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27–353 PDF 2006

S. HRG. 109–405

REBUILDING THE GULF COAST FOLLOWING

HURRICANE KATRINA

HEARING

BEFORE THE

COMMITTEE ON VETERANS’ AFFAIRS

UNITED STATES SENATE

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

NOVEMBER 10, 2005

Printed for the use of the Committee on Veterans’ Affairs

(

Available via the World Wide Web: http://www.access.gpo.gov/congress/senate

(II)

COMMITTEE ON VETERANS’ AFFAIRS

LARRY E. CRAIG, Idaho, Chairman

ARLEN SPECTER, Pennsylvania

KAY BAILEY HUTCHISON, Texas

LINDSEY O. GRAHAM, South Carolina

RICHARD BURR, North Carolina

JOHN ENSIGN, Nevada

JOHN THUNE, South Dakota

JOHNNY ISAKSON, Georgia

DANIEL K. AKAKA, Hawaii, Ranking Member

JOHN D. ROCKEFELLER IV, West Virginia

JAMES M. JEFFORDS, (I), Vermont

PATTY MURRAY, Washington

BARACK OBAMA, Illinois

KEN SALAZAR, Colorado

LUPE WISSEL, Majority Staff Director

D. NOELANI KALIPI, Minority Staff Director

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CONTENTS

NOVEMBER 10, 2005

SENATORS

Page

Craig, Hon. Larry E., U.S. Senator from Idaho .................................................... 1

Murray, Hon. Patty, U.S. Senator from Washington, prepared statement ........ 2

Cochran, Hon. Thad, U.S. Senator from Mississippi ............................................ 5

Prepared statement .......................................................................................... 6

Akaka, Hon. Daniel K., U.S. Senator from Hawaii .............................................. 6

Hutchison, Hon. Kay Bailey, U.S. Senator from Texas ........................................ 7

Salazar, Hon. Ken, U.S. Senator from Colorado, prepared statement ................ 8

Isakson, Hon. Johnny, U.S. Senator from Georgia ............................................... 9

Lott, Hon. Trent, U.S. Senator from Mississippi .................................................. 18

Prepared statement .......................................................................................... 20

Landrieu, Hon. Mary, U.S. Senator from Louisiana, prepared statement ......... 23

WITNESS

Nicholson, Hon. James R., Secretary of Veterans Affairs, accompanied by

Jonathan B. Perlin, M.D., Ph.D., Under Secretary for Health; Tim S.

McClain, General Counsel; and Robert Lynch, M.D., Director, Veterans

Integrated Service Network 16 ........................................................................... 9

Prepared statement .......................................................................................... 12

Response to written questions submitted by Hon. Daniel K. Akaka ........... 16

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REBUILDING THE GULF COAST FOLLOWING

HURRICANE KATRINA

THURSDAY, NOVEMBER 10, 2005

U.S. SENATE, COMMITTEE ON VETERANS’ AFFAIRS, Washington, DC.

The Committee met, pursuant to notice, at 2:04 p.m., in room

SD–138, Dirksen Senate Office Building, Hon. Larry Craig, (Chairman of the Committee) presiding.

Present: Senators Craig, Hutchison, Thune, Isakson, Akaka,

Murray, and Salazar.

Also Present: Senators Lott, Cochran, and Landrieu.

OPENING STATEMENT OF HON. LARRY E. CRAIG,

U.S. SENATOR FROM IDAHO

Chairman CRAIG. Good afternoon, ladies and gentlemen. The

Committee will come to order.

The Committee meets this afternoon to hear from the Secretary

of Veterans Affairs and his staff on the efforts VA is undertaking

to re-establish service and rebuild VA facilities along the Gulf

Coast in the aftermath of Hurricanes Katrina and Rita.

Before we begin to talk about the future of the VA in the region,

I would like to spend just a moment to recognize VA’s past efforts,

especially those in the weeks following Hurricane Katrina’s landfall. As many of you may know, VA was one of the few bright lights

to shine through the devastation that hit the region.

Advanced planning and a well-known electronic medical records

system helped ensure that the VA could coordinate and move thousands of staff and patients to facilities across the United States

without a single loss of life attributed to the lack of medical attention. In addition, VA staff members, volunteering thousands of

hours of their time to assist veterans and other citizens in the affected communities, ensured that the aftermath of this storm went

as smoothly as possible.

While more people than I can possibly name are responsible for

that success, I want to especially recognize the gentlemen sitting

at our front table today, Secretary Nicholson, Dr. Perlin, and Mr.

McClain. Your efforts ensured that emergency response plans were

created in advance of the storm and implemented.

In particular, though, I want to single out our fourth member of

the panel today, Dr. Lynch. Robert Lynch was VA’s man in charge

on the ground in the Gulf. He and his staff worked countless hours

for the good of thousands of our veterans. Dr. Lynch, I hope you

know how proud we are of your efforts and those of your staff. You

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lead a truly remarkable group of individuals, and I hope you will

pass on our highest compliments to all of them.

Like so many private houses and businesses, the Department of

Veterans Affairs experienced a significant amount of destruction

and damage during Hurricane Katrina. The VA’s medical center in

Gulfport, Mississippi, was totally decimated by the storm.

In New Orleans, VA’s medical facilities experienced significant

flooding on the lower floors and wind damage on the upper floors.

That damage, coupled with a lack of electricity and ventilation,

raises serious concerns as to whether the interior of these buildings

is beyond repair.

In addition, VA has no regional office in New Orleans at this

time to handle disability compensation payments and other benefit

matters. The office was located in a postal building in downtown

New Orleans that sustained water damage and has not reopened.

Even VA’s one working medical facility in the Gulf region, the Biloxi VA medical center, sustained some structural damage and is

in need of repair.

Putting all of these pieces together, or I should say back together

again, will be a massive undertaking. It will not be easy or inexpensive. VA is confronted with the fact that there is no real medical infrastructure at all in New Orleans.

Both LSU and Tulane medical schools, which were a significant

source of medical staff for VA facilities in the region, are not open.

Even many of the veterans who relied on facilities along the coast

are now living in other areas of Mississippi and Louisiana.

To address the financial considerations facing VA, the President

recently sent his third hurricane supplemental request to Congress.

This request identified $1.15 billion to help VA rebuild efforts at

the facilities I have just mentioned. Further, the bill includes $300

million to purchase new equipment and replace pharmaceuticals

which were lost or destroyed during this emergency.

I look forward to the Secretary’s testimony to get some of the detailed information about this rebuilding effort and perhaps some

estimates on timelines and other challenges we face.

With that, I will recognize Secretary Nicholson. Our Ranking

Member, Senator Akaka, is not here. Let me then turn to my colleagues who are now here to see if there are any opening comments

before we turn to the Secretary.

Senator Murray. Patty.

Senator MURRAY. Mr. Chairman, thank you very much. I apologize. I won’t be able to stay for the hearing because we have a

transportation conference that I need to go to in a minute.

But I would like to submit my statement for the record.

[The prepared statement of Senator Murray follows:]

PREPARED STATEMENT OF HON. PATTY MURRAY, U.S. SENATOR FROM WASHINGTON

I want to thank Chairman Craig and Ranking Member Akaka for having today’s

hearing and for the distinguished Members joining us from the affected region.

I also wanted to thank Secretary Nicholson for being here to answer our questions

on how the VA is moving forward with rebuilding and recovering from the destruction caused by Hurricane Katrina.

Mr. Secretary, we’re here today to see that we take care of veterans who have

been displaced or whose services have been interrupted by Hurricane Katrina.

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However, as we do that, I want to make sure that we do not end up jeopardizing

or in any way compromising the quality of care available to other veterans across

the Nation.

The reason I raise this concern is that just this year, we faced a situation in

which bad planning and budgeting on your part led to a massive shortfall in VA

healthcare funding.

If I hadn’t insisted on making sure we provided funding to meet that shortfall—

in spite of your assurances, our veterans would be in serious trouble right now.

