system is the best in the 
country, and responsible for great advances in medical science. VHA is 
uniquely qualified to care for veterans' needs because of its highly 
specialized experience in treating service-connected ailments. The 
delivery care system can provide a wide array of specialized services 
to veterans like those with spinal cord injuries and blindness. This 
type of care is very expensive and would be almost impossible for 
veterans to obtain outside of VA.
    This week, Congress will finish work on a continuing resolution 
that will cover the rest of the 2007 fiscal year. We thank the 
leadership in the House, from both sides of the aisle, for their work 
in adding an additional $3.6 billion for VA in the continuing 
resolution. Since the start of the current fiscal year in October 2006, 
VA has been forced to ration care and place freezes on hiring medical 
staff. Furthermore, because VA resources has been strained for the 
nearly 5 months, it had to raid accounts from many important programs 
and functions. Frankly, Mr. Chairman, we cannot do this every year. We 
hope we can work together with you to find viable solutions to this 
yearly reoccurrence.
    For fiscal year 2008, the Administration requests $34.2 billion for 
veterans' healthcare, a $1.9 billion increase over the House-passed 
continuing resolution. AMVETS recognizes this increase is more than 
what VA has seen in other years, however it still falls short. The 
Independent Budget recommends Congress provide $36.3 billion to fund VA 
medical care for FY08, an increase of $4 billion over the FY07 
appropriation and $2.1 billion over the Administration request.
    AMVETS, along with our Independent Budget partners, reaffirm our 
belief that Priority 8 veterans should be allowed to access VA if they 
so chose, and we encourage VA to overturn its current policy banning 
these so-called ``high-income'' veterans. VA estimates that more than 
1.5 million category 8 veterans will be denied enrollment in 2008. This 
is unacceptable and we will continue our fight for them and all 
veterans when it comes to accessing the quality services VA has to 
offer.
    We are disappointed, and quite frankly irritated, that the 
Administration once again recommended an increase in prescription drug 
copayments from $8 to $15 and an indexed enrollment fee, based on 
veteran incomes. Although VA has not clearly explained the ramification 
of such a policy proposal, we estimate that as many as 200,000 veterans 
will leave the system and more than one million veterans will choose 
not to enroll. Is this the message VA wants to send to the 26 million 
veterans that are alive today, and thousands more returning home from 
operations overseas? Congress has soundly rejected these proposals in 
the past, and we ask you do the same this year.
Assured Funding
    Because veterans depend so much on VA and its services, AMVETS 
believes it is absolutely critical that the VA healthcare system be 
fully funded. It is important our nation keep its promise to care for 
the veterans who made so many sacrifices to ensure the freedom of so 
many. With the expected increase in the number of veterans, a need to 
increase VA healthcare spending should be an immediate priority this 
year. We must remain insistent about funding the needs of the system, 
and the recruitment and retention of vital healthcare professionals, 
especially registered nurses. Chronic underfunding has led to rationing 
of care through reduced services, lengthy delays in appointments, 
higher copayments and, in too many cases, sick and disabled veterans 
being turned away from treatment.
    One option, and we believe the best choice, to ensure VA has access 
to adequate and timely resources is through mandatory, or assured, 
funding. I would like to clearly state that AMVETS along with its 
Independent Budget partners strongly supports shifting VA healthcare 
funding from discretionary funding to mandatory. We recommend this 
action because the current discretionary system is not working. Moving 
to mandatory funding would give certainty to healthcare services. VA 
facilities would not have to deal with the uncertainty of discretionary 
funding, which has been inconsistent and inadequate for far too long. 
Most importantly, mandatory funding would provide a comprehensive and 
permanent solution to the current funding problem.
    AMVETS is encouraged from the positive responses we received from 
the Leadership in the House in holding hearings on the subject of 
mandatory funding. This is a start, and one AMVETS looks forward to. We 
feel that discussing the topic in a public forum, and reviewing and 
critiquing the merits of different proposals is how the democratic 
process should work. We are anxious to begin the dialogue, Mr. 
Chairman, and are available as a resource to you and your staff.
    Mr. Chairman, this concludes my testimony. I thank you again for 
the privilege to present our views, and I would be pleased to answer 
any questions you might have.

                                 
Statement of Hon. Corrine Brown, a Representative in Congress from the 
                            State of Florida
    Chairman Michaud, thank you for holding this hearing and inviting 
the Under Secretary to discuss the health budget of the Department of 
Veterans Affairs.
    I would like to thank the groups here today to speak on the VA 
health budget. The American Psychiatric Association, Friends of VA 
Medical Care and Health Research and the Iraq and Afghanistan Veterans 
of America.
    Mr. Under Secretary, thank you for coming today to discuss this 
budget. I do not agree with most of it, and there is much that I would 
change.
    I look forward to hearing new information from you on the specific 
health budget.
    However, why do you continue to put forward proposals that hurt 
individual veterans, the men and women who have served their country 
and have paid into THEIR system with their blood and sweat.
    Every year you include drug co-pays and enrollment fees. Every 
year, you do what you can to drive veterans out of the VA system. By 
your own estimate, enrollment fees would drive out over 200,000 
veterans from the healthcare system they built and deserve. You still 
do not allow new Priority 8 veterans into the system.
    Last week the Secretary said there were 1.6 million Priority 8 
veterans. Also that it would cost $1.7 billion to include them in the 
system. Isn't that the point--to include all veterans in the VA 
healthcare system?
    Every year, the Congress, Members of both the Republican and 
Democrat parties, reject co-pays and enrollment fees.
    And this year, you are balancing the budget on the backs of 
veterans even more blatantly than ever. The money raised with this tax 
on veterans' health would go directly into the U.S. Treasury.
    How dare you use budget gimmicks and tricks to fund tax cuts for 
the wealthy?
    No matter what the Secretary said last week, you are cutting VA 
medical and prosthetic research. At a time when ever more young men and 
women are coming back from Afghanistan and Iraq without limbs, we need 
to fund this.
    Thank God that more soldiers than ever are surviving their 
battlefield injuries. Why does it seem to me you are doing all you can 
to push them out of the system.
    We are doing remarkable things for these soldiers and to cut 
funding at this time says to current and future soldiers to not get 
hurt, because you will be on your own.
    Once again I am reminded of the words of the first President of the 
United States, George Washington:

        ``The willingness with which our young people are likely to 
        serve in any war, no matter how justified, shall be directly 
        proportional as to how they perceive the veterans of earlier 
        wars were treated and appreciated by their country.''

                                 
               Statement of Paralyzed Veterans of America
    Mr. Chairman and Members of the Committee, on behalf of the four 
co-authors of The Independent Budget, Paralyzed Veterans of America 
(PVA) is pleased to present our views for the record of The Independent 
Budget regarding the funding requirements for the Department of 
Veterans Affairs (VA) healthcare system for FY 2008.
    PVA, along with AMVETS, Disabled American Veterans, and the 
Veterans of Foreign Wars, is proud to come before you this year marking 
the beginning of the third decade of The Independent Budget, a 
comprehensive budget and policy document that represents the true 
funding needs of the Department of Veterans Affairs. The Independent 
Budget uses commonly accepted estimates of inflation, healthcare costs 
and healthcare demand to reach its recommended levels. This year, the 
document is endorsed by 53 veterans' service organizations, and medical 
and healthcare advocacy groups.
    Last year proved to be a unique year for reasons very different 
from 2005. The VA faced a tremendous budgetary shortfall during FY 2005 
that was subsequently addressed through supplemental appropriations and 
additional funds added to the FY 2006 appropriation. For FY 2007, the 
Administration submitted a budget request that nearly matched the 
recommendations of The Independent Budget. These actions simply 
validated the recommendations of The Independent Budget once again.
    Unfortunately, as of today, Congress has yet to complete the 
appropriations bill more than one-third of the way through the current 
fiscal year. Despite the positive outlook for funding as outlined in 
H.J. Res. 20, the FY 2007 Continuing Resolution, the VA has been placed 
in a critical situation where it is forced to ration care and place 
freezes on hiring of much needed medical staff. Waiting times have also 
continued to increase. Furthermore, the VA has had to cannibalize other 
accounts in order to continue to provide medical services, jeopardizing 
not only the VA healthcare system but the actual healthcare of 
veterans. It is unconscionable that Congress has allowed partisan 
politics and political wrangling to trump the needs of the men and 
women who have served and continue to serve in harm's way.
    For FY 2008, the Administration has requested $34.2 billion for 
veterans' healthcare, a $1.9 billion increase over the levels 
established in H.J. Res. 20, the continuing resolution for FY 2007. 
Although we recognize this as another step forward, it still falls well 
short of the recommendations of The Independent Budget. For FY 2008, 
The Independent Budget recommends approximately $36.3 billion, an 
increase of $4.0 billion over the FY 2007 appropriation level yet to be 
enacted and approximately $2.1 billion over the Administration's 
request.
    The medical care appropriation includes three separate accounts--
Medical Services, Medical Administration, and Medical Facilities--that 
comprise the total VA healthcare funding level. For FY 2008, The 
Independent Budget recommends approximately $29.0 billion for Medical 
Services. Our Medical Services recommendation includes the following 
recommendations:

 
                                                          (Dollars in
                                                           Thousands)
 
Current Services Estimate                                   $26,302,464
Increase in Patient Workload                                $ 1,446,636
Increase in Full-time Employees                            $    105,120
Policy Initiatives                                          $ 1,125,000
                                                      ------------------
  Total FY 2008 Medical Services                            $28,979,220
 

    In order to develop our current services estimate, we used the 
Obligations by Object in the President's Budget to set the framework 
for our recommendation. We believe this method allows us to apply more 
accurate inflation rates to specific accounts within the overall 
account. Our inflation rates are based on 5-year averages of different 
inflation categories from the Consumer Price Index-All Urban Consumers 
(CPI-U) published by the Bureau of Labor Statistics every month.
    Our increase in patient workload is based on a 5.5 percent increase 
in workload. This projected increase reflects the historical trend in 
the workload increase over the last 5 years. The policy initiatives 
include $500 million for improvement of mental health services, $325 
million for funding the fourth mission (an amount that nearly matches 
current VA expenditures for emergency preparedness and homeland 
security as outlined in the 2007 Mid-Session Review), and $300 million 
to support centralized prosthetics funding.
    For Medical Administration, The Independent Budget recommends 
approximately $3.4 billion. Finally, for Medical Facilities, The 
Independent Budget recommends approximately $4.0 billion. This 
recommendation includes an additional $250 million above the FY 2008 
baseline in order to begin to address the non-recurring maintenance 
needs of the VA.
    Although The Independent Budget healthcare recommendation does not 
include additional money to provide for the healthcare needs of 
category 8 veterans now being denied enrollment into the system, we 
believe that adequate resources should be provided to overturn this 
policy decision. VA estimates that more than 1.5 million category 8 
veterans will have been denied enrollment in the VA healthcare system 
by FY 2008. Assuming a utilization rate of 20 percent, in order to 
reopen the system to these deserving veterans, The Independent Budget 
estimates that VA will require approximately $366 million. The 
Independent Budget veterans service organizations (IBVSO) believe the 
system should be reopened to these veterans and that this money should 
be appropriated in addition to our Medical Care recommendation.
    Although not proposed to have a direct impact on veterans' 
healthcare, we are deeply disappointed that the Administration chose to 
once again recommend an increase in prescription drug copayments from 
$8 to $15 and an indexed enrollment fee based on veterans' incomes. 
These proposals will simply add additional financial strain to many 
veterans, including PVA members and other veterans with catastrophic 
disabilities. Although the VA does not overtly explain the impact of 
these proposals, similar proposals in the past have estimated that 
nearly 200,000 veterans will leave the system and more than 1,000,000 
veterans will choose not to enroll. It is astounding that this 
Administration would continue to recommend policies that would push 
veterans away from the best healthcare system in the world. Congress 
has soundly rejected these proposals in the past and we call on you to 
do so once again.
    For Medical and Prosthetic Research, The Independent Budget is 
recommending $480 million. This represents a $66 million increase over 
the FY 2007 appropriated level established in the continuing resolution 
and $69 million over the Administration's request for FY 2008. We are 
very concerned that the Medical and Prosthetic Research account 
continues to face a virtual flatline in its funding level. Research is 
a vital part of veterans' healthcare, and an essential mission for our 
national healthcare system. VA research has been grossly underfunded in 
comparison to the growth rate of other federal research initiatives. We 
call on Congress to finally correct this oversight.
    The Independent Budget recommendation also recognizes a significant 
difference in our recommended amount of $1.34 billion for Information 
Technology versus the Administration's recommended level of $1.90 
billion. However, when compared to the account structure that The 
Independent Budget utilizes, the Administration's recommendation 
amounts to approximately $1.30 billion. The Administration's request 
also includes approximately $555 million in transfers from all three 
accounts in Medical Care as well as the Veterans Benefits 
Administration and the National Cemetery Administration. Unfortunately, 
these transfers are only partially defined in the Administration's 
budget justification documents. Given the fact that the veterans' 
service organizations have been largely excluded from the discussion of 
how the Information Technology reorganization would take place and the 
fact that little or no explanation was provided in last year's budget 
submission, our Information Technology recommendation reflects what 
information was available to us and the funding levels that Congress 
deemed appropriate from last year. We certainly could not have foreseen 
the VA's plan to shift additional personnel and related operations 
expenses.
    Finally, we remain concerned that the Major and Minor Construction 
accounts continue to be underfunded. Although the Administration's 
request includes a fair increase in Major Construction from the 
expected appropriations level of $399 million to $727 million, it still 
does not go far enough to address the significant infrastructure needs 
of the VA. Furthermore, the actual portion of the Major Construction 
account that will be devoted to Veterans Health Administration 
infrastructure is only approximately $560 million. We also believe that 
the Minor Construction request of approximately $233 million does 
little to help the VA offset the rising tide of necessary 
infrastructure upgrades. Without the necessary funding to address minor 
construction needs, these projects will become major construction 
problems in short order. For FY 2008, The Independent Budget recommends 
approximately $1.6 billion for Major Construction and $541 million for 
Minor Construction.
    In closing, to address the problem of adequate resources provided 
in a timely manner, The Independent Budget has proposed that funding 
for veterans' healthcare be removed from the discretionary budget 
process and made mandatory. The budget and appropriations process over 
the last number of years demonstrates conclusively how the VA labors 
under the uncertainty of not only how much money it is going to get, 
but, equally important, when it is going to get it. No Secretary of 
Veterans Affairs, no VA hospital director, and no doctor running an 
outpatient clinic knows how to plan and even provide care on a daily 
basis without the knowledge that the dollars needed to operate those 
programs are going to be available when they need them.
    Making veterans healthcare funding mandatory would not create a new 
entitlement, rather, it would change the manner of healthcare funding, 
removing the VA from the vagaries of the appropriations process. Until 
this proposal becomes law, however, Congress and the Administration 
must ensure that VA is fully funded through the current process. We 
look forward to working with this Committee in order to begin the 
process of moving a bill through the House, and the Senate, as soon as 
possible.
    In the end, it is easy to forget, that the people who are 
ultimately affected by wrangling over the budget are the men and women 
who have served and sacrificed so much for this nation. We hope that 
you will consider these men and women when you develop your budget 
views and estimates, and we ask that you join us in adopting the 
recommendations of The Independent Budget.
    This concludes our statement. We would be happy to answer any 
questions that you might have for the record.