Mr. Secretary, I do not want to sit here 8 months from now and hear that the

VA underestimated the impact of Katrina and had to take money away from veterans who need care to compensate for its mistake.

Now, let me say that I, like everyone in America, was saddened to see the devastation in the Gulf region after Hurricane Katrina. The families without homes, and

the cities in tatters, were tragic. There are many steps that need to be taken to rebuild that region.

But I am worried that Congress will do so by shortchanging programs required

by other Americans. That would be wrong.

As a long-time Member of the Senate Veterans Affairs Committee, I am very concerned that veterans’ medical services are susceptible to be sacrificed in the name

of reconstruction.

While we have an obligation to help Hurricane-affected areas rebuild, we cannot

do so by drawing out precious funding from other important programs.

Unfortunately, Hurricanes Katrina and Rita came at a time when the United

States Government is running over an 8-trillion dollar deficit.

Add to this complicated equation, military activity in Afghanistan and Iraq costing over 60 billion dollars a year.

And this number only represents occupation costs, not money for rebuilding efforts or funding for soldiers as they return home from the battlefront.

As Congress and this Committee consider how to move forward with reconstruction in the devastated region, we must do so without shirking other promises we’ve

made, especially to our veterans.

Tomorrow is Veterans Day, a day to honor the sacrifices our soldiers have made

when called upon to serve this country.

When our Government asks them to leave their families and go to foreign soil to

represent this country, we promise them we will do our part to care for them upon

their return.

In times of budget shortfalls, massive deficits, and growing pressure to keep costs

down—we must remember our promise and fight to fulfill it.

I’m here today to make it clear that Congress must provide the VA the funding

it needs to rebuild and not use Medical Services funding or other VA funding to

cover Katrina-related costs.

Secretary Nicholson, you and I have gone back and forth on the VA budget and

the budget shortfall.

I have spent the better part of a year fighting with the Administration to get the

funding our veterans need.

What we saw occur during fiscal year 2005 should not be repeated in either fiscal

year 2006 or in fiscal year 2007.

I hope Secretary Nicholson has a promising update on VA funding both for reconstruction after Katrina and for medical care and benefits.

Mr. Chairman, the VA did not adequately anticipate demand when it set its 2005

budget. An increase in usage from veterans returning home from war was up and,

leading to increased strains on the VA.

I fought hard to prevent the $1 billion shortfall the VA reported in June.

I asked three times to get additional funds to the VA to prevent that shortfall,

but you, Mr. Secretary, would not admit there was a deficit.

After it came to light that there was indeed a shortfall.

Working with my colleagues I was able to secure $1.5 billion dollars in supplemental funding to make sure that our veterans could get the services promised to

them.

But, as we know, that funding only covered the last fiscal year’s need.

I remain concerned that we will end up right back here in trying to supplement

the 2006 budget next year.

And I hope to hear from the Administration on how they have changed their

budget models to adequately prepare—especially in light of the increased number

of OIF and OEF veterans needing to access VA care.

Today, we are relying very heavily on Guard members.

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Where traditional active duty members would access military healthcare, we now

have over 500,000 Guard members who have fought in Iraq and Afghanistan, who

have returned home, and who are now eligible for VA care.

I have been informed by the VA that to date only $500 million dollars of the $1.5

billion supplemental has been spent.

I have also been told the rest has been rolled over into fiscal year 2006.

As you know Mr. Secretary, this rollover funding has been a critical piece of the

negotiation on the VA’s fiscal year 2006 budget.

I hope to hear from you today about the nature of that rollover and whether or

not those funds will be used for medical services or to assist in rebuilding in the

Gulf.

I’m worried that the higher level of funding requested by the Senate for 2006 will

be reduced in conference.

This will force the entire system to be based on bare minimum funding.

If one thing goes wrong—cost overruns in rebuilding VA facilities in the Gulf, increased utilization, or an across the board cut—veterans access to care will become

limited.

On September 8, 2005, Secretary Nicholson, you told four congressional Committees that—and I quote—‘‘We will need additional funding for clean up, repairing facilities, providing temporary facilities and staffing.’’ End quote.

The VA requested $1.2 billion dollars for reconstruction and $198 million dollars

for medical care at VA hospitals and clinics in the gulf coast region as a consequence of the Hurricanes.

Currently where did you get the funding to pay for bringing these facilities back

into operation?

How are CBOCs paying for the replacement supplies and pharmaceuticals they

need to care for area veterans?

How are you paying for the added staffing and transportation costs right now?

Mr. Secretary, what are you doing to ensure that reconstruction costs are not coming out of the medical services earmarked for our veterans?

I sincerely hope to get answers from you on these important questions today, Mr.

Secretary—for the sake of our current and future veterans.

Mr. Secretary, we have learned many lessons this past year when it comes to VA

funding.

I have learned to doubt your numbers, to question which accounts are being used

for what, and I am very concerned that when an inadequate Katrina request is

added in with limited VA funding, that we are going to see a shortfall next year.

One lesson I think you should walk away with, Mr. Secretary, is that we need

a real VA budget for fiscal year 2007. No budget gimmicks. No increased fees that

Congress will never endorse.

A real budget that acknowledges that we have had over 1 million Americans serve

us in Iraq and Afghanistan since 2001.

A real budget that acknowledges that our veteran population is aging and facing

new mental health challenges.

A real budget that acknowledges that medical costs and utilization rates are going

up for the VA.

Mr. Secretary, the bottom line is that 8 months from now I don’t want to be hearing how shortfalls and ever-expanding Katrina costs are hurting our veterans by

keeping them from getting the care they deserve.

Thank you for your time here today, Mr. Secretary.

I look forward to hearing your testimony.

Chairman CRAIG. Without objection.

Senator MURRAY. But let me just make a few comments. First of

all, obviously, the devastation with the hurricanes is something

that has impacted the VA immensely, and we all want to make

sure we have the funds there. They did a great job, and we all

want to be sure that we have the money there to take care of it.

My concern is that we don’t rob the existing funds within the VA

to do that. I am submitting some questions for the record to make

sure that is not the case. We had a long, drawn-out battle about

funding for VA. We are still, as Senator Hutchison knows, in conference, making sure that we have the dollars that were promised

to our veterans there.

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I want to make sure that the money that is out there for our current veterans services isn’t being used for this. That we are asking

for additional dollars to pay for that because those funds are absolutely critical.

And Mr. Secretary, I particularly want to know about the money that is being rolled over, the rollover account. I believe $500 million

has been rolled over from the supplemental. I want to find out if

that money is being used for Katrina or if it is being used specifically for what we were told it was, which was for our medical facilities and our veterans across the country. But I will submit those

questions for the record.

I do want to take this opportunity, Mr. Chairman, to thank you

for your announcement today that you are stopping the questioning

of our soldiers with PTSD. I think that was extremely positive. It

positively impacted a lot of veterans who were very concerned

about that kind of interrogation, and I do appreciate that.

And finally, Mr. Chairman, let me just say I hope we have all

learned our lesson. I hope we get from you real numbers, real

budget numbers. We have an increasing number of soldiers returning home. We have our Guard and Reserve members, who are increasingly accessing VA facilities now as they return from the war.

We have a number of aging veterans. We have, obviously, the impacts of Katrina.

We need, as we go to the 2007 budget, which you will be presenting to us fairly soon, we need to have a real number. So 8

months from now, we are not back in the same situation.

So, Mr. Secretary, thank you for being here today. Mr. Chairman, I apologize for not staying. But I will submit my questions

for the record and would appreciate a response back as quickly as

possible.

Thank you.

Chairman CRAIG. Patty, thank you. And of course, those questions will be for the record and submitted to the Secretary for his

response.

As most of you know, I invited all of the Senators who are not

Members of this Committee, but certainly Senators of the affected

States to participate in this hearing today as Members of the Committee and ask the questions. And so, Senator Thad Cochran is

here, who is also, most importantly, beyond being senior Senator

from Mississippi, the Chairman of the Appropriations Committee

from which all money flows.

Senator COCHRAN. We are out of money.

[Laughter.]

Chairman CRAIG. Senator Cochran.

STATEMENT OF HON. THAD COCHRAN, U.S. SENATOR

FROM MISSISSIPPI

Senator COCHRAN. Unfortunate news. Thank you, Mr. Chairman.

Let me express our appreciation to you for your leadership on the

Veterans’ Affairs Committee and also as a key advisor on needs of

the Veterans Administration. When it comes time to making decisions about the level of appropriations and where the priorities

ought to be, we appreciate always the good advice and counsel we

receive from you and your Committee.

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And today, we are particularly glad to see you looking at the

issue of damage and what needs to be done and is being done to

restore facilities to operational levels and repair damage that needs

to be repaired and what effect it may have long term on veterans’

interests in this region of our country.

I have a prepared statement, which I would hope you could include in the record, along with some questions to submit to Secretary Nicholson and his staff. We appreciate their work. Outstanding leadership is being provided to the veterans and to our

country by these fine gentlemen.

Thank you.

PREPARED STATEMENT OF HON. THAD COCHRAN, U.S. SENATOR FROM MISSISSIPPI

The Mississippi Veterans Affairs facilities suffered a significant amount of damage due to Hurricane Katrina. The Department of Veterans Affairs administered

two medical hospitals on the coast, one in Biloxi, the other in Gulfport and a national cemetery in Biloxi. The Gulfport VA Hospital was completely destroyed by the

hurricane. Seventy-eight patients were evacuated to the Biloxi facility before the

hurricane and 20 patients were transferred to Jackson from Biloxi. The Biloxi VA

Hospital suffered roof damage, but it is fully operational. The Department of Veterans Affairs was in the process of implementing their Capital Asset Realignment

for Enhanced Services (CARES) Plan before the hurricane which would transfer the

Gulfport operations to the Biloxi VA Medical center and possibly lease the Gulfport

property to developers. The VA National Cemetery located on the Biloxi campus suffered some damage including the uprooting of trees and some damages to roadways

and headstones.

The President’s supplemental request provides $1.2 billion to replace the medical

center in New Orleans, LA, and to repair and construct a bed tower to the medical

center in Biloxi, MS. The request also includes $198.3 million for the replacement

of medical supplies, equipment and pharmaceuticals and $1.8 million has been requested to repair roads and other damage that was sustained to the national cemetery.

Chairman CRAIG. Thank you very much.

Our Ranking Member has just arrived. I will turn to Senator

Akaka for any opening statement he would like to make.

STATEMENT OF HON. DANNY AKAKA, U.S. SENATOR

FROM HAWAII

Senator AKAKA. Thank you very much, Mr. Chairman.

I want to welcome our panel. I want to welcome the distinguished panelists here. I am delighted, and it is so great to hear,

Mr. Secretary, that the Department of Veterans Affairs is suspending its plan to review 72,000 posttraumatic stress disorder

compensation claims.

This is great news for all veterans. Make no mistake. This review

would have put some veterans at risk of losing compensation that

they had already been awarded by VA. Many times, VA compensation is sole source of income for veterans and their families.

During October, Congressman Evans and I wrote to Secretary

Nicholson, asking that the PTSD review be suspended until VA

could complete its smaller review of just 22,100 claims. I am

pleased that upon completion of the smaller review, VA has decided

that they are not going to put veterans through the anxiety that

a widespread review of their disability claims would create.

I am certain that veterans in New Orleans who were subject to

this planned review will be relieved that the benefits that they

have earned will not be put in jeopardy.

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Mr. Chairman, this hearing on the reconstruction of VA facilities

along the Gulf Coast highlights our continued focus in the aftermath of Hurricane Katrina. As we all know, VA performed with

distinction in its response to Hurricane Katrina, and we are proud

of that.

With no loss of life or injuries reported, the employees in the affected area showed tireless dedication in some of the most adverse

conditions. VA kept its commitment to veterans and patients at a

time when they were most needed.

Now we must all follow through with the current task at hand—

fully restoring accessible health care and benefit services to veterans. VA is compelled to make sound decisions in a timely manner. VA must be proactive in its rebuilding effort. With so many

in dire need, we must not rest until we finish the job of restoring

critical services, such as in-patient care in New Orleans and assisted living beds in Biloxi and to the veterans in the affected region.

Our Committee is dedicated to assisting VA and helping veterans

affected by Hurricane Katrina. My goal is to seek transparency in

the planning process and reconstruction effort. We must also ensure the funding for this effort does not come at the expense of

needed health care dollars for next year. Our commitment to oversight as a means for VA, to let our veterans know of the tireless

effort in restoring quality service and care.

Mr. Secretary, I look forward to taking those first steps today

and to be with you as we do it.

Thank you.

Chairman CRAIG. Thank you, Danny.

Senator HUTCHISON. Kay?

Senator HUTCHISON. Thank you, Mr. Chairman.

STATEMENT OF HON. KAY HUTCHISON, U.S. SENATOR

FROM TEXAS

Mr. Chairman, I am very pleased to be able to have this hearing,

and I am sorry I am going to have to leave for the same conference

as Senator Murray. And I am also chairing another conference

committee. That is what is happening this week. All of the final

hearings and conferences seem to be coming at the same time.

But as the Chairman of the Veterans’ Affairs Appropriations

Subcommittee, what you bring to us today is going to come to my

subcommittee. And I certainly intend to assure that everything

that was damaged in Hurricane Katrina or Hurricane Rita—and I

hope that we will not forget that there was another hurricane that

was very devastating on the Gulf Coast. It wasn’t the magnitude

of Katrina, but it was pretty tough on the western part of Louisiana and the eastern part of Texas. But we are certainly going

to work with you.

I do want to say how pleased I am that not one veteran lost his

life or her life in the evacuation from the Katrina hurricane, and

really, I was amazed at how well the Veterans Affairs Department

did in making sure that the records were available where a veteran

went later after evacuation. I think it worked a whole lot better

than anything in the private sector, and I really appreciate that.

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And certainly, we want to rebuild those facilities in a way that

we will assure that they can withstand a Category 5 hurricane in

the future. But I think the care that was given to our veterans is

commendable. It is the right thing to do, but the important thing

is that you did it. And we appreciate that kind of service.

And I also have to say that I appreciate the fact that some of the

Veterans Administration doctors and health care professionals

served anyone who walked in the door, not just veterans. That is

exactly what you ought to do in an emergency. And thank heavens,

they weren’t in any way impeded from serving whoever was in

need, a citizen of our country.

So I thank you for the good work that was done, and it was, I

think, a fine hour for the veterans department. Now we are going

to have to rebuild and assure that the veterans who are still evacuated will get the care they need. And that will be the job of my subcommittee, along with Senator Feinstein, as we go into the supplemental that will eventually come.

And I agree with Senator Murray that we want all of the estimates to be for the supplemental, not anything that would come

from the veterans that we are treating in the normal course of operations.

Thank you.

Chairman CRAIG. Kay, thank you very much.

Ken? Senator Salazar, any opening comment?

Senator SALAZAR. I have statement that I will just submit for the

record. But to summarize, I would just echo what my colleagues

here have said.

One, great job to the VA in the response. I think you were a

model of how a Federal agency should act, and I very much applaud that. Two, it is important to open the doors in New Orleans

and other places, and I know that is what we are going to hear

about today. And three, as you look forward to working on this

major agenda, I just look forward to a continuing success story on

the part of VA.

Thank you, Mr. Chairman.

[The prepared statement of Mr. Salazar follows:]

PREPARED STATEMENT OF HON. KEN SALAZAR, U.S. SENATOR FROM COLORADO

Thank you Chairman Craig and Senator Akaka. Thank you Secretary Nicholson

and your staff for being here today.

Ever since the day Katrina made landfall I’ve heard stories about the VA’s herculean response to this storm and Rita and Wilma that followed.

The more I learn about VA’s efforts, the more inspirational the story becomes.