                                 
Statement of Hon. Cliff Stearns, a Representative in Congress from the 
                            State of Florida
    Mr. Chairman, thank you for holding this hearing today on the 
proposed budget. Health services are a cornerstone of the Veteran's 
Affairs mission, and I am looking forward to discussing proposals for 
improvement in delivering critical services to our veterans.
    I am encouraged that the Administration request includes an 
increase in medical care of $1.9 billion over fiscal year 2007, and in 
particular I am pleased by the $56 million increase in the VA's Mental 
Health Initiative, for a total of $360 million. This has been a 
neglected area in the past, but it needs increased focus now as more 
and more veterans coming home from Iraq and Afghanistan are suffering 
from Post-Traumatic Stress Disorder. We need to make sure that they and 
their families receive the counseling they need.
    Our veterans have provided this country with invaluable service, 
and yet too often the disability claims process is complicated and 
frequently delayed. It is imperative that we work quickly to resolve 
this overwhelming backlog in processing claims. The most time consuming 
process would be processing new claims, and with the VA anticipating 
more than 54,000 veterans returning from Iraq and Afghanistan in 2008, 
we must reform the process to make it efficient and thorough.
    An additional area of delay is filing ratings claims, which takes 
on average 155 days to process! The VA anticipates seeing 5.3 million 
veterans in 2008, which represents an incredible administrative burden, 
and portends of even longer claims processing delays. We must seek ways 
to allocate staff efficiently and utilize advancements in technology to 
reduce this burdensome backlog.
    Thank you again, Mr. Chairman, for holding this hearing, and I look 
forward to hearing the vision for veterans healthcare 2008 from today's 
panel.

                                 
              Statement of John Rowan, National President,
     Vietnam Veterans of America (VVA), Patricia Bessigano, Chair,
VVA National Veterans Healthcare Committee; and Thomas J. Berger, Ph.D.,