The VA successfully evacuated hundreds of patients, including 10 patients on respirators. VA successfully transferred thousands of patient records. The agency

moved quickly to re-establish VHA presence in affected areas. It successfully accounted for more than 3,000 employees. It offered employees temporary housing,

mental health care, and most importantly, a continued paycheck.

This is a success story that rightfully should be pointed to as a model for disaster

recovery. Each and every VA employee has a right to be proud. You made us all

proud.

However, we are not out of the woods yet. There is still no major VA clinical capacity in New Orleans. VBA has yet to open its doors in that city. There are many

unknowns about the extent of the damage in New Orleans, where evacuated veterans will end up, and what the Gulf Coast will look like.

This hearing is about next steps, and ensuring that the VA’s response continues

to be a success story. The VA has asked for $1.4 billion to recover from the storm.

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I hope we can get behind these numbers and get a firm idea of when VA’s new clinics will come online.

I also hope we can get a more solid understanding of the VA’s intentions in New

Orleans. The people of New Orleans need to know that they will have a world-class

VA Medical Center within the city.

I hope we can all work together to ensure that the VA continues to be a shining

role model for the rest of the Government in its response to Hurricane Katrina.

Chairman CRAIG. Ken, thank you.

Senator Isakson.

STATEMENT OF HON. JOHNNY ISAKSON, U.S. SENATOR

FROM GEORGIA

Senator ISAKSON. In the interest of time, I only have one comment. There have been many questions raised about the performance of a number of agencies. But it is appropriate to note two

agencies, the Coast Guard and the Veterans Administration’s performance in the Gulf in the tragedy.

And Dr. Lynch, a lot of that is to your credit. It has just been

exemplary and outstanding. And I thank the Secretary and the entire department for what they did and yield back the rest of my

time.

Chairman CRAIG. Thank you.

Mr. Secretary, we will now turn to you and the staff you have

brought with you, and we will give you such time as you may need

to present to the committee. Please proceed.

STATEMENT OF HON. R. JAMES NICHOLSON, SECRETARY OF

VETERANS AFFAIRS, ACCOMPANIED BY JONATHAN B.

PERLIN, M.D., Ph.D., UNDER SECRETARY FOR HEALTH; TIM S.

McCLAIN, GENERAL COUNSEL; AND ROBERT LYNCH, M.D.,

DIRECTOR, VETERANS INTEGRATED SERVICE NETWORK 16

Secretary NICHOLSON. Thank you, Mr. Chairman and Members

of the Committee.

I would like to submit a written statement for the record as well.

Chairman CRAIG. Without objection, it will become part of the

record.

Secretary NICHOLSON. I am joined here today by Dr. Jonathan

Perlin, who is the Under Secretary for Health by Tim McClain,

who is the general counsel of the VA and has, for many months,

been the acting Under Secretary for Management, and on my right

is Dr. Robert Lynch, who is the Director of the VA South-Central

Health Care Network, VISN 16.

And I would like also, Mr. Chairman, to thank you for your recognition of Dr. Lynch and his team, his heroic team down there in

the Gulf Coast region. And if time permits, it would be a real privilege for me to recite the heroics of some of those people who, for

days, stayed in the hospitals, moved with their patients to places

they did not know where they were going to end up, while their

own homes were inundated, their families, their locations were unknown to them. But they stayed with their patients.

But Dr. Lynch provided the leadership there. And I know at one

period of time, he was up for 40 consecutive hours because I would

go to our crisis response center in the building, and I went there

at different random times throughout that period, and Bob Lynch

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was always on duty, moving people, planning, he just did an heroic

job.

Thank you for providing us with this opportunity to discuss the

Department of Veterans Affairs ongoing repair and recovery efforts

now in the wake of Hurricanes Katrina and Rita. Mr. Chairman,

I want to thank you and, indeed, all of the Senate for your resolution recognizing and commending the heroic efforts of our employees through Hurricane Katrina.

In this brief testimony, I will speak first to the property damage

and plans for New Orleans, Gulfport, and other Veterans Health

Administration facilities, as well as the impact on VHA employees

at those facilities. Next, I will address the recovery efforts of the

Veterans Benefits Administration and the National Cemetery Administration. And finally, I will discuss a few of the lessons

learned.

Before I begin, I want to assure the Committee and its guests

today that the VA continues serving and supporting veterans affected by Hurricane Rita. Planning has been key to our responsiveness. In early September, I directed senior management to establish a Gulf Coast Planning Group as a result of the extensive damage to VA facilities.

The group will coordinate VA infrastructure planning in the region for the near, mid, and long term. The group, which is chaired

by Tim McClain, will also serve as a plans clearing house, with

particular sensitivity to previous CARES planning.

Addressing first the New Orleans experience and our plans there

for recovery. The New Orleans VA facility initially weathered Hurricane Katrina with minimal damage. But then water from the

breached levies flooded the medical center, compromising the facility’s major electrical, mechanical, and dietetics equipment.

The facility has been without electrical power or air conditioning

now for weeks, resulting in damage to equipment and interior finishes by the effects of very high humidity over a long period of

time. And with so many structures inundated by flood waters, mold

and mildew are pervasive and have already begun to take their toll

on the medical center.

To address the immediate health care needs of veterans in the

greater New Orleans area, the VA plans to open several clinics and

expand operations in Baton Rouge, where we operate a large and

relatively new community-based clinic. We will accelerate our plans

for new CBOCs proposed under CARES, and we have proposed

those for Slidell, Hammond, and LaPlace, with a goal of opening

them early in 2006.

An ambulatory care clinic is being established at the New Orleans medical center. We anticipate opening that clinic next month.

The VA is exploring all of our long-term options to re-establish inpatient and tertiary care services for our veterans in the New Orleans area.

Our affiliates down there, Louisiana State University and Tulane

Medical School, both plan to return to the New Orleans area. But

their major teaching hospitals, Charity and University Hospitals,

will require extensive repair or, indeed, may have to be rebuilt.

The Mississippi experience. The VA medical center at Biloxi

weathered the hurricane quite well and remained fully operational

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throughout the hurricane. Damage was mostly cosmetic, with some

broken windows and damage to building exteriors.

Just 8 miles away, however, the Gulfport VA medical center campus was essentially destroyed by Katrina’s tidal surge. Gulfport’s

workload and VA employees have been transferred to Biloxi, which

is 8 miles away.

Looking longer term, VA’s CARES plan called for the closure of

Gulfport, with design funds provided for Biloxi in fiscal year 2006

and full completion scheduled in 2010. We now propose to accelerate this plan with the goal of replacing clinical functions within

2 or 3 years. We are currently discussing collaborative opportunities with Keesler Air Force Base, which, as you know, was extensively damaged by the hurricane and which is 2 miles away from

our hospital in Biloxi.

The impact on employees. In New Orleans, all but 2 of VHA’s

1,819 employees have been accounted for. A preliminary survey

suggests that approximately 40 percent of our New Orleans medical center staff lost their homes. We have placed VHA personnel

in temporary positions at other VA medical centers, and we will

soon begin offering permanent positions via a priority placement

program for displaced New Orleans employees.

Already some of our employees have accepted positions at other

medical centers, while other employees have chosen to take this opportunity for retiring from our workforce. Housing for VA employees remains a concern.

In Biloxi-Gulfport, all 1,590 VHA employees have been accounted

for. Twenty-eight percent of them report that their homes have

been either totally destroyed or are uninhabitable. Here, we are

working with FEMA to establish temporary housing for VA employees on our Gulfport campus. We have signed an MOU, memorandum of understanding, with FEMA for more than 200 mobile

homes, with priority for VA employees and disabled veterans who

travel frequently to utilize VHA’s health care services, which would

be there at Biloxi.

Recovery efforts of the Veterans Benefits Administration. The New

Orleans regional office, home to 197 VBA employees, was housed

in a General Services Administration building, where we leased

space, and its prime tenant was the New Orleans postal office system, which sustained considerable flood damage and utility outages.

VBA has transferred all pending compensation, that is active

claims and appeals, to the Muskogee and St. Louis regional offices,

and all pension claims to the Milwaukee Pension Maintenance

Center. For now, the VBA has acquired leased space in nearby

Gretna, and we expect to move into the facility early next month.

Recovery efforts of the National Cemetery Administration. The

National Cemetery Administration’s Biloxi staff of 11 people has

restored a normal schedule at Biloxi National Cemetery. The cemetery covers 57 acres, with more than 15,000 grave sites.

The cemetery sustained damage to its administrative building,

maintenance shop and compound, and the cemetery grounds themselves. Clean-up continues, and disturbed grave markers will be

raised and realigned over time.

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What were some lessons that we learned from this? One, we

learned, of course, the benefit of being prepared and practicing and

drilling our emergency response system, which we did and has

made me so proud.

Our VA employees throughout that area acted heroically in every

one of the many crises or sub crises that they faced. And I am very

proud of their abilities to have done that and to confront the many

challenges that nature put in front of them. And as I said, I am

very heartened by the effectiveness of our preparation.

Of note is how our electronic medical records systems continued

to operate until after New Orleans was evacuated. Backup copies

of these records were transferred away from danger and made

available nationwide to treat Katrina evacuees. I contend that VA’s

operations during and after the storms is one of the really positive

stories to emerge from the disaster.

In the wake of the storms, we know where we still need to improve our response to future disasters. We know that we need to

harden our telecommunications infrastructure. Individual systems

may survive a storm, but maintaining both voice and data transmission capabilities will facilitate our response to future disasters.

We are considering expanding the use of fully equipped mobile

clinics as a ready response to future disasters, and we are examining the logistics of having in place larger inventories of pharmaceuticals that can be deployed and dispensed directly to veterans

as soon as the crisis has passed.

In conclusion, Mr. Chairman, the administration is demonstrating its continuing commitment to veterans affected by the

hurricanes by including $1.38 billion for VA recovery and rebuilding in the recent request for supplemental appropriations transmitted to the Congress. That request includes funding to re-establish a full VA medical center presence in New Orleans and accelerate the expansion of the Biloxi facility because of the destruction

of the Gulfport complex.

It also includes funding for essential VBA and NCA needs

throughout these areas. In addition, the VA also is looking at resources in terms of funding and employees to respond to the move

of veteran patients to the Houston medical center.

We look forward to working closely with this Committee and

with the Senate Appropriations Committee and Senators representing the Gulf States regarding the important resource issues

created by Hurricanes Katrina and Rita.

Thank you, Mr. Chairman.

[The prepared statement of Mr. Nicholson follows:]

PREPARED STATEMENT OF HON. R. JAMES NICHOLSON, SECRETARY OF VETERANS

AFFAIRS, DEPARTMENT OF VETERANS AFFAIRS

Mr. Chairman, Members of the Committee and those Members visiting the Committee from the States of Mississippi and Louisiana, I want to start by thanking

you, and indeed all of the Senate, for your Resolution recognizing and commending

the heroic efforts of our employees through Hurricane Katrina. Our VA family was

gratified by your words, as well as the outpouring of support from our committees

of jurisdiction and the entire Congress.

Thank you for providing the Department of Veterans Affairs (VA) this opportunity

to discuss our ongoing repair and recovery efforts in the wake of Hurricanes Katrina

and Rita. These hurricanes challenged our country with two of its greatest natural

disasters. I am pleased to report that all of VA rose to the enormous challenges

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these storms created. From the time of preparation through evacuation to relief and

recovery efforts VA employees stepped up to meet the challenge.

Mr. Chairman, appended to my written statement is a 2-page graphic timeline of

our response efforts to Hurricane Katrina. I believe the Committee will find it quite

useful in reviewing VA’s actions throughout the disaster. Through long hours, considerable personal risk and sacrifice, coupled with incredible resourcefulness and a

total sense of mission, thousands of VA professionals demonstrated what is right

about this country. They have made us all proud to be members of the VA family.

Now we must look forward. The aftermath of these storms will test how we meet

our mission for years to come. While Hurricane Rita produced significant disruptions, it did little permanent damage to VA’s infrastructure. Hurricane Katrina, on

the other hand, produced unprecedented damage to our facilities along the Mississippi Gulf Coast and in New Orleans. Our facilities, the communities we serve,

and the homes of veterans and employees sustained destruction on an unprecedented scale.

As a result of extensive damage to VA facilities caused by Hurricane Katrina, the

Deputy Secretary established a ‘‘Gulf Coast Planning Group’’ in early September

2005 to assist in coordinating VA infrastructure planning in the region. The group’s

mission is to assist in describing and coordinating VA plans for the near, mid, and

long-term timeframes. An important role is to act as a ‘‘clearinghouse’’ for VA plans

by ensuring that the plans make sense, consider previous Capital Assessment Realignment to Enhance Services (CARES) planning, and pass a ‘‘one-VA test.’’

In my brief testimony, I will speak first to the property damage and the plans

for New Orleans, Gulfport, and other Veterans Health Administration (VHA) facilities, as well as the impact on VHA employees at those facilities. Next, I will address

the recovery efforts of the Veterans Benefits Administration (VBA) and the National

Cemetery Administration (NCA). And finally, I will discuss a few of our valuable

‘‘lessons learned.’’

THE NEW ORLEANS EXPERIENCE AND PLANS FOR RECOVERY

Forty-eight hours following Hurricane Katrina’s landfall, as quickly as weather

conditions permitted, a VA damage assessment team was dispatched to the Gulf region to survey VA facilities at New Orleans, Biloxi, and Gulfport. At New Orleans,

the VA facility initially weathered the hurricane with minimal damage. Following

the hurricane, water from the breached levees flooded the entire area around the

medical center, including the basement and sub-basement of the main building.

These areas house the facility’s major electrical, mechanical, and dietetics equipment. The costs associated with replacing this equipment are still under review. VA

is still assessing the total effects of having no electrical power and no air-conditioning in the medical center for a prolonged period. A major cost of restoring the

facility to operational status will include those costs incurred from damage to equipment and interior finishes. VA is continuing to monitor the situation and estimating

the costs of damage and repairs.

We are taking steps to mitigate the damage caused by flooding, humidity, heat,

mold and mildew. Efforts are underway to restore power, water, limited climate control systems, elevators, and safety systems. Some of these repairs are temporary and

do not allow us to use the building in its entirety. Through these interim measures,

we will be able to protect the medical center and its $85 million worth of equipment

from further moisture damage. Additionally, the measures will allow us to more

fully assess the functional capabilities of the equipment and damage to the building.

We are exploring all our long-term options to re-establish inpatient and tertiary care

services for our veterans in New Orleans. We are in discussions with our affiliates,

Louisiana State University (LSU) and Tulane Medical Schools. Both of these schools

plan to return to New Orleans area. The major teaching hospitals for these medical

schools, Charity and University Hospitals, will require extensive repair and, indeed,

they may have to be rebuilt.

Our plans for New Orleans hinge in part on recovery efforts taken by both the

State of Louisiana and other Federal agencies. As the United States’ largest port

in terms of gross tonnage and a critical transportation lifeline for our Nation’s

heartland, New Orleans remains one of America’s great cities. VA is committed to

continuing to serve the veterans who live there.

To address the healthcare of veterans in the greater New Orleans area, VA is

planning to open several clinics and expand operations in Baton Rouge. The city of

Baton Rouge continues to be doubled in population due to hurricane evacuees. This

growth is similarly reflected in the number of veterans seeking care at our clinic

there. Baton Rouge is the site of a large and relatively new Community Based Outpatient Clinic (CBOC). VA will lease the old CBOC building to house administrative

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and clinical support functions for the rest of the New Orleans area clinics. Plans

for new CBOCs proposed under CARES in Slidell, Hammond, and LaPlace will be

accelerated with a goal of opening them early in 2006.

On the site of the New Orleans medical center, an ambulatory clinic is being established. Space that suffered minimal damage is available on the ninth and tenth

floors of the medical center. It was previously occupied by a 60–bed Nursing Home

Care Unit. VA is restoring electricity, water, fire safety systems, and elevator service to the entire building which will support this clinic. We anticipate opening the

clinic in December 2005.