       Chairman, VVA National PTSD and Substance Abuse Committee
    Chairman Michaud, Ranking Member Miller and distinguished Members 
of the Subcommittee, on behalf of all of our officers, Board of 
Directors, and members, I thank you for allowing Vietnam Veterans of 
America (VVA) the opportunity to submit this statement for the record 
regarding the President's fiscal year 2008 budget request for the 
Veterans Health Administration of the Department of Veterans Affairs. 
VVA looks forward to working with you and all of your distinguished 
colleagues to address the needs of the unique system created to serve 
our Nation's veterans.
    Mr. Chairman, several years ago, Vietnam Veterans of America 
developed a White Paper in support of the need for assured funding for 
the veterans healthcare system, which I hope you have read and shared 
with others. We hope that you will remain a strong supporter of 
legislation to achieve assured funding. There is a clear and urgent 
need for such a mechanism to correct the problems in the current system 
of funding. As we have this discussion in regard to the FY08 budget for 
VHA, the readily apparent need for this legislation has never been more 
pressing. We look forward to working with you to ensure its enactment.
    VVA does wish to recognize that this year's request from the 
President for the VA Budget, while lacking in many other respects, is 
relatively free of ``budget gimmicks'' that have so plagued discussions 
in the past. VVA believes that this is due to the strong efforts of 
Secretary Nicholson in doing battle to strip out the favorite 
``gimcrackery'' of that permanent staff over at the Office of 
Management & Budget (OMB). VVA commends the Secretary of Veterans 
Affairs in this regard for seeking to have an honestly presented budget 
proposal.
Veterans Health Administration
    VVA is recommending an increase of $6.9 billion to the expected 
fiscal year 2007 appropriation for the medical care business line. We 
recognize that the budget recommendation VVA is making this year is 
extraordinary, but with troops in the field, years of underfunding of 
healthcare organizational capacity, renovation of an archaic and 
dilapidated infrastructure, updating capital equipment, and several 
cohorts of war veterans reaching ages of peak healthcare utilization, 
these are extraordinary times. It's past time to meet these needs.
    In contrast to what is clearly needed, we believe the 
Administration's fiscal year 2008 request for $2 billion more than the 
expected 2007 appropriation in the continuing resolution is inadequate. 
Unfortunately, we still are unsure of the bottom line for fiscal year 
2007. While we certainly appreciate that the Congress is planning to 
restore funding for veterans healthcare in the continuing resolution 
(and it is essential that it does so to ensure the Department's ability 
to meet ongoing obligations), the fact that VA is still uncertain about 
the amount of funding it will receive a third of the way through the 
fiscal year does, virtually in and of itself, make the case for assured 
funding.
    The $2 billion increase the Administration has requested for 
medical care may almost keep pace with inflation, but it will not allow 
VA to enhance its healthcare or mental healthcare services for 
returning veterans, restore diminished staff in key disciplines like 
clinicians needed to care for Hepatitis C, restore needed long-term 
care programs for aging veterans, or allow working-class veterans to 
return to their healthcare system. VVA's recommendation does 
accommodate these goals, in addition to restoring eligibility to 
veterans exposed to Agent Orange for the care of their related 
conditions.
    The Veterans Health Administration of the Department of Veterans 
Affairs has had many successes, and been recognized by numerous 
prestigious awards in recent years. The veterans' service organizations 
are often seen as critics of the Department, but while it's true that 
we sometimes take exception to its policy decisions we are, in fact, 
also its most stalwart champions. Over the last decade the Veterans 
Health Administration (VHA) at VA has taken steps to become a higher 
quality, more accessible healthcare system. It has demonstrated great 
efficiency by almost doubling the number of veterans it treats while 
holding per capita costs relatively constant. (Unfortunately, they have 
gone way too far in staff reductions through attrition, which now 
urgently needs correction.) It has developed hundreds of Community 
Based Outreach Clinics (CBOCs). VHA has received many prestigious 
awards for excellence and innovation. While VVA remains extremely 
concerned about recent breaches that compromised veterans' personal 
data to the outside world, and we remain equally concerned regarding 
the privacy of a veterans' personal health and other information within 
the VA structure, VVA does appreciates the fact that VA has put 
together a computerized system of medical records that sets the 
standard for modern healthcare delivery. These achievements are to be 
celebrated.
    Yet, these advances have not come without a cost. For years, the 
veterans' healthcare system has been falling behind in meeting the 
healthcare needs of some veterans. At the beginning of 2003, the former 
Secretary of Veterans Affairs made the decision to bar so-called 
Priority 8 veterans from enrolling. In most cases, these veterans are 
not the well-to-do--they are working-class veterans or veterans living 
on fixed incomes as little as $28,000 a year. It's not uncommon to hear 
about such veterans choosing between getting their prescription drug 
orders filled and paying their utility bills. The so-called 
``temporary'' decision to bar these veterans is still standing and is 
reflected now in the long-term planning for the VHA. This is still 
troubling to thoughtful Americans.
    In addition to the current bar on healthcare enrollment, in recent 
years VA has sent Congress a budget that requires more cost-sharing 
from veterans, and eliminates options for their care--particularly 
long-term care. We appreciate that VA's proposal this year has not 
presumed enactment of some of the cost-sharing legislative proposals 
Congress has opposed in the past. This may allow Congress more leeway 
to augment its request in concrete ways rather than merely filling 
deficits left by the Administration presuming that revenues and savings 
from these unpopular initiatives will be realized.
    Congress is to be commended for turning back many legislative 
requests for enrollment fees and outpatient cost increases in the past, 
which would have jeopardized hundreds of thousands of veterans' access 
to healthcare. Hard-fought Congressional add-ons, such as the $3.6 
billion for fiscal year 2007 currently being debated as part of the 
continuing resolution, have kept the system afloat. The budget 
recommended by VVA in addition to the enactment of some assured funding 
mechanism will enable a robust healthcare system to meet the needs of 
all eligible veterans--now and in the future.
Medical Services
    For medical services for fiscal year 2008, VVA recommends $34.5 
billion, including collections. This is approximately $5 billion more 
than the Administration's request. VVA is making its budget 
recommendations based on re-opening access to the millions of veterans 
disenfranchised by the Department's policy decision of early 2003 that 
was supposed to be ``temporary.'' The former Ranking Member of the 
House Veterans' Affairs Committee, Lane Evans, discovered that a 
quarter-million Priority 8 veterans had applied for care in fiscal year 
2005. Similar numbers of veterans have likely applied in each of the 
years since their enrollment was barred. Our budget allows 1.5 million 
new Priority 7 and 8 veterans to enroll for care in their healthcare 
system. While this may sound like too great a lift for the system, use 
rates for Priority 7 and 8 veterans are much lower than for other 
priority groups. Based on our estimates, it may yield only an 8% 
increase in demand at a cost of about $1.5 billion to the system for 
additional personnel, supplies and facilities.
    The budget axe has fallen hard on long-term care programs in VA. 
About a decade ago, there was a major policy shift throughout the 
healthcare industry, including with VA, which encouraged programs to 
deliver as much care as possible outside of beds. In many cases this 
has been a productive policy. Veterans value the convenience of using 
nearby community clinics for primary care needs, for example.
    However, the change took a great toll on the neuro-psychiatric and 
long-term care programs that housed and cared for thousands of 
veterans, often keeping them institutionalized for years. Instead of 
developing the significant community and outpatient infrastructures 
that would have been necessary to adequately replace the care for these 
most vulnerable veterans, the resources were largely diverted to other 
purposes.
    Where have these vets gone? The fiscally challenged Medicaid 
program supports many of those who need long-term care, adding an 
additional burden to the states. State homes play an important role in 
remaining the only VA-sponsored setting that provides ongoing, rather 
than rehabilitative or restorative, long-term care. VA's mental health 
programs--some of the finest in the nation--as well as significant 
advances in pharmaceutical therapies continue to serve and allow many 
veterans to recover. However, what are in fact increasing waiting times 
for mental health programs and the lack of treatment options often 
contribute to incarceration and homelessness for the most vulnerable of 
these veterans. Sadly, we hear increasing numbers of stories of 
veterans of Iraq and Afghanistan whose inability to deal with 
readjustment post-deployment have lead them to the streets or even 
suicide.
Mental Health, PTSD, and Other Needs Underestimated
    Mr. Chairman, Vietnam Veterans of America's founding principle is: 
``Never again will one generation of veterans abandon another.'' This 
is why we are imploring this Committee to ensure that VA has the 
imperative and the resources to bolster the mental health programs that 
should be readily available to serve our young veterans from Iraq and 
Afghanistan. Experts from within the Department of Defense estimate 
that as many as 17% of those who serve in Iraq will have issues 
requiring them to seek post-deployment mental health services and 
recent studies have shown that four out of five of the veterans who may 
need post-deployment care are not properly referred to such care. There 
is good reason to believe that even the rates forecast by DoD may be 
too low.
    VA has not made enough progress in preparing for the needs of 
troops returning from Iraq and Afghanistan--particularly in the area of 
mental healthcare and Traumatic Brain Injury (TBI). Its own internal 
champions--the Committee on Care of the Seriously Mentally Ill and the 
Advisory Committee on Post-Traumatic Stress Disorder, for example--have 
expressed doubts about VA's mental healthcare capacity to serve these 
newest vets. As recently as last March, VHA's Under Secretary for 
Health Policy Coordination told one commission that mental health 
services were not available everywhere, and that waiting times often 
rendered some services ``virtually inaccessible.'' The doubts about 
capacity to serve new veterans have reverberated in reports done by the 
Government Accountability Office (GAO). In addition, one recent working 
paper by Linda Bilmes of the John F. Kennedy School of Government at 
Harvard University estimates that in a ``moderate'' scenario in 2008 VA 
will require $1.8 billion to treat the veterans returning from Iraq and 
Afghanistan--much of this funding would be used to augment mental 
healthcare to properly serve these veterans. VA has projected that 
approximately 260,000 Global War on Terrorism (GWOT) veterans will use 
the VA healthcare system in FY08. VVA and others believe that well more 
than 300,000 ``new'' veterans will use the VHA system in FY08.
Poor Projection Formula Inappropriate for Military Veterans Healthcare 
        Needs
    A further reason that VA has underestimated the need for medical 
services is that they continue to use the same formula that they use 
for CARES, which is a civilian-based model. Mr. Chairman, VVA has 
testified many times that the VHA must be a ``veterans' healthcare 
system'' and not a general healthcare system that just happens to see 
veterans if the VHA is to properly and adequately address the needs of 
veterans, particularly veterans who are sick or injured in military 
service. The model developed by Millman & Associates that VA uses was 
designed for middle-class people who can afford HMOs or other such 
programs. It projects only one to three presentations (things wrong 
with) per patient as opposed to the five to seven per veteran patient 
that is the average at VHA. Some adjustment to this is done on the 
basis of clinic stops or visits, but it still underestimates the total 
usage rate per individual veteran that is actually needed. Obviously 
one using the VA model will continually underestimate overall resources 
needed to care for the veterans who come to the system by using this 
civilian formula. Further, VHA has been consistent in underestimating 
the number of GWOT returnees who will seek services from the system in 
each of the last 4 years. VVA has corrected these errors in our 
projections.
    In addition to the funds VVA is recommending elsewhere, we 
specifically recommend an increase of an additional billion dollars to 
assist VA in meeting the long-term care and mental healthcare needs of 
all veterans. These funds should be used to develop or augment with 
permanent staff at VA Vet Centers (Readjustment Counseling Service, or 
RCS), as well as PTSD teams and substance use disorder programs at VA 
Medical Centers and CBOCs, which will be sought after as more troops 
(including demobilized National Guard members and Reservists) return 
from ongoing deployments. In addition, VA should be augmenting its 
nursing home beds and community resources for long-term care, 
particularly at the State veterans' homes.
Improperly High Doctor-Patient and Nurse-Patient Ratios Must Be 
        Addressed
    To assist in developing these programs and augmenting all areas of 
veterans' care, VVA recommends funding to accommodate the staff-to-
patient ratio VA had in place before VA had dismantled so much of its 
neuro-psychiatric and long-term care infrastructure. This would allow 
VA to better ensure timely access to care and services. Studies have 
shown that inadequate staffing--particularly of nurses involved in 
direct care--is correlated with poorer healthcare outcomes in all 
medical disciplines. To allow the staffing ratios that prevailed in 
1998 for its current user population, VA would have to add more than 
20,000 direct-care employees--MDs and nurses--at a cost of about $2.2 
billion.
    The $2.2 billion funding for the staff shortfalls identified by VVA 
all too closely corresponds to the funding from unspecified (so called) 
``management efficiencies'' VA has had to shoulder throughout this 
Administration for this to be a coincidence. It is important to realize 
that the effect of leaving these funding deficiencies unfulfilled is 
cumulative. That is, each year VA is forced to live with a greater hole 
in its budget. GAO has joined VSOs and Congress in questioning the 
extent to which VA has been able to identify and realize the so-called 
savings created by such proposed efficiencies. VA officials have 
advised GAO that the efficiencies identified in at least two recent 
budget proposals--FY03 and 04--were developed to allow VA to meet its 
budget guidance rather than by detailed plans for achieving such 
savings (GAO-06-359R). In other words, the savings were justified only 
by the need to meet the Administration's ``bottom line.'' The cuts (and 
they were indeed budget cuts) were met by reductions in staff. (This 
was done primarily through attrition and then just not filling 
positions, although some RIFs and buyouts probably occurred during this 
timeframe as well.) These so-called management efficiencies have 
resulted in staff deficiencies across the spectrum of medical 
disciplines, and across the country. VVA hopes Congress will agree that 
this is no way to fund our veterans' healthcare system.
    Further, the staff cuts referenced above have caused VA to often 
rely on contracting out using such gimmicks as the inaptly named 
``Project HERO'' that VHA is about to use to further contract out 
services instead of hiring full time staff clinicians and properly 
training them in the wounds and maladies particular to military 
service, depending on what branch one served, when they served, where 
they served, their military occupational specialty, and what actually 
happened to them (e.g., SHAD biological and chemical exposures). While 
the VHA has created such curricula, as part of the Veterans Health 
Initiative (www.va.gov/vhi), most clinicians and no contractors even 
know of the existence of these curricula.
    The extensive use of contracting out medical services by VHA is 
both the result of underfunding, and a costly, wasteful solution to the 
problem created by the staff shortages resulting from the same 
underfunding. This is not a rational or proper way to run a healthcare 
system, much less one for our nation's veterans, who have already given 
so much.
Agent Orange Healthcare
    For our last point under Medical Services, VVA believes Congress 
did a grave injustice to Vietnam-era veterans. For decades, veterans 
exposed to Agent Orange and other herbicides containing dioxin had been 
granted healthcare for conditions that were presumed to be due to this 
exposure. This special eligibility expired at the end of 2005. Despite 
VVA's repeated requests, Congress did not reauthorize it. Had Congress 
simply reauthorized existing authority, VA would have realized no new 
costs. Now we understand that the Congressional Budget Office estimates 
that it will cost more than $300 million to restore this eligibility. 
Why this eligibility was allowed to expire seems more a matter of 
dollars than sense to VVA, given the ever-mounting body of research 
that clearly points to conditions such as diabetes being linked to 
dioxin exposure. However, the pressing issue now is to reinstate 
veterans with these conditions for the higher priority access to 
services that they deserve.
Vet Centers (Readjustment Counseling Service)
    VVA believes that announced expansion of the Readjustment 
Counseling Service by opening 23 new Vet Centers is great, and a much 
needed move on the part of the VA. However, this will be a great thing 
only if the Readjustment Counseling Service (RCS) is accorded at least 
another 300(+) FTEE. The RCS already needs at least another 250 full 
time professional staff members to provide one family counselor cross 
trained in PTSD and bereavement counseling at each of the 209 existing 
Vet Centers, and to provide 40 more staff members RCS-wide, so that the 
Director of RCS does not have to juggle vacancies just in order to keep 
operating. That is the case today, before the addition of these 23 new 
Vet Centers.
    In addition to these needed additional FTEE, VVA strongly 
encourages changing Chapter 41 of Title 38 to require a full time DVOP 
be permanently out-stationed at each VA Vet Center, with the 
appropriate computer support, travel allowance, etc. to be able to 
develop jobs in the community for the vets utilizing that Vet Center. 
The best of the Vet Centers around the country have some sort of 
arrangement like this, but the state workforce developments in many 
cases are ending that support, even where it exists.
    Helping a veteran get to the point where he or she can obtain AND 
sustain meaningful employment at a living wage is still the central 
event in the readjustment process. We have not paid sufficient 
attention to this fact in the past, and we need to ensure insofar as 
possible that we provide sufficient resources for employment for those 
coming home today.
    If the U.S. Department of Labor and the workforce development 
agencies that actually employ the DVOPs won't do this properly (as is 
currently the case), then there must be new VA Vocational 
Rehabilitation specialists, skilled in job placement as well as 
education and training issues, who are located one counselor in each 
Vet Center.
Medical Facilities
    For medical facilities for fiscal year 2008, VVA recommends $5.1 
billion. This is approximately $1.5 billion more than the 
Administration's request for fiscal year 2008. Maintenance of the 
healthcare system's infrastructure and equipment purchases are often 
overlooked as Congress and the Administration attempt to correct more 
glaring problems with patient care. In FY06, in just one example, 
within its medical facilities account VA anticipated spending $145 
million on equipment, yet only spent about $81 million. (The rest of 
the funds went just to meet costs to keep the facilities open and 
operating.) However, these projects can only be neglected for so long 
before they compromise patient care, and employee safety in addition to 
risking the loss of outside accreditation. The remainder of the funding 
was apparently shifted to other more immediate priority areas (i.e., 
keeping facilities operating in the short run).
    VA undertook an intensive process known as CARES (Capital Asset 
Realignment to Enhance Services) to ``right-size'' its infrastructure, 
culminating in a May 2004 policy decision that identified approximately 
$6 billion in construction projects. While for the reasons noted above 
the VA has consistently underestimated future needs by using a fatally 
flawed formula, thus far Congress and the Administration have only 
committed $3.7 billion of this all too conservative needed funding.
    We believe the CARES estimate to be extremely conservative given 
that the models projecting healthcare utilization for most services 
were based on use patterns in generally healthy managed care 
populations rather than veterans and that the patient population base 
did not include readmitting Priority 8 veterans, or significant 
casualties from the current deployments. Notwithstanding our concerns 
about the methods used in CARES, very few of the projects VA agrees are 
needed have been funded since this time. Non-recurring maintenance and 
capital equipment budgets have also been grievously neglected as 
administrators have sought to shore up their operating funds.
    In a system in which so much of the infrastructure would be deemed 
obsolete by the private sector (in a 1999 report GAO found that more 
than 60% of its buildings were more than 25 years old), this has and 
may again lead to serious trouble. We are recommending that Congress 
provide an additional $1.5 billion to the medical facilities account to 
allow them to begin to address the system's current needs. We also 
believe that Congress should fully fund the major and minor 
construction accounts to allow for the remaining CARES proposals to be 
properly addressed by funding these accounts with a minimum of 
remaining $2.3 billion.
Medical and Prosthetic Research
    For medical and prosthetic research for fiscal year 2008, VVA 
recommends $460 million. This is approximately $50 million more than 
the Administration's request for fiscal year 2008. VA research has a 
long and distinguished portfolio as an integral part of the veterans' 
healthcare system. Its funding serves as a means to attract top medical 
schools into valued affiliations and allows VA to attract distinguished 
academics to its direct-care and teaching missions.
    VA's research program is distinct from that of the National 
Institutes of Health because it was created to respond to the unique 
medical needs of veterans. In this regard, it should seek to fund 
veterans' pressing needs for breakthroughs in addressing environmental 
hazard exposures, post-deployment mental health, traumatic brain 
injury, long-term care service delivery, and prosthetics to meet the 
multiple needs of the latest generation of combat-wounded veterans.
Agent Orange Research
    VVA brings to your attention that VA Medical and Prosthetic 
Research is not currently funding a single study on Agent Orange or 
other herbicides used in Vietnam, despite the fact that more than 
300,000 veterans are now service-connected disabled as a direct result 
of such exposure in that war.
    When VVA pressed VA last Fall in this regard, they for the first 
time made available the results of some mortality studies done by VA's 
Public Health & Environmental Hazards staff member Dr. Han Kang. (VVA 
has supplied your staff with 
copies of the results of these studies as we have received them from 
VA.)
    VA tried to say that this was sufficient for research into the 
deleterious healthcare effects of Agent Orange, other herbicides used 
in the Vietnam War, and all of the other toxins that were rife in 
Vietnam during the war. With the permission of the Committee, Mr. 
Chairman, I ask that the results of these studies be entered into the 
record, as VA has never made any effort to publicize or follow up on 
the results which indicated that there are many more maladies that 
should be service connected presumptive for those who served in 
Vietnam, but which are not so today. This is largely the function of 
there not being enough studies in this area, and VA is not funding even 
internal research, much less outside studies that the veterans' 
population is more inclined to believe would be objective and 
scientifically valid research. I have submitted these studies to the 
Subcommittee under separate cover for your consideration, Mr. Chairman.
    VVA unequivocally takes the position that this total lack of 
funding further research that is indicated as needed by the VA's own 
mortality and morbidity studies by Dr. Kang is simply unacceptable, and 
urges the Subcommittee to demand to know why this is the case.
Women Veterans and Mental Health
    In the Iraq and Afghanistan wars ``combat support troops'' are just 
as likely to be affected by the same traumas as infantry personnel. 
This has particularly important implications for our female soldiers, 
who now constitute about 16 percent of our fighting force. Returning 
female OIF and OEF troops face ailments and traumas of a different 
sort. For example, studies conducted at the Durham, North Carolina 
Comprehensive Women's Health Center by VA researchers have demonstrated 
higher rates of suicidal tendencies among women veterans suffering 
depression with co-morbid PTSD. And according to a Pentagon study 
released in March 2006, more female soldiers report mental health 
concerns than their male comrades, 24 percent compared with 19 percent. 
In addition, roughly 40 percent of these women have musculoskeletal 
problems that doctors say likely are linked to lugging too-heavy and 
ill-fitted equipment. A considerable number--28 percent--also return 
with genital and urinary system infections.
    There are also gender-related social issues that make transitioning 
tough for women. For example, women are more likely to worry about body 
image issues, especially if they have visible scars, and their 
traditional roles as caregivers in civilian life can set them back when 
they return. In other words, they are the ones who have traditionally 
had the more nurturing role within our society, not the ones who need 
nurturing. And last, female veterans now number 1.7 million. The VA 
projects that by 2010, 10 percent of all veterans will be women, 
compared with 2 percent in 1997. And although the VA's budget for 
women's healthcare service has also grown, from $21 million in 2000 to 
an estimated $43.5 million in 2006, services are not evenly distributed 
throughout the VA system.
    While the VA has made vast improvements in treating women since 
1992, especially in treatment of PTSD and the other after effects of 
Military Sexual Trauma (MST) at VA Medical Centers; there are very few 
clinicians within the VA who are prepared to treat combat situation-
induced PTSD as opposed to MST-induced PTSD. Additionally, there are 
already cases where returning women service personnel have a 
combination of the two etiologies, making it extremely difficult for 
the average clinician to treat, no matter how skilled in treating 
either combat-incurred PTSD in men, or MST-induced PTSD in women.
    Because of the number of women who are now de facto combat veterans 
based upon the nature of the conflicts in Afghanistan and particularly 
Iraq, Vietnam Veterans of America (VVA) believes there is an immediate 
need for research on effective, evidence-based, integrated dual 
diagnosis treatment modalities for women veterans suffering from PTSD 
and related mental health disorders.
National Vietnam Veterans Longitudinal (Readjustment) Study
    No one really knows how many of our troops in Iraq and Afghanistan 
have been or will be affected by their wartime experiences. Despite the 
early intervention by psychological personnel, no one really knows how 
serious their emotional and mental problems will become, nor how 
chronic both the neuro-psychiatric wounds (particularly PTSD) will be 
or how these wounds will impact their physiological health. However, 
reports from researchers at Walter Reed have suggested that troops 
returning from service in Afghanistan and Iraq are suffering mental 
health problems at rates comparable to or higher than the levels seen 
in Vietnam War veterans.
    In fact, Vietnam Veterans of America (VVA) has no reason to believe 
that the rate of veterans of this war having their lives significantly 
disrupted at some point in their lifetime by PTSD will be any less than 
those estimated for Vietnam veterans by the National Vietnam Veterans 
Readjustment Study.
    Results from the original NVVRS demonstrated that some 15.2 percent 
of all male and 8.5 percent of all female Vietnam theater veterans were 
current PTSD cases (i.e., at some time during 6 months prior to 
interview). Rates for those exposed to high levels of war zone stress 
were dramatically higher (i.e., a four-fold difference for men and 
seven-fold difference for women) than rates for those with low-moderate 
stress exposure. Rates of lifetime prevalence of PTSD (i.e., at any 
time in the past, including the previous 6 months) were 30.9 percent 
among male and 26.9 among female Vietnam theater veterans. Comparisons 
of current and lifetime prevalence rates indicate that 49.2 percent of 
male and 31.6 percent of female theater veterans, who ever had PTSD, 
still had it at the time of their interview. Thus the NVVRS was a 
landmark investigation in which a national random sample of all Vietnam 
theater and era veterans, who served between August 1964 and May 1975, 
provided definitive information about the prevalence and etiology of 
PTSD and other mental health readjustment problems. The study over-
sampled African-Americans, Latinos, and Native Americans, as well as 
women, enabling conclusions to be drawn about each subset of the 
veterans' population.
    The NVVRS enabled the American public and medical community to 
become aware of the documented high rates of current and lifetime PTSD, 
and of the long-term consequences of high stress war zone combat 
exposure. Because of its unique scope, the NVVRS has had a large effect 
on VA policies, healthcare delivery and service planning. In addition, 
because the study clearly demonstrated high rates of PTSD and strong 
evidence for the persistence of this disease, it was generally accepted 
that the VA would pursue a follow-up or longitudinal study of the 
original participants in this seminal research project.
    Thus in 2000 the Congress, by means of Public Law 106-419, mandated 
the VA to contract for a subsequent report, using the exact same 
participants, to assess their psychosocial, psychiatric, physical, and 
general well-being of these individuals. It would enable it to become a 
longitudinal study of the mortality and morbidity of the participants, 
and draw conclusions as to the long-term effects of service in the 
military period, as well as about service in the Vietnam combat zone in 
particular. The law requires that VA use the previous report as the 
basis for a longitudinal study.
    Shortly after enactment of the law, in early 2001 the VA solicited 
proposals for non-VA contractual assistance to conduct a longitudinal 
study of the physical and mental health status of a population of 
Vietnam era veterans originally assessed in the NVVRS. It is apparent 
that a longitudinal follow-up to the NVVRS is necessary in order to 
meet the requirements of the law, and to adequately satisfy policy and 
scientific questions. However, not only has the VA failed to meet the 
letter of the law, there has been no effort to build upon the resources 
accumulated from this unique and comprehensive study of Vietnam 
veterans in a highly cost-efficient and scientifically compelling 
manner.
    Such a longitudinal study would provide clues about which VA 
healthcare services are effective and about ways to reach the veterans 
who receive inadequate services or do not seek them at all. And this 
has important consequences for America's current and future veterans.
    At that same hearing on Research & Development on June 7, 2006, the 
VA also said that they could not do the study because they could only 
find 300 of the original more than 2,500 persons in the statistically 
valid random sample chosen by the Gallup Organization at a public cost 
of more than $1 million in 1984 dollars. VVA suggest that a more 
intensive effort to locate these veterans be undertaken before the VA 
is allowed to scuttle a longitudinal study for this reason. If that 
were true (which strains credulity at best) that all but 300 are dead, 
then that would mean that 85% of that valid national sample has died in 
the past 25 years. VVA would suggest that this is unlikely.
    The VA has tried to claim they would be better off using the widely 
discredited and failed ``twins'' study database now controlled by the 
Institute of Medicine, that has no women at all, and not nearly enough 
African-Americans, Hispanics or Asian-Americans in the database to make 
valid conclusions about each of these important sub-groups in the 
Vietnam veteran population. Furthermore, the ``twins'' database is even 
so small that it is not a statistically valid random sample for 
anybody. One can speculate that the VA refuses to obey the law because 
they do not want a longitudinal study, or perhaps they do so because 
they do NOT want to have validated the results of what the NVVRS may 
demonstrate in regard to very high mortality and morbidity of Vietnam 
veterans, especially those most exposed to combat.
    It is now clear that the VA is ignoring the law and the Congress 
and plain refusing to do the study. It also seems clear that they 
intend to continue thumbing their nose at the Congress, and regarding 
laws they do not like as cute ideas put forth by the Congress that can 
be ignored anytime and in any way they choose.
    The VA has said in Congressional testimony that ``the Inspector 
General stopped the study,'' when in fact the IG has no line authority 
at all to do any such thing. The Under Secretary and the Secretary 
stopped the study. The only real criticism by the IG was for VHA 
failing to follow proper contract procedures or exercise proper 
oversight. Certainly the specious to the point of being just plain 
silly reasons that the Director of Medical Research and others from VA 
give convince no one that this is anything but politically motivated 
and ordered to try and minimize possible future costs to the VA.
    Because the VA has still not moved forward and contracted to finish 
the National Vietnam Veteran Readjustment Study (NVVRS), Vietnam 
Veterans of America (VVA) strongly urges that the VA follow the law, 
and contract to get this study completed as soon as possible, as it 
will provide both the medical community and America's veterans' 
community valuable insight into chronic PTSD and other socio-
psychological readjustment problems of combat theater veterans and when 
and how these problems will be likely to manifest themselves in the 
current generation. However, VVA frankly does not anticipate that VA 
will do the right thing, or even obey the law, unless they are 
compelled to so by means of the power of the purse.
    It has now come to our attention that VA, through their contract 
officer, is demanding of the Research Triangle Institute (RTI) to know 
the names and Social Security numbers of the participants in the 
original study, who had been assured anonymity. The previous, and some 
of the current VHA leadership not only has tried to besmirch the 
reputation of this respected research institution by citing things in a 
report by the Inspector General (IG) at VA that the report did not 
contain, but now they are threatening RTI with legal and or other 
punitive action, through the contract officer, if they don't violate 
privacy rights of the human participants in this study. This 
unconscionable effort to compromise the study population, to violate 
basic scientific principle of protection of human subjects, as well as 
violate the privacy rights of the individuals concerned, must be 
stopped by the Congress before the VA totally foils efforts to conduct 
a proper followup study ever being done on this population.
    Mr. Chairman, finally VVA urges this Subcommittee to compel VA to 
obey the law (Public Law 106-419) and conduct the long-delayed National 
Vietnam Veterans Longitudinal Study. VVA asks that you specifically 
request of VA to advise the Subcommittee on steps it will take to 
complete this study properly within 2 years, as a comprehensive 
mortality and morbidity study.
Traumatic Brain Injuries
    Medical experts say traumatic brain injuries (i.e., TBIs) are the 
``signature wound'' of the Iraq war, a by-product of improved body 
armor that allows troops to survive once-deadly attacks. Unfortunately, 
the armor does not fully protect against the blast effects of roadside 
explosive devices and suicide bombers. These injuries have become so 
common that both Army and the VA have set up special traumatic brain 
injury centers. For this both the VA and the Army are to be commended. 
Symptoms include slowed thinking, severe memory loss, and coordination 
and impulse control problems.
    TBI shares some symptoms with, but is markedly different than Post 
Traumatic Stress Disorder (PTSD), which is triggered by extreme anxiety 
and permanently resets the brain's fight-or-flight mechanism. 
Battlefield medics and medical supervisors often miss traumatic brain 
injuries, and many troops don't know the symptoms or won't discuss 
their problems for fear of being sent home with the stigma of mental 
illness. In this war, it is the blast waves themselves that cause the 
most damage and have proven the most problematical, the most disabling, 
and the most difficult to treat, primarily because they severely damage 
a soldier's nervous system.
    Primary injuries to the brain include concussions which can result 
in the loss of consciousness and what neurologists used to call ``coup-
contra-coup'' injuries, a term formerly restricted to central nervous 
injuries resulting from severe blows to the head.
    Indeed, soldiers walking away from blasts have later discovered 
that they suffer from memory loss, short attention spans, muddled 
reasoning, headaches, confusion, anxiety, depression, and irritability.
    In a 2004 article in The Journal of Brain Injury entitled 
``Depression, Cognition and Functional Correlates of Recovery Outcome 
after Traumatic Brain Injury,'' neurologists acknowledge that patients 
with mild to traumatic brain injuries are more affected by their 
emotional problems than by their residual physical disabilities. The 
article ends with an admonition that it is important to screen blast 
injury patients for depression and to conduct neuropsychological 
testing as soon as possible after the head injury in order to initiate 
treatment and ensure successful re-entry back into civilian life. Yet 
to date the Pentagon has been unwilling to fund a screening program for 
returning soldiers for mild brain injuries, arguing that the long-term 
effect of brain injuries needs more research. Researchers have found 
that up to 10% of the troops suffer from concussions during their 
tours, a figure that rises to 20% for those in combat units. One thing 
is clear: Subtle TBIs can and do result in PTSD like symptoms, even if 
actual PTSD due to combat stressors is not present.
    Certain TBI symptoms, such as seizures, can be treated with 
medication, but the most devastating effects of TBIs--depression, 
agitation and social withdrawal--are difficult to treat with 
medications, especially when loss of brain tissue occurs. In troops 
with documented TBIs, the loss of brain function is often compounded by 
other serious injuries that affect physical motor coordination and 
memory functions. These patients need a combination of psychological, 
psychiatric and physical rehabilitation treatment that is difficult to 
coordinate in a traditional hospital setting, even when it is properly 
diagnosed at an early date.
    Furthermore, as more and more troops return home with even mild 
brain damage, their families must contend not only with the shock of 
seeing the physical and psychological destruction to their loved ones, 
but also with how their own lives change dramatically. In addition, 
there are issues about the intensity and drains of vitally needed 
family support that will be hard to sustain, as well as significant 
issues regarding the complexity of the medical and other specialized 
needs that have to be addressed.
    A TBI to a 35-year-old with two children at home is a wound that 
also affects the future of the whole family. For the majority of head 
injuries there is the inability to concentrate, the mood swings, 
depression, anxiety, even the loss of a job. The economic and emotional 
instability of a family can be as terrifying and as real as any 
difficulty focusing or simply waking and crying in the middle of the 
night.
    But Vietnam Veterans of America's (VVA) real concern is that many 
significant closed head injuries are going undiagnosed, and we fear 
that subtle but real neurological and related psychological problems 
are missed in soldiers who are exposed to blasts, but who are not 
visibly injured enough to enter the medical evaluation chain. The 
limited medical research on blast injuries clearly shows that such 
injuries are notorious for their delayed onset.
    Vietnam Veterans of America (VVA) strongly urges this Subcommittee 
to push for more R&D funds, and push hard that part of these funds be 
used to foster enhanced research efforts to determine the relationship 
and long-term impacts of TBIs, especially so-called ``mild'' brain 
injuries, to the delayed onset of Post Traumatic Stress Disorder 
(PTSD).
Assured Funding for Veterans' Healthcare
    Once this Congress provides a budget that shores up VA medical 
services and facilities, it will need to assure that VA continues to be 
funded at a level that allows it to provide high-quality healthcare 
services to the veterans that need them. That is where enactment of 
assured funding will come in. Once enacted, an assured funding 
mechanism will ensure that, at a minimum, annual appropriations cover 
the cost of inflation and growth in the number of veterans using VA 
healthcare. It will allow VA administrators some predictability in both 
how much funding it will receive and when it will be received, 
resulting in higher quality and ultimately more cost-effective care for 
our veterans.
Accountability at VA
    So much of what VVA and the Congress on both sides of the aisle 
find wrong or disturbing at the VA revolves around the general and all-
pervasive issue of little or no accountability, or imprecise fixing of 
authority commensurate with accountability mechanisms that are 
meaningful (and vice versa) in all parts of the VA.
    Within the past year, VA has finally made significant progress in 
meeting the minimum goal of at least 3% of all contracts and 3% of all 
subcontracts being let to service-disabled veteran businessowners. 
Secretary Nicholson and Deputy Secretary Mansfield are to be commended 
on setting the pace for the Federal Government. It is instructive in 
this discussion, however, that the action directed by the Secretary to 
put achievement or substantial real progress toward meeting or 
exceeding the 3% minimum into the performance evaluation of each 
Director of the 21 Veterans Integrated Service Networks (VISNs) was a 
key element enabling VA to be the first large agency to reach the goal 
mandated by law. Some 85% of all VA procurement is through VHA, 
primarily through the VISNs is the key factor in this achievement.
    There is an expression that ``what is measured, matters.'' Hard-
working people with many responsibilities will understand the priority 
their leaders give certain policy by whether it is measured and has 
consequences. Putting procurement from service disabled veteran owned 
businesses in the performance evaluations means that those managers who 
ignore a requirement do not get an outstanding or superior rating, and 
hence no bonus. VVA, and now the VA in at least this one instance, have 
found that it is amazing how reasonable almost all people can be when 
you have their full attention.
    There is no excuse for the dissembling and lack of accountability 
in so much of what happens at the VA. It can be cleaned up and done 
right the first time, if there is the political will to hold people 
accountable for doing their job properly.
    Lastly, there is no excuse for allowing the continuation of the 
practice of VHA to ``lose'' tens of millions (sometimes hundreds of 
millions) of taxpayer dollars that are appropriated to VHA for specific 
purposes, whether that purpose be to restore organizational capacity to 
deliver mental health services, particularly for PTSD and other combat 
trauma wounds, or to conduct outreach to GWOT veterans as well as de-
mobilized National Guard and Reserves returnees from war zone 
deployments. There is a consistent pattern of VA, particularly VHA, to 
either really not know what happened to large sums of money given to 
them for specific reasons, or they are not telling the truth to the 
Congress and the public. In either case, it is unacceptable and cannot 
be tolerated any longer.
    In the proposed budget submittal, VVA struggled with accounting for 
the dollars footnoted in the President's submittal as ``Adjusted for 
IT.'' We could not find an accurate accounting. When we asked, it turns 
out that no one that we have spoken to, including VA officials, can 
fully explain at least $200 million-plus of this ``adjustment'' either. 
And this is before they get their hands on the dollars.
    VVA urges this Subcommittee, and your colleagues on Appropriations, 
to make this the year that this sloppy nonsense and dissembling is 
stopped once and for all. Accountability will only come about when 
Congress absolutely demands that these folks be fully accountable for 
performance, and for accounting for each and every taxpayer dollar.
    Thank you again, Mr. Chairman, for allowing Vietnam Veterans of 
America (VVA) to submit this statement for the record regarding the 
level of resources necessary for the veterans' healthcare so vitally 
needed by veterans of every generation. We hope these thoughts and 
recommendations prove to be of some use to you in the vital work of 
helping to ensure that the resources, and the accountability 
mechanisms, are in place to get the job for every generation of 
veterans that has earned the right to medical care by virtue of their 
service.
    VVA urges you to leave no veteran behind.
    We look forward to working with you and the distinguished Members 
of this Subcommittee to obtain an excellent budget for VA in FY08, and 
to ensure the next generation of veterans' well-being by enacting 
assured funding.
    VVA will be happy to answer any questions you and your colleagues 
may wish to tender to us in writing.