THE MISSISSIPPI EXPERIENCE AND PLANS FOR RECOVERY

Overall, the VA Medical Center at Biloxi remained operational both during and

after Hurricane Katrina. All building systems, with the exception of emergency communications, continued to function normally during this time. Damage at Biloxi included the asphalt shingle roofs on several buildings, windows panes, seals and gaskets, doors and interior finishes, and some damage to electrical and mechanical systems. External to the medical center, significant damage occurred to facility signage

and to a large number of trees on the campus.

At Biloxi, in addition to repairing storm damage, temporary buildings are being

acquired to accommodate functions lost in Gulfport. We are exploring with the Federal Emergency Management Administration (FEMA) the option of placing approximately 200 trailers on 25 unimproved acres at the back of the Gulfport campus. We

are asking FEMA for priority use of these trailers for displaced VA staff and disabled veterans who are patients of the VA Medical Center.

Damage at the Gulfport VA Medical Center, only 8 miles away, was much more

severe, to the point of catastrophic. The tidal surge from Hurricane Katrina destroyed or made irreparable most buildings on the campus. While the boiler plant

and laundry survived, both would need significant repair to resume operations.

Other than recovery efforts, no operations are active at Gulfport. Prior to the storm,

Gulfport employed 440 people. These employees are now working at the Biloxi facility.

VA’s CARES plan called for the closure of Gulfport and new construction at Biloxi

to house services displaced from Gulfport. Design was scheduled to begin this fiscal

year with full completion to occur in 2010. VA now proposes to accelerate this plan

with the goal of replacing clinical functions within 2 or 3 years. As part of this process, we are in discussions to determine if there are opportunities to collaborate with

Keesler Air Force Base in Biloxi as the military replaces their bed tower as part

of the Base Realignment and Closure (BRAC) process.

While the Mississippi gulf coast has been set back, its long-term prospects are

positive. The State of Mississippi is taking steps to help the economy in the region.

It is likely that the population of the Mississippi gulf coast will return to its prestorm levels. VA must be prepared to support the veteran population of this gulf

region.

THE IMPACT ON EMPLOYEES

In Biloxi-Gulfport, all 1,590 VHA employees have been accounted for. All have

been able to inspect their houses and 28 percent report that their homes have been

either totally destroyed or are uninhabitable. In New Orleans, all but 6 of 1,819 employees have been accounted for. While not all employees have been able to assess

the habitability of their residences, a preliminary survey suggests that approximately 40 percent of our New Orleans employees are without their homes.

We confirmed that one employee perished at home during the flooding. All VA

personnel have been placed in temporary positions at other VA medical centers.

The CBOC expansions in and around New Orleans will help address the utilization of our displaced New Orleans employees. Many employees, though not all, will

be able to return to the area to staff these clinics and related functions. A significant number of our staff may choose not to return to New Orleans. Already some

have accepted positions at other VAMCs or have taken steps to retire. Shortly, we

will begin a priority placement program for displaced New Orleans employees. This

will give New Orleans employees priority for any opening in VHA for which they

are qualified. VA already has voluntary early retirement authority and is exploring

the use of buyouts as well.

RECOVERY EFFORTS OF THE VETERANS BENEFITS ADMINISTRATION

The New Orleans Regional Office is housed in General Services Administration

(GSA)-leased space in the New Orleans Postal Office Tower Building. Access to this

facility has been restricted due to flood damage and utility outages, and VBA has

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no definitive information as to when the building can again be occupied. Due to this

uncertainty, VBA has implemented an interim strategy to address the pending

claims workload and to re-establish a regional office presence in Louisiana.

In order to resume the processing of disability benefits claims, VBA has transferred all pending compensation claims and appeals to the Muskogee and St. Louis

Regional Offices, and all pension claims to the Milwaukee Pension Maintenance

Center. Our dedicated New Orleans employees have been working under very adverse conditions in the New Orleans Regional Office facility to box and to ship more

than 11,000 claims files to these offices. A special post office box was established

in Muskogee to receive claims information and other mail from Louisiana veterans.

Louisiana veterans participating in the Vocational Rehabilitation and Employment

Program are currently being served through VBA’s out-based office in Shreveport

and our regional offices in Houston and Little Rock.

To re-establish a presence in Louisiana, VBA has acquired leased space in Gretna,

Louisiana, approximately 10 miles from the regional office location in New Orleans.

Efforts are underway to prepare the building for occupancy. The facility will accommodate up to 105 employees. VBA expects to move into the Gretna facility in December 2005.

Regional office operations will be resumed on a reduced scale in Gretna pending

more definitive information on the occupancy status and expectations for the regional office building in New Orleans. VBA’s priority is to re-establish public contact

and vocational rehabilitation program activities, including benefits, counseling, and

assistance, outreach, fiduciary management services, and rehabilitation and employment services.

RECOVERY EFFORTS OF THE NATIONAL CEMETERY ADMINISTRATION

NCA has no burial or memorial facilities in New Orleans. NCA staff has worked

to restore Biloxi National Cemetery. The cemetery is now operating on a normal

schedule. While substantial progress has been made, cleanup will continue and disturbed grave markers will be raised and realigned. The cemetery’s storage, maintenance, and administrative buildings were damaged and will require additional repairs. Telephone service was disrupted and IT data connections continue to be intermittent. NCA staff responded to the loss of access to the centralized interment data

base by manually entering information so that no burial schedules are affected and

accurate records are maintained.

NCA employees in the region responded quickly to minimize disruptions and

hardships for veterans and their families during these difficult times. Their resourcefulness and dedication have permitted operations to resume, often despite

their own personal adversity.

LESSONS LEARNED

VA is also using this opportunity to examine how to improve its response in future disasters. I am including an abbreviated list of lessons learned, to illustrate

how this review will assist VA in defining its response plans.

Telecommunications

Lessons learned during Hurricane Katrina regarding telecommunications were already in place for Hurricanes Rita and Wilma. Hardening our telecommunications

infrastructure will be a priority as we plan for future disasters.

Mobile Clinics

VA staged a total of 12 mobile clinics to support veterans affected by Hurricanes

Katrina and Rita. Four mobile clinics were sent to south Florida in response to Hurricane Wilma. VA needs to examine the role of such clinics, how they are staffed

and equipped, and how they are supported.

Pharmacy Issues

Massive power failures, destruction of homes and post offices and mass evacuations made mail-based pharmaceutical delivery impractical. VA is examining mobile caches of pharmaceuticals that can be deployed to affected areas and be dispensed directly to veterans—even before commercial operations are able to resume.

CONCLUSION

Mr. Chairman, we know the Committee and the Louisiana and Mississippi delegations are true partners with VA in seeing that Gulf area veterans, despite these disasters, continue to receive the excellent health care, benefits, and other services VA

provides.

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The Administration is demonstrating its continuing commitment to veterans af- fected by the hurricanes. The Administration has included $1.38 billion dollars for

VA recovery and rebuilding in its request to Congress for supplemental appropriations. The request includes $1.15 billion to rebuild the New Orleans Medical Center

and to repair and add a bed tower to the medical center in Biloxi following the destruction of the Gulfport complex. It also includes $25 million for two essential VBA

needs. One, VBA will furnish and activate a replacement regional office in New Orleans. Two, VBA will be able to pay contracting costs for benefits-related health examinations ensuring that veterans’ benefits processing continues as quickly as possible.Thank you for the opportunity to be here today. I and my colleagues will be

pleased to answer any questions you may have.

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. DANIEL K. AKAKA

TO JAMES NICHOLSON

Question 1. Dr. Robert Lynch, Director of VISN 16, has stated that with regard

to the Biloxi VAMC, ‘‘a definitive solution will take Congressional approval and

years to complete.’’ Yet, he has also indicated that there is an immediate need for

interim space to compensate for the loss of services at Gulfport VAMC. Please detail

both the interim and longer term timelines for patient accommodation and continuity of services at the Biloxi campus. Since returning to the standard of providing

inpatient care is considered a long-term project, what is the short-term plan for veterans who require inpatient services at Biloxi?

Answer. All clinical services provided at the Gulfport campus have been moved

to the Biloxi campus, which remained fully operational during Hurricane Katrina.

Patients in the domiciliary, located on the Biloxi campus, were moved to the Department of Veterans Affairs (VA) Medical Center in Tuscaloosa, AL prior to Hurricane

Katrina. The vacated domiciliary building on the Biloxi campus is being used to

house the inpatient psychiatry program from the Gulfport campus. Renovation of

the domiciliary building is needed as an interim solution and will be accomplished

via the minor construction program.

The major construction project described in the response to Question 5 is the longterm solution to the consolidation of all Gulfport services on the Biloxi campus.

Until the major construction project can be completed (in 3–5 years) and construction of the permanent warehouse space via the minor construction program is accomplished, modular buildings will be used to house the administrative and warehouse functions displaced from the Gulfport campus.

A modular clinic is also planned for the Gulfport campus to provide a clinical

presence until a decision regarding the future reuse of the campus is determined.

Additionally, the Federal Emergency Management Agency (FEMA) has requested

the use of 25 unimproved acres at the back of the Gulfport campus for the placement of approximately 200 trailers. We are asking for priority use of these trailers

for homeless VA staff and disabled veterans who are patients of the VA Medical

Center.

Question 2. Will any funding provided by Congress for the purposes of rebuilding

facilities in the region go directly into the general construction account?

Answer. Yes. The construction funds provided by Congress will go into the VA

construction appropriation. Most of the funds required would be appropriated into

VA’s construction accounts. However, these funds would be provided for the specific

purposes of rebuilding VA facilities damaged by the recent hurricanes.

Question 3. With regard to the New Orleans VAMC, Dr. Lynch stated that he does

‘‘believe it is safe to say the VA will return to the Crescent City.’’ Please explain

the factors in the decision to restore/return services to New Orleans.

Answer. There are 57,485 veterans enrolled for care in the New Orleans VA Medical Center. It is expected that the Tulane and LSU Medical Schools will return to

New Orleans. As the United States’ largest port, a major hub for our country’s energy infrastructure, and a critical transportation lifeline for the Nation’s heartland,

New Orleans will remain one of the Nation’s greatest cities. The VA must have a

clinical presence in the city and maintain its commitment to serve the veterans who

live there.

Question 4. VISN 16 has announced plans to open new clinics in La Place, Hammond, Slidell, and New Orleans. I believe VA should establish and operate these

new clinics in the most expeditious and cost-effective manner to provide the needed

medical care to the area’s veteran population. Existing CBOCs in Louisiana and

other areas in VISN 16 continue to provide cost-effective and high-quality outpatient

medical care to the area’s veteran population. Please provide an analysis of the projected costs and timing associated with the establishment of these new CBOCs.

17

Answer. To address the health care of veterans in the greater New Orleans area

we are planning to accelerate opening of three clinics, Hammond, LaPlace, and Slidell, proposed under the Capital Asset Realignment for Enhanced Services (CARES)

plan. Mobile clinics are being used to provide care at this time in these locations.

Our goal is to open clinics by January 2006 contingent upon the availability of

leased space or modular clinics.

Due to the impact of Hurricanes Katrina and Rita, leased space and modular clinics are in short supply and have increased significantly in cost. For example, in

Hammond, there is no adequate leased space available; therefore, purchase of a

modular building is planned. LaPlace may also require a modular building while

adequate leased space may be available in Slidell.

Current cost for a turnkey 9,500 square feet clinical modular building is approxi- mately $1.8 million, which includes the modular building, site prep, ground cover,

and utilities. Build-out and the cost of leasing the land will add another $200,000.

The cost of leased space in Slidell has not been determined.

Question 5. Since the damage caused by Hurricane Katrina leaves the door open

for accelerating the CARES plan in the region, how comprehensive will the transfer

of services from the Gulfport campus to the Biloxi campus be? Are there any services that are unavailable or non-transferable? Has there been an exact determination of how the timeline will shift? And if so, what is the new timeline?

Answer. With the exception of the laundry, VA will consolidate all services provided at the Gulfport campus to the Biloxi campus as part of the CARES plan. A

final analysis regarding laundry function has not been completed. The consolidation

will be accomplished through major construction that will modernize patient care

facilities at the Biloxi campus and provide area veterans with health care in newly

renovated facilities. The project will consolidate and co-locate all clinical and administrative functions of the two-division medical center at the Biloxi campus and construct a new Blind Rehabilitation Center, also a part of the CARES plan. Barring

any significant delays the timeline for award and construction of new clinical facilities is January of 2009. Some administrative functions may lag until 2010.

Question 6. What are VA’s short-term and long-term plans for addressing the

needs of its employees affected by Hurricane Katrina? How does VA plan on compensating staff for temporarily relocating? Will they be given TDY? What is being

done to address the personal needs of affected VA employees in the region?

Answer. All employees from the Gulfport facility have been absorbed in the Biloxi

facility. All employees displaced from the New Orleans facility who want to work

at this time have been placed in VA facilities throughout the country. These New

Orleans employees have been detailed for a 120 days, and are paid temporary duty

travel. They were assisted in finding housing in the locations of their detail.

The proposed clinics and related functions in the greater New Orleans area will

not accommodate all of New Orleans current employees. It will be several years

until employment levels will return to pre-storm levels. In an effort to reconcile our

interim needs with current employment levels, voluntary early retirements are

being offered to New Orleans’ employees and buy-out authority is being explored

through the Office of Personnel Management (OPM). Negotiations with national

labor partners have begun in an effort to establish a Special Placement Program in

the Veterans Health Administration (VHA). The Special Placement Program would

give New Orleans employees displaced by the hurricane first consideration for vacant positions anywhere in VHA for which they qualify.

Employees placed as a result of this program would be eligible for Permanent

Change of Station travel funding. It may be necessary to extend details of these employees to allow this process to occur.

Teams of mental health practitioners were assigned to work with employees who

are experiencing difficulties because of the hurricane. The contact information for

these mental health professionals has been communicated through various means

and published in the ‘‘After the Storm’’ newsletter. Assistance has also been provided with accessing support from FEMA, Red Cross, and other entities.

A needs survey has been distributed to Biloxi and New Orleans employees. The

intent of the survey is to determine the extent of damage the employees sustained

to their property and to identify their needs. VA, through Veterans Canteen Service

and Leadership VA Alumni Association, established funds for donations to employees affected by the hurricane. Over $600,000 has been donated in the two funds to

date. Distribution of these funds using information obtained from the needs surveys

will start shortly. Additionally, the Veterans Canteen Service has allowed employees

to establish credit of up to $1,000 at 0 percent interest to allow those who lost

household goods, etc. the ability to replace those items.

Question 7. On October 14th, the Joint Field Officer in Baton Rouge, Louisiana,

was advised to notify VA to cease the provision of housing because of the lack of

18

interagency agreement with FEMA, or to continue working on preparing their properties for housing evacuees at their own financial risk. Please explain VA response

to this situation. Has VA formulated a plan for requesting reimbursement for making their properties available to FEMA for the purposes of housing evacuees of Hurricane Katrina?

Answer. VA removed properties from the sales market on September 9, 2005, in

anticipation of FEMA using them as temporary housing for evacuees of Hurricane

Katrina. VA has not incurred any costs on these properties other than normal management expenses. VA has spent no funds with the expectation of being reimbursed

by FEMA. VA and FEMA are in the process of negotiating an updated agreement

(existing agreement was entered into in 1988) to facilitate the use of VA properties

by evacuees.

Question 8. What are the daily operating costs for both VHA and VBA of each

interim/temporary facility?

Answer. At present, the only interim facilities/operations that currently exist are

mobile clinics in Hammond, LA, Slidell, LA, and La Place, LA, in addition to the

expansion of the Baton Rouge Outpatient Clinic operations.