------------------------------------------------------------------------
 
------------------------------------------------------------------------
MEDICAL SERVICES (in millions $)
------------------------------------------------------------------------
FY 2007 Est. Baseline (Includes Projected Collections)           27612
------------------------------------------------------------------------
Medical Services Payroll
------------------------------------------------------------------------
Annualization costs for 136,000 FTE (FY 07 and FY 08)              959
------------------------------------------------------------------------
Address 8% Increase in Demand                                     1088
------------------------------------------------------------------------
Restore and Enhance LTC and MH Services                           1000
------------------------------------------------------------------------
Restore Adequate Staff to Patient Ratio to Address                2200
 Timeliness and Assure Quality of Care
------------------------------------------------------------------------
                                                                  5247
------------------------------------------------------------------------
Other Inflation and Increase in Demand
------------------------------------------------------------------------
Drugs                                                              543
------------------------------------------------------------------------
Other Med. Products                                                211
------------------------------------------------------------------------
Contracted Medical Services                                        488
------------------------------------------------------------------------
CPI (non medical)                                                   84
------------------------------------------------------------------------
                                                                  1326
------------------------------------------------------------------------
New Initiatives
------------------------------------------------------------------------
Restore Services for Agent Orange exposed Veterans                 300
------------------------------------------------------------------------
                                                                   300
------------------------------------------------------------------------
Subtotal, Medical Services                                        6873
------------------------------------------------------------------------

                               __________

[The following attachments are being retained in the Committee file: 
Watanabe, Kevin K., Kang, Han K., ``Military Service in Vietnam and the 
Risk of Death from Trauma and Selected Cancers,'' Elsevier Science Inc. 
(1995); Watanabe, Kevin K., Kang, Han K., ``Mortality Patterns among 
Vietnam Veterans, a 24-Year Retrospective Analysis,'' American College 
of Occupational and Environmental Medicine; ``Health Status of Army 
Chemical Corps Vietnam Veterans Who Sprayed Defoliant in Vietnam,'' 
American Journal of Industrial Medicine; Dalager, Nancy A., Kang, Han 
K., Thomas, Terry L., ``Cancer Mortality Patterns Among Women Who 
Served in the Military: The Vietnam Experience,'' American College of 
Occupational and Environmental Medicine.]
                 POST-HEARING QUESTIONS FOR THE RECORD
   Questions from Hon. Michael H. Michaud, Chairman, Subcommittee on
   Health, to Dr. Michael Kussman, Acting Under Secretary for Health,
                     Veterans Health Administration

                                     Committee on Veterans' Affairs
                                             Subcommittee on Health
                                                     Washington, DC
                                                      March 7, 2007

Michael J. Kussman, M.D., M.S., MACP
Acting Under Secretary for Health
U.S. Department of Veterans Affairs
810 Vermont Avenue, NW
Washington, DC 20420

Dear Dr. Kussman:

    In reference to our Subcommittee on Health hearing on the VA Fiscal 
Year 2008 budget held on February 14, 2007, I would appreciate it if 
you could answer the enclosed hearing questions by the close of 
business on March 30, 2007.
    In an effort to reduce printing costs, the Committee on Veterans' 
Affairs, in cooperation with the Joint Committee on Printing, is 
implementing some formatting changes for materials for all full and 
Subcommittee hearings. Therefore, we would appreciate it if you would 
provide your answers consecutively and single-spaced. In addition, 
please restate the question in its entirety before the answer.

            Sincerely,
                                                 MICHAEL H. MICHAUD
                                                           Chairman

Enclosure
                               __________

    Enrollment Fees--Last year you estimated that your enrollment fee 
proposal would cause 199,667 veterans to leave the VA. This year, your 
budget submission does not include an estimate as to the number of 
veterans you believe will leave the VA if your proposal is enacted and 
the VA begins charging an enrollment fee in FY 2009. In addition, in 
contrast to last year, you deem any revenue that would be collected 
from an enrollment fee to be ``mandatory'' revenue instead of 
``discretionary'' revenue and subtracted from total VA mandatory 
amounts.

    Question 1: How many veterans do you estimate would leave the 
system beginning in FY 2009 as a result of the enactment of your 
enrollment fee proposal?

    Response: The tiered enrollment fee for priority 7 and 8 enrollees 
would charge $250 for veterans with family incomes between $50,000 and 
$74,999; $500 for veterans with family incomes between $75,000 and 
$99,999; and $750 for veterans with family incomes equal to or greater 
than $100,000 beginning in fiscal year (FY) 2009. The Department of 
Veterans Affairs (VA) estimates that approximately 420,000 enrollees 
would choose not to pay the annual enrollment fee in FY 2009.

    Question 2: What policy decisions led you to decide in this budget 
submission to deem these fees ``mandatory'' revenues instead of 
``discretionary'' revenues?

    Response: In the past, VA was criticized for reducing its budget 
request prematurely before Congress had enacted the fee proposal. This 
year the VA's budget request did not prematurely assume approval of the 
fee proposal, but rather proposed the fee revenue become ``mandatory'' 
revenues only if and when the proposal was enacted by Congress.

    Question 3: Each year you submit budgets to Congress that include 
an enrollment fee proposal, and each year Congress rejects these. Why 
do you believe that this year will be any different?

    Response: The enrollment fee proposal allows VA to focus its 
resources on its core medical care mission of serving veterans 
returning from combat and those with military disabilities, lower 
incomes, and special needs. This year the budget request was not 
reduced before the proposal was enacted by Congress and if it is not 
enacted the budget will not require any adjustment.

    Pharmacy Copayment Increase--Your budget submission includes a 
legislative proposal that would increase the pharmaceutical copayment 
from $8 to $15 for certain veterans. In comparison to previous years 
when you have advocated increasing pharmaceutical copayments, the 
revenues received would be treated as ``mandatory'' dollars instead of 
``discretionary'' dollars.

    Question 4: How many veterans do you estimate would leave the VA in 
FY 2008 as a result of the enactment of your pharmacy copayment 
proposal?

    Response: VA does not expect any priority 7 and 8 veterans will 
choose to end their enrollment in VA healthcare system as a result of 
increasing the pharmacy co-pay from $8 to $15 in FY 2008. An increase 
in the pharmacy copayment will affect the services and medications 
priority 7 and 8 veterans seek from VA. We project this reduction in 
priority 7 and 8 services and medications will decrease FY 2008 
expenditures by $36 million.

    Question 5: What policy decisions led you to decide in this budget 
submission to deem these fees ``mandatory'' revenues instead of 
``discretionary'' revenues?

    Response: In the past, VA was criticized for reducing its budget 
request prematurely before Congress had enacted the co-pay proposal. 
This year the VA's budget request did not prematurely assume approval 
of the co-pay proposal, but rather proposed the co-pay revenue become 
``mandatory'' revenues only if and when the proposal was enacted by 
Congress.

    Question 6: Each year you submit budgets to Congress that include 
an increased pharmaceutical copayment proposal, and each year Congress 
rejects these. Why do you believe that this year will be any different?

    Response: This year the budget request was not reduced before the 
proposal was enacted by Congress and if it is not enacted the budget 
will not require any adjustment.

    Workload--The VA's FY 2008 budget submission estimates that in 2008 
the VA will see 5.3 million veterans. Your numbers seem to indicate 
that you plan on 5.2 million veterans in 2007 and 2006. Out of the 
125,000 new priority 1-6 veterans you estimate for in 2008, 54,000 will 
be veterans returning from Iraq and Afghanistan.

    Question 7: Given the VA's difficulties in estimating workload in 
the past, how confident are you that your estimate of 5.3 million 
veterans for FY 2008 is accurate? Failing enactment of some of your 
legislative proposals, should we estimate a larger number of veterans 
seeking care?

    Response: VA uses an actuarial model to forecast patient demand and 
associated resources needs. Actuarial modeling is the most rational way 
to project the resource needs of a healthcare system like the Veterans 
Health Administration. The estimates in the 2008 President's submission 
represent the best possible estimates based on the information 
available at that time. Failure to enact the legislative proposals will 
have no effect on the forecasted workload estimates in the 2008 
President's submission.
    VA continues to have confidence in the estimates that were 
developed for the FY 2008 budget submission. It should be noted that 
the number of 125,000 new priority 1-6 in the question represents the 
net change between the current estimate for FY 2007 and the FY 2008 
estimate. There is significant mortality in the priority 1-6 enrolled 
population. VA expects to enroll 312,000 new priority 1-6 enrollees in 
FY 2008. The 125,000 figure is the net increase after accounting for 
current enrollee mortality.

    Question 8: Given the VA's difficulties in estimating the demand 
for services from veterans returning from Iraq and Afghanistan, how 
confident are you that the VA will see only 54,000 new returning 
veterans in FY 2008? How in fact have you estimated this number, and 
does this estimate reflect recent events in the Middle East?

    Response: The 54,000 increase in the number of Operation Enduring 
Freedom/Operation Iraqi Freedom (OEF/OIF) veterans expected to be 
treated by VA in FY 2008 represents the net increase. This figure does 
not mean that only 54,000 new returning veterans will be treated. As 
with any healthcare plan, VA recognizes that not all beneficiaries will 
seek care every year. For example, of the 48,000 new OEF/OIF enrollees 
who were patients in FY 2005, only 69 percent returned to seek care in 
FY 2006.
    VA's estimate represents the best possible estimates based on the 
information available at that time. VA's ability to project enrollment 
and use for OEF/OIF veterans is limited by the data available for input 
into the model. VA's only source of data specifically related to OEF/
OIF veterans is a list of separating OEF/OIF servicemembers provided by 
Department of Defense (000). This data enables VA to identify those 
that have enrolled, whether they enrolled before or after deployment, 
determine their diagnoses, and identify their healthcare use patterns. 
VA will continually incorporate updates to the roster into the model.

    ``Efficiencies''--In your FY 2007 budget submission, you estimated 
a base level of ``efficiencies'' of $884 million for FY 2006, and 
estimated additional ``efficiencies'' of $197 million ($107 million in 
clinical efficiencies and $90 million in pharmaceutical efficiencies) 
for a total level of ``efficiencies'' of $1.1 billion. The GAO last 
year found that you were unable to document previous claims of 
``efficiencies.'' In this year's budget submission you claim clinical 
and pharmaceutical ``cost avoidance,'' which seems to me to be 
``efficiencies'' without being called ``efficiencies.'' Furthermore, 
you fail to provide any specific dollar amounts attributable to 
clinical and pharmacy ``cost avoidance.''

    Question 9: Did you achieve $197 million in ``efficiencies'' in FY 
2007 for a tota/level of $1.1 billion?

    Response: The FY 2008 budget submission included revised pharmacy 
and clinical efficiencies for both FY 2007 and FY 2008. The increased 
efficiencies in FY 2007 is shown below in four separate categories ($ 
in Millions):

 
                                                                FY 2007
 
Pharmacy Cost Efficiencies                                     $150.213
Inpatient Clinical Efficiencies                                $181.332
Outpatient Clinical Efficiencies                               $ 26.425
Pharmacy Clinical Efficiencies                                 $ 15.584
                                                             -----------
  Total New Efficiencies                                       $373.554
 

    Question 10: Can you document these ``efficiencies''?

    Response: The first two categories (pharmacy cost and inpatient 
clinical efficiencies) can be measured and can be reported after the 
completion of each fiscal year. The pharmacy cost efficiencies reflect 
VA's expected inflationary trend for pharmaceuticals is expected to be 
lower than the expected private sector trend. The inpatient clinical 
efficiencies reflect a reduction in potentially avoidable inpatient 
days. VA will be able to document and report on these efficiencies 
after the close of each of the respective years. VA cannot measure the 
achievement of the outpatient and pharmacy clinical efficiencies for 
two reasons. One, the relative size of the expected improvement makes 
them difficult to measure with any credibility. Two, we cannot 
determine whether changes in levels of service use are due to 
improvements in providing the appropriate level of care or because 
enrollees chose to receive that care from their other healthcare 
providers. However, we incorporated these assumptions in the budgets 
after careful consideration of the Veterans Health Administration's 
(VHA) current management practices and the expected impact of 
initiatives to improve clinical efficiency, such as advanced clinical 
access, and believe that they are achievable.

    Question 11: What are the estimates as to ``efficiencies'' or 
``cost avoidance'' for FY2008?

    Response: The FY 2008 budget submission included revised pharmacy 
and clinical efficiencies for both FY 2007 and FY 2008. The increased 
efficiencies in FY 2008 is shown below in four separate categories ($ 
in Millions):

 
                                                                FY 2008
 
Pharmacy Cost Efficiencies                                     $ 85.342
Inpatient Clinical Efficiencies                                $184.313
Outpatient Clinical Efficiencies                               $ 30.380
Pharmacy Clinical Efficiencies                                 $ 11.195
                                                             -----------
  Total New Efficiencies                                       $311.230
 

    OEF/OIF Veterans--Last year, the VA's budget submission estimated 
that it would treat 110,566 OEF/OIF veterans in 2006, and 109,191 in 
2007. Your budget submission this year estimates that you will have 
treated 155,272 in 2006, 209,308 in 2007, and 263,345 in 2008.

    Question 12: Given the VA's failure to properly estimate the demand 
for healthcare from OEF/OIF veterans in the past, can we be confident 
that your estimates are closer to the mark this year?

    Response: Over the past 2 years, VA has updated the model twice, 
using the most current baseline data available and has made several 
enhancements to the model methodology. Significant improvements to the 
actuarial model supporting the FY 2008 budget include enhanced veteran 
enrollment projections and the inclusion of a more detailed analysis of 
enrollee reliance on VA healthcare versus other providers.
    VA has added several new data sources, including the social 
security death index, which improved the projections by providing a 
more accurate count of enrolled veterans. In addition, the new 2000 
census long-form has provided more detailed information on the income 
of non-service-connected veterans and has enabled us to more accurately 
assign veterans into the income-based enrollment priorities.
    The methodology for projecting the needs of OEF/OIF veterans has 
also been enhanced based on the actual enrollment and use patterns of 
OEF/OIF veterans since FY 2002. These include specific assumptions 
regarding their enrollment, morbidity, and reliance on VA healthcare.
    VA has made every effort to account for the needs of OEF/OIF 
veterans within the actuarial model. However, there are several 
unknowns that will impact the number and type of services that VA will 
need to provide, including the duration of the conflict and when OEF/
OIF veterans are demobilized. Therefore, we have included additional 
investments for OEF/OIF in the FY 2008 budget to ensure that VA is able 
to care for all of the healthcare needs of our returning veterans. VA 
will continue to monitor this situation closely and make adjustments to 
the model projections and budget assumptions as needed.
    As VA continues to gain more longitudinal knowledge of the needs of 
OEF/OIF veterans, particularly through the VA/DoD post deployment 
healthcare reassessments (PDHRA), we will use this insight to further 
enhance our projections for this important population.

    Question 13: What new methodology is the VA using to properly 
estimate need and services for these returning veterans? How does the 
FY 2008 budget reflect this new methodology?

    Response: The methodology for projecting the needs of OEF/OIF 
veterans has been enhanced based on the actual enrollment and use 
patterns of OEF/OIF veterans since FY 2002. These include specific 
assumptions regarding their enrollment, morbidity, and reliance on VA 
healthcare.
    VA has made every effort to account for the needs of OEF/OIF 
veterans within the actuarial model. However, there are several 
unknowns that will impact the number and type of services that VA will 
need to provide, including the duration of the conflict and when OEF/
OIF veterans are demobilized. Therefore, VA has included additional 
investments for OEF/OIF in the FY 2008 budget to ensure that VA is able 
to care for all of the healthcare needs of our returning veterans. VA 
will continue to monitor this situation closely and make adjustments to 
the model projections and budget assumptions as needed.

    CBOCs/Facility Activations--The VA's FY 2008 budget submission 
request $21 million for facility activations, The VA has also been 
promising a number of new Community Based Outpatient Clinics over the 
last few years.

    Question 14: Of the $21 million requested, how much will go to 
activating new CBOCs, and where will those CBOCs be located?

    Response: Community based outpatient clinics (CBOC) are funded from 
within existing veterans integrated service network (VISN) budgets, so 
none of the $21 million for facility activations will go toward 
activation of new CBOCs. The $21 million for facility activations is 
used for operating expenses on completed construction projects, 
primarily for initial equipment and supplies to support the opening of 
new facilities, and as such are one time or non-recurring expenses.

    Question 15: How much have you budgeted in FY 2007 for activations, 
and of this amount, how much will for activating new CBOCs?

    Response: The 54 clinics listed below are currently approved and 
planned for activation in either third quarter FY 2007 or during FY 
2008.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                        Date of Approval
                               VISN                                          Facility Name            State   Planned Activation Date
--------------------------------------------------------------------------------------------------------------------------------------------------------
  18                                                                                     NW Tucson      AZ                  July 2007        March 2005
--------------------------------------------------------------------------------------------------------------------------------------------------------
  21                                                                                American Samoa      HI              July 21, 2007        March 2006
--------------------------------------------------------------------------------------------------------------------------------------------------------
  23                                                                                       Bemidji      MN              July 12, 2007        March 2006
--------------------------------------------------------------------------------------------------------------------------------------------------------
   6                                                                                       Norfolk      VA             August 1, 2007        March 2006
--------------------------------------------------------------------------------------------------------------------------------------------------------
  21                                                                                        Fallon      NV             August 6, 2007        March 2006
--------------------------------------------------------------------------------------------------------------------------------------------------------
   7                                                                                   Stockbridge      GA             September 2007        April 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
  22                                                                           South Orange County        CA           September 2007        March 2006
--------------------------------------------------------------------------------------------------------------------------------------------------------
  19                                                                                       Cutbank      MT               October 2007        April 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
   4                                                                                         Dover      DE              December 2007        March 2006
--------------------------------------------------------------------------------------------------------------------------------------------------------
   7                                                                                         Aiken       SC             December 2007        April 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
   7                                                                                  Childersburg      AL              December 2007        April 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
   8                                                                                 Camden County      GA              December 2007        April 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
   9                                                                     Morristown/Hamblen County      TN              December 2007         June 2006
--------------------------------------------------------------------------------------------------------------------------------------------------------
  15                                                                                Daviess County      KY              December 2007        April 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
   8                                                                                Jackson County      FL               January 2008        April 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
  19                                                                                              LewistMTn              January 2008        April 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
  15                                                                                Jefferson City      MO              February 2008        April 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
   9                                                                           Perry County/Hazard      KY                 March 2008        March 2006
--------------------------------------------------------------------------------------------------------------------------------------------------------
  20                                                               Bellingham Area (Whatcom County)/
                                                                                     NW Washington
                                                                                   (Skagit County)      WA                 March 2008      January 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
  16                                                                                       Branson      MO     Second quarter FY 2008        April 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
  16                                                                                     Eglin AFB      FL     Second quarter FY 2008        March 2006
--------------------------------------------------------------------------------------------------------------------------------------------------------
  16                                                                                    Pine Bluff      AR     Second quarter FY 2008        April 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
  23                                                                                       Carroll      IA     Second quarter FY 2008        April 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
  23                                                                                  Cedar Rapids      IA     Second quarter FY 2008        April 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
  23                                                                                      Holdrege      NE     Second quarter FY 2008        March 2006
--------------------------------------------------------------------------------------------------------------------------------------------------------
  23                                                                                  Marshalltown      IA     Second quarter FY 2008        April 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
  23                                                                                     Watertown      SD     Second quarter FY 2008        April 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
   4                                                                       Morgantown (Monongalia)      WV     Second quarter FY 2008        April 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
   8                                                                                 Putnam County      FL                 April 2008        April 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
   9                                                                                Madison County      TN                 April 2008        April 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
  15                                                                                    Hutchinson      KS                 April 2008        April 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
  11                                                                                Elkhart County      IN                   May 2008        April 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
  18                                                                                     SE Tucson      AZ                   May 2008        March 2005
--------------------------------------------------------------------------------------------------------------------------------------------------------
   5                                                                     South Prince George City/
                                                                                       Andrews AFB      MD                  June 2008        April 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
   9                                                                       Hawkins/Sullivan County      TN                  June 2008        April 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
  11                                                                                 Alpena County      MI                  June 2008        April 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
  11                                                                                  Clare County      MI                  June 2008        April 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
  18                                                                                   Thunderbird      AZ                  June 2008         June 2003
--------------------------------------------------------------------------------------------------------------------------------------------------------
   7                                                                                   Spartanburg       SC                 July 2008        April 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
  15                                                                                   Knox County      IN                  July 2008        April 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
   6                                                                               Charlottesville      VA                August 2008        April 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
   6                                                                                      Franklin       NC               August 2008        March 2006
--------------------------------------------------------------------------------------------------------------------------------------------------------
   6                                                                                       Hickory       NC               August 2008        March 2006
--------------------------------------------------------------------------------------------------------------------------------------------------------
   6                                                                                              LynchbVAg               August 2008        March 2006
--------------------------------------------------------------------------------------------------------------------------------------------------------
  20                                                                                    Metro West      OR                Summer 2008     December 2002
--------------------------------------------------------------------------------------------------------------------------------------------------------
   9                                                                                         Berea      KY             September 2008        April 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
   9                                                                                Grayson County      KY             September 2008        April 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
  19                                                                             West Valley Salt Lake  UT             September 2008        April 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
  10                                                                                         Parma      OH     Fourth quarter FY 2008        April 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
  20                                                                                   North Idaho      ID     Fourth quarter FY 2008        April 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
  23                                                                                    Shenandoah      IA     Fourth quarter FY 2008        April 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
  23                                                                                        Wagner      SD     Fourth quarter FY 2008        April 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
  23                                                                                      Bellevue      NE     Fourth quarter FY 2008        April 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
  18                                                                                   Globe/Miami      AZ              December 2008        March 2006
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Priority 8 Veterans--As you are aware, in January, 2003, the 
Administration stopped the enrollment of new Priority 8 veterans. We 
understand that the VA estimates that if this ban on enrollment was 
rescinded, 1.6 million Priority 8 veterans would seek care from the VA 
at a cost of $1.7 billion for FY 2008, and $33 billion over the course 
of 10 years. The Independent Budget has provided a radically lower cost 
estimate. The Independent Budget applies a utilization rate of 20 
percent for a total cost of $1.1 billion. The Independent Budget then 
takes an average amount received in collections from Priority 8 
veterans and subtracts this amount to come up with a total amount of 
$366 million.

    Question 16: Do you believe that your estimate, or the Independent 
Budget's estimate, is more accurate as it relates to lifting the 
enrollment ban on Priority 8 veterans?

    Response: VHA has several advantages in assessing the budgetary 
impact of opening enrollment to priority 8. First, VHA has developed an 
actuarial model for use in projecting veteran enrollment and use of 
healthcare services. It also has access to vast amounts of detailed 
information to support the development of assumptions about the impact 
of policy changes. These data include: insurance, health status, and 
use of healthcare service from the annual VHA survey of enrollees; 
income data from the 2000 census long form; data on veterans' 
enrollment history and their historical use of VA healthcare services; 
and enrollees' use of healthcare services paid for by Medicare.
    In addition, the actuarial model allows VHA to assess the impact of 
opening priority 8 enrollment at a very detailed level. For example, we 
use 6,072 distinct monthly enrollment rates, ranging from 0.02 percent 
to 4.20 percent, to project enrollment in priority 8. The rates are 
based on historical priority 8 veteran enrollment patterns and are 
developed separately for service-connected and non-service-connected 
veterans in three age bands and 506 geographic areas (counties or 
adjacent rural counties). The model then projects the expected use of 
55 different healthcare services for these new enrollees based on their 
age, morbidity, and expected reliance on VA healthcare versus other 
healthcare providers.
    These detailed projections are then aggregated to provide a 
national estimate of the impact of opening priority 8 enrollment. At 
the aggregate national level, we expect that approximately 4 percent of 
the non-enrolled priority 8 veteran population would enroll each year 
if enrollment was reopened. In addition to the veterans expected to 
enroll in FY 2008, the projections assume that approximately 1.6 
million priority 8 veterans who would have enrolled in 2006 and 2007 if 
enrollment had not been suspended will enroll when enrollment is 
reopened. We believe this is a realistic assumption due to the 
publicity that will be generated as Congress and the veteran service 
organizations communicate the policy change to their constituents.
    Again, aggregated at the national level, we expect that about 55 
percent of the 1.6 million new priority 8 enrollees in FY 2008 will be 
patients in FY 2008. Based on their expected use of VA healthcare 
services, we project their healthcare to cost to be $2,683 on average. 
We expect to collect, on average, $685 from each new priority 8 patient 
and his/her insurer, or 26 percent of the cost of their healthcare 
based on historical collection rates.

    Question 17: What particular elements of the Independent Budget's 
estimate do you disagree with?

    Response: Aggregated at the national level, VA expects that about 
55 percent of the 1.6 million new priority 8 enrollees in FY 2008 will 
be patients in FY 2008. Based on their expected use of VA healthcare 
services, we project their healthcare to cost to be $2,683 on average. 
We expect to collect, on average, $685 from each new priority 8 patient 
and his/her insurer, or 26 percent of the cost of their healthcare 
based on historical collection rates.

    Homeless Veterans--Over the course of the year VA estimates that 
400,000 veterans will experience homelessness at some time. Through an 
array of programs, VA assists 25 percent of that number and the 
community based organizations serve 50,000. The FY 2008 budget reflects 
$107 million in obligations and 2 FTE for the Grant and Per Diem 
Program and Special Needs Grants. Last year Public Law 109-461 
authorized $130 million.

    Question 18: Please explain why you did not ask for more money for 
these programs?

    Response: VA does not estimate there are 400,000 homeless veterans 
in the course of a year. VA does a point-in-time estimate. Our latest 
estimate was 195,000 homeless veterans. Congress noted again last year 
that the Department's primary mission is to provide service to homeless 
veterans who are chronically homeless. Therefore the Department's focus 
is to provide healthcare and other supportive services to chronically 
homeless veterans. VA provides a comprehensive array of services, 
including the grant programs with the goal of ending homelessness for 
chronically homeless veterans.
    We provide healthcare services to more than 100,000 homeless 
veterans each year. We are pleased to serve all homeless veterans 
although statistically there are far less than 100,000 chronically 
homeless veterans.
    The two full time employees (FTE) identified are new staff to work 
within the program office. During this fiscal year an additional 40 FTE 
have been added to work liaisons with community service providers. In 
addition, during the current fiscal year, we have or will add between 
1,500-2,200 new transitional housing beds; double special needs funding 
to $12 million and adding new technical assistance grants. We expect to 
expend $107 million this year.
    We are adequately funded to provide service to all existing 
providers and to provide expanded services appropriate to the long-term 
goal of ending chronic homelessness.

    Question 19: Last Year, in its report, the GAO reported an 
estimated 9,600 bed shortfall in the number of beds available to 
veterans seeking to escape homelessness. How does the VA's budget 
project this need?

    Response: As you noted, the government Accountability Office (GAO) 
reported on the number of community transitional housing beds estimated 
to meet community demands. We have carefully reviewed this and are 
taking appropriate action. We have already awarded funding to create 
1,800 new transitional housing beds and have a current notice of 
funding availability (NOFA) that is expected to add 1,000-1,400 new 
beds. Since the estimate of 9,600 beds is an estimate of community 
future need and we are increasing the number of beds by more than 3,000 
or more this year we believe we have responded appropriately with the 
transitional funding covered from the Grant and Per Diem (GPO) Program.

    Question 20: Do you plan to increase the number of beds available 
for homeless veterans?

    Response: Yes. Our funding is appropriate to increasing the number 
of quality beds with strong service provisions for homeless veterans. 
We are adding additional beds under the GDP Program, opening new 
domiciliary care beds and new contract care for those homeless veterans 
with serious mental illness.

    Long-Term Care--Your FY 2008 budget request for long-term care 
further reduces the Average Daily Census (ADC) level to 11,000 for 
nursing home care. The Veterans Millennium Health Care and Benefits Act 
(P.L. 106-117), which was enacted in 1999 requires the VA to maintain 
an ADC 13,391. With the veterans' population demographically growing 
older, I would imagine that there is quite a lot of demand for nursing 
home care.

    Question 21: When do you plan to submit a budget request for long-
term care that meets your statutory obligations for nursing home care?

    Response: P.L. 106-117 (the Millennium Act) states that ``The 
Secretary shall provide nursing home care . . . (1) to any veteran in 
need of such care for a service-connected disability, and (2) to any 
veteran who is in need of such care and who has a service-connected 
disability rated at 70 percent or more.'' To the best of our knowledge, 
VA is providing nursing home care to all such veterans who have sought 
to receive it from VA. The VA long-term care demand model estimates 
that there are approximately 9,300 such veterans during the current 
fiscal year. Therefore, the FY 2008 budget request is more than 
sufficient to provide nursing home care for those veterans for whom 
such care is required by the Millennium Act. Of note, the total average 
daily census in institutional long-term care programs supported by VA 
(including VA, State, and community nursing homes and VA and State 
domiciliaries) was 42,879 in FY 1998 and 42,620 in FY 2006; 
expenditures increased from $2.031 billion in FY 1998 to 3.539 billion 
in FY 2006.

    Question 22: How much more long-term care funding would be required 
to meet the VA's statutory mandate to maintain an ADC of 13,391?

    Response: The cost to increase VA nursing home average daily census 
(ADC) from the demand-based budgeted level of 11,000 to the arbitrary 
level of 13,391 would be approximately $492 million.

    Question 23: If you were at the mandated level of 13,391, could you 
fill the 2,391 more beds with veterans needing that type of care?

    Response: The VA long-term care demand model estimates that there 
are approximately 9,300 veterans during the current fiscal year for 
whom nursing home care is required by the Millennium Act. Therefore VA 
could not fill an additional 2,391 beds. with such veterans.

    Activation Fees--In your Summary of Program Request Medical 
Services FY 2008 Estimate there is an obligation of $18,802 million for 
activations. In your Summary of Program Request Medical Facilities FY 
2008 Estimate there is an obligation of $2,564 million for activations.

    Question 24: Please explain what the activation obligations are 
for.

    Response: Activation obligations are in the medical facility and 
service fund appropriations for one-time initial requirements. Facility 
activations provide operating resources, primarily for initial 
equipment and supplies that are non-recurring to activate completed 
construction projects. It includes obligations of projects completed in 
the prior year, some funding for projects to be completed in succeeding 
years and operational resources for new leased space.

                                 
      Questions from Hon. Jeff Miller, Ranking Republican Member,
            Subcommittee on Health, to Dr. Michael Kussman,
   Acting Under Secretary for Health, Veterans Health Administration

                                     Committee on Veterans' Affairs
                                             Subcommittee on Health
                                                     Washington, DC
                                                  February 28, 2007

Michael J. Kussman, M.D., M.S., MACP
Acting Under Secretary for Health
U.S. Department of Veterans Affairs
810 Vermont Avenue, NW
Washington, DC 20420

Dear Dr. Kussman:

    Thank you for your testimony at the Wednesday, February 14, 2007, 
the Subcommittee on Health hearing on the President's FY 2008 Budget 
for the Veterans Health Administration (VHA). As a followup to the 
hearing, I am requesting the following questions be answered in written 
form for the record:

    1.  A November 2006 GAO report on VA's spending plan for Mental 
Health showed that VA had not adequately allocated funding to the 
facilities for mental health initiatives. (a) What is VA doing to track 
the funds allocated for mental health? (b) How does VA plan to ensure 
that each facility is allocated an amount to fully fill the mental 
health needs of its veteran population? (c) What is VA doing to improve 
its ability to estimate the number of servicemembers who may access VA 
PTSD services?
    2.  The VA budget includes $115 million for readjustment counseling 
and VA plans to add an additional 2 Vet Centers for a total of 209 Vet 
Centers in FY 2008. Has VA established performance measures to 
determine veteran and family member utilization and satisfaction with 
the counseling they receive through Vet Centers?
    3.  As cochair of the VA/DoD Health Executive Committee, what 
initiatives are being considered for enhancing mental health services 
and coordinating these services within ``Seamless Transition''?
    4.  Prior to 1989, NIH funds gave VA investigators a 15% indirect 
administrative add-on to all VA grants. NIH has since discontinued 
paying indirect costs to VA and other federal agencies. NIH, however 
continues to pay indirect costs to private and public universities and 
even to foreign institutions that receive its grants. What impact does 
NIH's refusal to pay indirect costs have on carrying out VA research?
    5.  VA is currently undertaking a survey to determine the financial 
needs of the physical and operational infrastructure and equipment used 
for conducting research. When can we expect VA to begin implementing an 
asset management plan based on the data collected from the survey?
    6.  Regarding construction, (a) how many major construction 
projects are currently underway? (b) How many of these projects are 
behind schedule? (c) What are the causes for these delays?
    7.  In 2006, VA was given supplemental funds to cover unexpected 
dental care costs. How has VA spent these funds? Did VA's actuarial 
model for the FY 2008 budget request take into consideration dental 
care services?
    8.  The budget shortfall VHA faced in both FY 2005 and 2006 was in 
part due to inaccurate long-term care costs. Has VA integrated a long-
term care model into the development of the FY 2008 budget request?
    9.  The September 2006 GAO report recommended that VA improve 
reporting its budget execution to Congress. In order to improve 
reporting to Congress, VA needs to ensure accurate reporting by 
facilities and VISNs on budget execution. (a) How does VA maintain 
facility and VISN accountability on budget execution? (b) What can be 
done to improve accountability on budget execution?

    Additionally, I would request you respond to Congressman Brown's 
questions for the record. Your attention to these questions is much 
appreciated, and I request that they be returned to the Subcommittee on 
Health no later than close of business, 5:00 p.m., Wednesday, March 14, 
2007. If you or your staff have any questions, please call the 
Republican Staff Director for the Subcommittee on Health, Dolores Dunn 
at 202-225-3527.

            Respectfully
                                                        Jeff Miller
                                          Ranking Republican Member
                                             Subcommittee on Health

Attachment

                               __________

    Question 1: A November 2006 GAO report on VA's spending plan for 
Mental Health showed that VA had not adequately allocated funding to 
the facilities for mental health initiatives.

    Question 1(a): What is VA doing to track the funds allocated for 
mental health?

    Response: The GAO report that addressed the use of funds for the 
Mental Health Initiative (comprising about $200 million or 8.3 percent 
of the $2.4 billion spent in fiscal 2006 for mental health services) 
addressed delays in enhancing services, not limitations in services 
delivered. The delays were related to factors such as the time required 
to formulate new programs, to allow sites to be ready for their 
implementation, and to hire new staff.
    Actions taken this year to ensure efficient use of funds from the 
Mental Health Initiative include accelerated notices of award to the 
field and increased tracking of positions filled and workload 
generated. There are also plans to reinvest any funding not executed as 
a result of unavoidable delays in hiring and use these funds to address 
other mental healthcare initiatives identified by the Veterans 
Integrated Service Networks (VISN) that could be met with non-recurring 
funds.

    Question 1(b): How does VA plan to ensure that each facility is 
allocated an amount to fully fill the mental health needs of its 
veteran population?

    Response: The total projected costs for mental health services are 
$2.805 billion for fiscal year (FY) 2007 and $2.960 billion for FY 
2008. Mental Health funding for each facility comes from two separate 
funding streams. Most of the funding comes through the VISN through the 
Veterans Equitable Resource Allocation (VERA). VERA is based on complex 
models that include both past services provided, associated costs, and 
actuarial projections. The other component, the Mental Health 
Initiative to expand and enhance mental healthcare, is funded for $306 
million in FY 2007, and for $360 million in FY 2008. The adequacy of 
these funds are tracked through quality measures, by analyses conducted 
by the three program evaluation centers associated with the Office of 
Mental Health Services, and through each VISN's evaluations of their 
own needs.

    Question 1(c): What is VA doing to improve its ability to estimate 
the number of servicemembers who may access VA PTSD services?

    Response: The Veterans Health Administration (VHA) is working to 
enhance its ability to project the number of servicemembers with post 
traumatic stress disorder (PTSD) through two mechanisms. In an ongoing 
collaboration, the Under Secretary for Health's Special Committee on 
PTSD is working with VHA's Office of the Assistant Deputy Under 
Secretary for Health for Policy and Planning to extend current 
actuarial approaches to model needs within this single diagnosis. In a 
separate strategy, trends over time for the total number of veterans 
treated for PTSD from each service era are being closely monitored.
    Projections of the demand for PTSD services are complex, and 
subject to rates of deployment, redeployment and separation of 
servicemembers. The most straightforward way to project demand is to 
monitor ongoing trends in diagnoses and mental health service use among 
enrollees. This is being done through quarterly reports from the VA 
epidemiology services. Another approach is to work with the Department 
of Defense (000) to track responses from the Post-Deployment Health 
Assessment completed at the time that service men and women return from 
Operation Enduring Freedom/Operation Iraqi Freedom (OEF/OIF), and the 
Post-Deployment Health Reassessment completed 3-6 months later.
    Funding for the Mental Health Initiative has been allocated to 
expand PTSD specialty care programs. The funds are also being used to 
implement programs to disseminate time-limited evidence-based 
psychotherapies for PTSD throughout VHA.

    Question 2: The VA budget includes $115 million for readjustment 
counseling and VA plans to add an additional 2 Vet Centers for a total 
of 209 Vet Centers in FY 2008. Has VA established performance measures 
to determine veteran and family members utilization and satisfaction 
with the counseling they receive through Vet Centers?

    Response: VHA has established the following performance measures:

      Market penetration of eligible veterans being provided 
Vet Center services. The ``Market'' is defined as veteran population.
      Market penetration of OEF/OIF veterans being provided Vet 
Center services. With the ``Market'' defined as the number of separated 
OEF/OIF veterans as reported by DoD Defense Manpower Data Center (DMDC) 
roster.
      Veteran satisfaction is measured annually with an 
established standard of 98 percent of veterans reporting satisfaction 
and that they would recommend the Vet Center to a fellow veteran. In FY 
2006, actual veterans satisfaction was 99.7 percent.
      Quality of Life measures from the Diagnostic and 
Statistical Manual of Mental Disorders-IV (DSM-IV) such as Global 
Assessment of Functioning (GAF) scores, pre- and post-service 
provision.

    Question 3: As co-chair of the VA/DoD Health Executive Committee, 
what initiatives are being considered for enhancing mental health 
services and coordinating these services within ``Seamless 
Transition''?

    Response: The Department of Veterans Affairs (VA)/DoD Health 
Executive Committee (HEC) Mental Health Work Group has identified the 
following initiatives for 2007-2009:

      Plan and implement shared training programs to increase 
the use of evidence-based psychotherapy, e.g. cognitive processing 
therapy and prolonged exposure therapy, and pharmacotherapy approaches 
for primary care providers in both Departments for the treatment of 
PTSD.
      VA will collaborate with the National Guard and Reserve, 
and State and regional coalitions to address the mental health and 
readjustment needs of OEF/OIF veterans to develop improved patient care 
methods and strategies for Guard and Reserve members who are released 
from active duty.
      VA outreach staff will work with DoD military treatment 
facility staff to identify mental health conditions for poly trauma 
patients and others with serious injuries and will coordinate the 
continuity of care for these patients.

    In addition to VA/DoD HEC Mental Health Work Group, VA's 
readjustment counseling centers (Vet Centers) provided the following 
services to OEF/OIF veterans:

      VA Vet Centers participate in the 000 sponsored Post 
Deployment Health Reassessment (PDHRA) screenings which are conducted 
90 to 180 days following the servicemember's return home. Vet Center 
and VHA medical facility staff are onsite at all PDHRA events, 
providing followup services for all veterans who screen positive for 
readjustment problems.
      The Vet Center program has taken a lead role in providing 
timely outreach and readjustment services to the new OEF/OIF veterans. 
Since 2003 through the first quarter of FY 2007, the Vet Centers have 
provided services to 165,153 OEF/OIF veterans. Of the total OEF/OIF 
veterans seen, 119,615 were provided outreach services at active 
military, National Guard, and Reserve demobilization sites and other 
community events featuring veterans and family members. The other 
45,538 veterans were provided comprehensive readjustment services in 
Vet Centers.

    Question 4: Prior to 1989, NIH funds gave VA investigators a 15% 
indirect administrative add-on to all VA grants. NIH has since 
discontinued paying indirect costs to VA and other federal agencies. 
NIH, however continues to pay indirect costs to private and public 
universities and even to foreign institutions that receive its grants. 
What impact does NIH's refusal to pay indirect costs have on carrying 
our VA research?

    Response: The Department of Health and Human Services, including 
the National Institute of Health (NIH), has determined that it may not 
pay facilities administrative (indirect) costs that directly support VA 
infrastructure and administrative operations. Because the research that 
NIH funds in VA facilities is of direct relevance to veterans' health, 
these grants help VA support its mission of caring for veterans. Since 
NIH grants do not provide funds that help to maintain VA facilities, 
routine maintenance and repair must be borne entirely by the VA budget.

    Question 5: VA is currently undertaking a survey to determine the 
financial needs of the physical and operational infrastructure and 
equipment used for conducting research. When can we expect VA to begin 
implementing an asset management plan based on the data collected from 
the survey?

    Response: VA's Office of Research and Development has established a 
VA research infrastructure evaluation and improvement project 
(Infrastructure Program). In early 2006, a detailed questionnaire 
regarding current research space allocation and condition was 
disseminated to all field sites to gather preliminary information. To 
better document and prioritize issues identified in that preliminary 
assessment, a comprehensive evaluation instrument designed to ensure a 
thorough and consistent system-wide review of research space was 
developed and tested at three pilot sites (June-August 2006). Survey 
methodology included a detailed physical examination of research 
structures and supporting systems. Reports included identification of 
deficiencies; the estimated cost for correcting the deficiencies, and 
estimated cost for replacing the structure. In analyzing its physical 
infrastructure, VA performed condition assessments of all of its 
medical facilities as part of the Capital Asset Realignment for 
Enhanced Services (CARES) study. VA plans to issue three reports 
describing the efforts undertaken in FY 2007, 2008, and 2009.

    Question 6: Regarding construction:

    Question 6(a): How many major construction projects are currently 
underway?

    Response: There are currently 41 projects underway in design and 
construction.

    Question 6(b): How many of these projects are behind schedule?

    Response: Of the 41 projects, 11 are behind schedule.

    Question 6(c): What are the causes for these delays?

    Response: A major cause for delay has been the impact of the 
volatile construction economy in the United States and the rapidly 
increasing pricing for labor and building materials. While many 
projects have been affected by this robust economy, five projects have 
had significant schedule delays as a result of bid pricing or estimates 
exceeding available funds. These include projects in Atlanta, GA; Des 
Moines, IA; Palo Alto, CA; San Antonio, TX; and Tampa, FL.
    Projects to construct new hospitals at Orlando, FL, and Denver, CO, 
have experienced delays associated with site selection. Sites at both 
locations have now been selected.
    In addition, four projects have been delayed by their own unique 
circumstances.

      Biloxi, MS--Restoration of Hospital--Start of design was 
initially delayed in the immediate post-Katrina period because the VA 
medical center needed to address more urgent matters. The design 
architect was selected and is under contract to prepare a master plan 
for the facility. More recently, VA and the U.S. Air Force have been 
exploring the potential for co-location of services. Schematic design 
is scheduled to start in April 2007.
      Fayetteville, AR--Clinical Addition--The master plan and 
space program were revised and completed in November 2006. The 
architect/engineering (AE) contract is being negotiated.
      San Juan, PR--Seismic Corrections Building 1--Design is 
in the second phase of schematics. Award of a construction document 
contract is anticipated by July 2007.
      Syracuse, NY--Spinal Cord Injury Center (SCI)--After 
approval, it became apparent that the parking shortage at the site 
would be significantly exacerbated by this new construction. A parking 
component was added to the project as a first phase. Construction award 
of the parking garage expansion is scheduled for August 2007. Design 
efforts for both the garage expansion and SCI are ongoing. Additional 
funds have been requested in the FY 2008 budget request.

    Question 7: In 2006, VA was given supplemental funds to cover 
unexpected dental care costs. How has VA spent these funds? Did VA's 
actuarial model for the FY 2008 budget request take into consideration 
dental care services?

    Response: By the close of FY 2006, supplemental funds provided 
additional dental care to veterans in the following amounts and 
categories:

      $41.7 million for contract or fee basis dental care for 
all eligible veterans.
      $26.5 million to increase capacity to provide dental 
services in the form of equipment, supplies and minor remodeling.
      $10 million for contract or fee basis care of OEF/OIF 
veterans.
      $6.7 million for increase in dental staff.

    Use of the above supplemental funds has decreased the waiting list 
for eligible veterans waiting for dental care greater than 30 days by 
63 percent.
    Eligibility for dental care is different than medical care and VA 
is now exploring the feasibility of developing an actuarial model to 
project demand for dental services based on current eligibility 
criteria. Currently, VA's FY 2008 budget request includes the total 
funding needed for the Department to continue to provide timely, high 
quality dental care to veterans including one-time Class II benefits 
dental care to all newly discharged veterans.

    Question 8: The budget shortfall VHA faced in both FY 2005 and 2006 
was in part due to inaccurate long-term care costs. Has VA integrated a 
long-term care model into the development of the FY 2008 budget 
request?

    Response: Yes. VA has integrated the Long Term Care Planning Model 
into the development of the FY 2008 budget proposal. The current budget 
request will support continued expansion of access to VA's spectrum of 
non-institutional home and community-based long-term care services 
while sustaining capacity in VA's own nursing home care units and the 
community nursing home program and continuing to support modest growth 
in capacity in the State veterans home program.

    Question 9: The September 2006 GAG report recommended that VA 
improve reporting its budget execution to Congress. In order to improve 
reporting to Congress, VA needs to ensure accurate reporting by 
facilities and VISNs on budget execution.

    Question 9(a): How does VA maintain facility and VISN 
accountability on budget execution?

    Response: VHA has numerous methods to track accountability on 
budget execution which are listed below:

      Frequent communication with VISN chief financial officers 
(CFO) to review budgets and to evaluate spending targets.
      A Finance Committee which meets monthly as a subcommittee 
of the National Leadership Board and provides fiscal oversight of VHA 
organizational performance, and the formulation and execution of the 
budget process. The Committee a/so works to develop sound financial 
models and effective resource allocation methodologies that are aligned 
with the goals of VA.
      Within VHA, the CFO has bi-weekly conference calls with 
field CFO's where budget execution is discussed. This has proved to be 
an excellent venue for discussing barriers to staying within assigned 
budgets, and developing solutions to keep field facilities on budget.
      Monthly indicators are in place from both the Office of 
Finance and the Central Business office to track both financial and 
revenue processes.
      Monthly Performance Reviews, chaired by the Deputy 
Secretary, focus on financial and program performance. The Department's 
leadership discusses and makes decisions on performance, budget, and 
workload targets. Using financial metrics as the basis, each 
administration and staff office reports on progress in meeting 
established monthly and/or fiscal financial goals.

    Question 9(b): What can be done to improve accountability on budget 
execution?

    Response: There should be continual management focus on financial 
indicators and budget targets to ensure clean audits and eliminate any 
areas of internal control weaknesses. Resource management is a key 
component of network director and facility director performance plans. 
At the end of the 2007 rating period, facility directors and network 
directors will be asked to describe actions and accomplishments that 
reflect significant achievement in this area.

                                 
 Questions from Hon. Henry E. Brown, Jr., a Representative in Congress
       from the State of South Carolina, to Dr. Michael Kussman,
   Acting Under Secretary for Health, Veterans Health Administration

Charleston VAMC

    Question 1: Last week, Secretary Nicholson and I talked about the 
VA's views on the development of a joint-use facility in Charleston. I 
was frustrated during this exchange because the Secretary did not seem 
to be able to separate the advanced planning study as authorized by 
Congress late last year, and the complete construction of a facility. 
Is this normal practice within the VA, especially when Congress 
specifically gives authorization for a project in phases?

    Response: When Congress appropriates funding for a project the 
Department considers that to be directive and takes action to proceed. 
In the case of Charleston, although the project was included in the 
authorization bill, no funding has been provided. The major 
construction funding is appropriated by project.

    Question 2: Isn't it true that the VA budgets planning and 
construction dollars differently? In fact, isn't there a $40 million 
account within the budget specifically for advanced planning?

    Response: The FY 2008 budget request includes $40 million for 
advanced planning. These funds will be used for several purposes 
including the planning and design of priority projects planned for the 
FY 2009 budget, assisting VISNs in developing capital asset 
applications for projects to be proposed for the FY 2010 budget, 
updating VA standards, space criteria, construction specifications and 
other tools which support the capital improvement program and studies 
such as master plans and environmental compliance studies.

    Question 3: Didn't section 804 of Public Law 109-461 specifically 
require Congress to provide separate authorization for any joint-use 
facility construction at Charleston?

    Response: Section 804 of Public Law 109-461 specifically authorized 
the Secretary to enter into an agreement for planning and design of a 
co-located, joint-use medical facility in Charleston, South Carolina to 
replace the Ralph H. Johnson Department of Veterans Affairs Medical 
Center in Charleston, South Carolina in an amount not to exceed 
$36,800,000.

ALS

    Question 1: What resources are allocated by the VA for research and 
treatment of ALS, especially as it relates to our gulf war veterans? 
Where does ALS research fit into the VA's Designated Research Areas 
listing on page 10-20 of Volume 1 of FY08s Budget Justification?

    Response: In FY 2006 VA Office of Research and Development (ORO) 
devoted over $6.8 million to Amyotrophic Lateral Sclerosis (ALS) 
research, of which $5.6 million directly examines ALS, and over $1.2 
million is relevant to this debilitating disease. Of this total, over 
$3.6 million is considered part of VA's ongoing portfolio of gulf war 
related research. ALS research is included in the topic ``Central 
Nervous System (CNS) Injury and Associated Disorders'' listed on page 
10-20 of Volume 1 of FY 2008 Budget Justification.
    ORO is particularly excited about several ongoing and planned 
projects in this important area:

      National VA ALS Research Consortium: This is a 15-site 
clinical trial to determine the tolerability and efficacy of sodium 
phenylbutyrate (NaPS) as a new therapy for ALS.
      Arginase NO Synthase and Cell Death in ALS: The focus of 
this project is to further study a compound that has been shown to 
delay the onset of ALS symptoms in animal models of the disease.
      National Registry of Veterans with ALS: This registry is 
designed to identify veterans with ALS and to track their health 
status; collect Deoxyribonucleic acid (DNA) samples and clinical 
information; and provide a mechanism for VA to inform veterans with ALS 
about research studies for which they may be eligible to participate. 
The following website provides more details: http://www.va.gov/durham/
alsregistry.asp.
      Biomarkers Discovery in ALS: VA investigators recently 
identified three proteins that were significantly lower in 
concentration in the cerebrospinal fluid (CSF) from patients with ALS 
than in normal controls. The combination of these proteins correctly 
identified patients with ALS with 95 percent accuracy, 91 percent 
sensitivity, and 97 percent specificity from the controls. Independent 
validation studies confirmed the ability of the three CSF proteins to 
separate patients with ALS from other diseases. The current work is 
focused on creating new assays to detect these biomarkers that can be 
used in the routine clinical laboratory setting.
      Brain-Computer Interfaces (BCI) for Patients with ALS: 
ORO is in the advanced planning stages of a clinical demonstration 
project that will be done in collaboration with the Brain-Computer 
Interface Laboratory of the Wadsworth Center (New York State Department 
of Health) which has pioneered BCI technology that enables paralyzed 
people, including those locked-in by advanced ALS, to communicate. The 
goal of this project is to demonstrate the practicality of such systems 
and their impact on quality of life for both patients and caregivers.

    Question 2: I have recently learned of a number of cases in my 
district from veterans who have developed ALS where the VA has denied 
their claims because their service was not within the presumptive 
timeframe of August 2, 1990 through July 31, 1991. How many incidents 
like this have there been since the gulf war ended?

    Response: Compensation claims for ALS are granted if the veteran 
meets one of the following criteria: served in the Southwest Asia 
Theater of Operations from August 2, 1990 through July 31, 1991 and 
later developed ALS; developed ALS during service; or developed ALS not 
later than one year after service. Due to lack of medical evidence 
supporting a definitive diagnosis of ALS, VA denied 31 claims for 
service connection of ALS of veterans who served in the Southwest Asia 
Theater of Operations from August 2, 1990 through July 31, 1991. VA 
also denied 67 claims for service connection of ALS because the veteran 
did not serve in theater during the requisite timeframe, develop ALS in 
service, or develop ALS within one year after service. Of that number, 
64 veterans served on or after August 2, 1990, but were not deployed to 
the Southwest Asia Theater of Operations, and three veterans served in 
the Southwest Asia Theater of Operations after July 31,1991.

    Question 3: Why did the VA determine that special action is only 
provided for veterans claiming service-connected ALS during the Gulf 
War timeframe?

    Response: In 2001, VA led a joint epidemiologic study with DoD 
regarding ALS among gulf war veterans. This study provided preliminary 
evidence that active duty military personnel deployed to the Southwest 
Asia Theater of Operations between August 2, 1990 and July 31, 1991, 
were nearly twice as likely to develop ALS. The study involved nearly 
700,000 service members deployed to Southwest Asia and 1.8 million 
servicemembers who were not deployed to Southwest Asia. VA decided to 
take special action on claims for veterans who were deployed to the 
Southwest Asia Theater of Operations from August 2, 1990 to July 31, 
1991.
    In September 2006, the Institute of Medicine (10M) published a 
report, ``Gulf War & Health Volume 4: Health Effects of Serving in the 
gulf war,'' that found gulf war veterans might be at increased risk for 
ALS. VA is deferring any recommendations, policy options, or 
conclusions on ALS among veterans of the 1991 Gulf War pending review 
of a more recent 10M report, which reviewed the literature on possible 
increased risk of ALS among all servicemembers.

    Question 4: How many veterans have been diagnosed with service-
connected ALS? Can you break this down by conflict and/or theater of 
operations?

    Response: VA grants claims for service connection of ALS if the 
veteran meets one of the following criteria: served in the Southwest 
Asia Theater of Operations from August 2, 1990 through July 31, 1991 
and later developed ALS during service; or developed ALS not later than 
1 year after service.
    VA granted 55 claims of ALS from veterans who served in the 
Southwest Asia Theater of Operations from August 2, 1990 through July 
31,1991. VA also granted 98 claims of ALS in cases where the veteran 
developed ALS during service or within 1 year after service. Of that 
number, 14 veterans served in the Southwest Asia Theater of Operations 
after July 31, 1991, and 84 veterans served on or after August 2, 1990, 
but were not deployed to the Southwest Asia Theater of Operations.

General Budget Questions

    Question 1: Funding for ``other home-based care'' under the long-
term care account has increased from $25 million in FY06 to $95 million 
in the current budget request. What type of services are provided with 
these dollars? How many veterans have utilized services under this 
account over the past 5 years? Are the funding increases simply in 
response to increases in number of veterans utilizing the services?

    Response: Other home-based care consists of purchased skilled home 
care, home hospice and outpatient respite care. Since FY 2003 (earliest 
year that data is available) the number of patients receiving these 
non-institutional long-term care services, as measured by the average 
daily census increased from 2,600 to over 3,000 in FY 2006. In FY 2008 
the number of patients receiving all non-institutional long-term care 
services combined will increase to over 44,000. This represents a 19.1-
percent increase above the level VA expects to reach in FY 2007 and a 
50.3-percent rise over the FY 2006 average daily census. The funding 
increase in other home-based care is a component of the $4.6 billion 
for extended care services, 89 percent of which will be devoted to 
institutional long-term care and 11 percent to non-institutional care. 
By continuing to enhance veterans' access to non-institutional long-
term care, the Department can provide extended care services to 
veterans in a more clinically appropriate setting, closer to where they 
live, and in the comfort and familiar settings of their homes 
surrounded by their families.

                                  
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