Chairman CRAIG. Mr. Secretary, thank you very much for you

and your staff being here.

We have just been joined by Senator Lott of Mississippi, of

course. And Trent, do you have any opening comments before we

go to a round of questions of the Secretary and his staff?

Senator LOTT. That would be appropriate, Mr. Chairman. And let

me ask consent that I have my prepared remarks put in the record.

Chairman CRAIG. Without objection.

STATEMENT OF HON. TRENT LOTT, U.S. SENATOR

FROM MISSISSIPPI

Senator LOTT. I want to thank you and your Ranking Member

Akaka for allowing me to testify or to make a statement here and

for your interest in our veterans and our veterans facilities that

were damaged by Hurricanes Katrina and Rita.

I want to thank the administrator for his leadership and his concern for our veterans and for his service. And also the fact that

after he came to the office, we had to address some tough issues,

and working with Senator Craig and Senator Akaka, we were able

to provide some additional funds for our veterans.

We do have a chart there that shows you what we are up

against. You will note the lower part of the photograph there, that

was Highway 90, a 4-lane road that runs the length of the coast

in Harrison County, Biloxi-Gulfport, Pass Christian, and Long

Beach. And you will see that that road is washed out. But you

know, we very quickly got Highway 90 back in operation. And then,

beyond that, you see the protective barrier, and then the redtopped buildings is the Gulfport VA facility.

One interesting thing to note about this is we did have damage

there this time, significant damage. But it had never been damaged

seriously by hurricanes before, even though it is not in a high area.

It had some damage, but not like we had this time, that amount

of damage. And this time, though, the wood-frame buildings are

gone, and there is significant damage to the other buildings.

Now I know that questions have been raised about what do we

do with this? And can we move those veterans that were there, incorporate them into the Biloxi facility? I believe it was the CARES

Commission had already recommended that the Gulfport facility be

closed. Obviously, I wasn’t that happy about it. But my main goal,

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like all of us, is to have the best service for our veterans and make

sure the facilities are repaired, and they are available.

Part of the problem we have now along the Gulf Coast that I

want the group to think about—and I know that you are working

on—how do we deal with this particular piece of property? And I

understand that if the VA doesn’t keep it, it reverts back to the city

of Gulfport, Mississippi. And they are having to think about what

they would want to do with that, and then in what condition would

it be returned?

And then, if we are going to have these veterans that were at

Gulfport at the Biloxi facility, what repairs are going to have to be

made there, and what would we do to make sure that they receive

the medical care that they need?

The plot thickens by the fact that Air Force officials had recommended that the BRAC Commission close the Keesler in-patient

services and the hospital there. The plan to help the veterans was

that what we were going to be losing at Gulfport would be picked

up by Keesler Air Force Base hospital. Never taking into consideration, frankly, that they didn’t have the capability to do that.

And even though that facility was taken off the BRAC list, the

Air Force still is resisting doing what is necessary to make sure

that we have surgery for residents, and in the out-years, we have

not been able to get something worked out between the VA and

DoD as to what we are going to do. And so, I would urge you to

look at what we need to do in servicing our veterans in Louisiana

and Mississippi and in Texas and Alabama. And by the way, that

facility in Mississippi, we do have some services that we provide for

our veterans in south Alabama and the panhandle of Florida, as

you well know.

So this is a multi-pronged thing that we need to have help. What

are we going to do with Gulfport? What condition is it going to be

in if it is returned to the city? What are we going to do to make

sure that Biloxi has the facilities that it needs?

Now somebody has said, well, to accommodate these additional

veterans, you are going to have a bed tower. Now I don’t know

what a bed tower is. It doesn’t sound too enticing to me. But it will

only include a fraction of the medical services that were originally

available at this facility in Gulfport.

So I would like to work with you on the Gulfport facility, what

we need to do at Biloxi, and how we come to terms with the Air

Force and the Pentagon about these veterans being able to get access to the care they need and the surgery they need, for instance,

at the Keesler Air Force Base hospital.

One other thing, I don’t begrudge anybody getting help. Louisiana is desperate. They need a lot of help. But the hurricane

pounded Mississippi. When a hurricane goes ashore, it doesn’t stop

at the coastline, No. 1. Number 2, the worst part to be in is the

Northeast quadrant. That is what we got.

The hurricane went in on the Pearl River, which means right on

the border between Louisiana and Mississippi. So the hardest damage, the most wind damage and the most tidal surge damage, came

to Mississippi.

Now the problem in Louisiana was that they had hurricane damage, but then their problem got worse. It was worse for them on

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Friday, after the hurricane on Monday, than the day of the hurricane because they had the levies break and the rising water.

But the point I am trying to make is when you are looking at

$1.2 billion, I believe you mentioned that figure, didn’t you, Mr. Administrator? As I look at that, it looks to me like the lion’s share

of that would be going to Louisiana. And for instance, the supplemental included $1.2 billion to re-establish medical care on the

Gulf Coast, with most of that money designated to replace the VA

hospital in New Orleans, which was flooded on the first floor, just

like the Keesler hospital.

My plea is make sure there is equity here. You can’t put a billion

dollars on that one facility in New Orleans and not deal with the

needs we have in Mississippi. Now having said that, thank you for

what you have already done. I know you have been there. I know

you have met with our veterans. Same thing to the leaders of this

Committee.

Our veterans have not been forgotten in the aftermath of the

hurricane, But we have got a good piece to go, and we have got

some sticky problems that we need to address. And I hope that you

will allow me to work with you on that and have impact.

Thank you, Mr. Chairman. That is basically the points I wanted

to make anyway.

[The prepared statement of Mr. Lott follows:]

PREPARED STATEMENT OF HON. TRENT LOTT, U.S. SENATOR FROM MISSISSIPPI

I would like to thank Chairman Craig and Ranking Member Akaka for allowing

me to testify regarding the repair and recovery effort to VA facilities on the Gulf

Coast.

Prior to hurricane Katrina, the Gulf Coast Veterans Health Care System was a

five-division system with major hospitals at Gulfport and Biloxi, Mississippi, and

three Community Based Outpatient Clinics located in Alabama and Florida.

Approximately 242,000 veterans live in Mississippi today, and almost 40,000 of

those veterans received medical care last year from the VA. In fiscal year 2003

alone, VA facilities in Mississippi had 8,966 inpatient admissions and provided

633,758 outpatient visits. Even in the wake of Hurricane Katrina, the number of

veterans in my State is projected to significantly increase, not decrease.

The Biloxi VA hospital serves as the general medical facility, providing outpatient

and specialty care, and inpatient surgical services. Prior to the storm, the Gulfport

hospital provided inpatient and outpatient mental health services, and also housed

an Alzheimer’s dementia unit. Gulfport also included a psychology unit, rehabilitation medicine including a therapeutic pool, primary care, and audiology.

This is a picture of the Gulfport VA today. Obviously, the Gulfport facility sustained major damage in the hurricane.

Wooden buildings were largely destroyed, and patient buildings were flooded on

the first floor.

Thankfully, all patients were safely evacuated before the storm hit; and only a

few VA employees remain at Gulfport.

Given the extent of damage to the Gulfport VA, I understand that the Veteran’s

Administration would like to permanently close the facility, and transfer all Gulfport health care services to the Biloxi VA or Keesler medical center.

The Committee may recall that the CARES Commission proposed in 2004 to

transfer all Gulfport health care services to the Biloxi VA or Keesler hospital; renovate the nursing home in Biloxi; and establish a 36-bed blind rehabilitation center

at Biloxi.

As part of the consolidation, the VA also planned to open outpatient clinics in Columbus, McComb, Pontotoc County, Tunica and Grenada, Mississippi.

Although I was never enthused with the VA’s decision to close the Gulfport facility, I do appreciate that the CARES Commission made site visits to the VA facilities

and to Keesler, and held open hearings.

The Commission’s recommendation regarding the Gulfport VA was based on contingent assurances that patients would be treated at Keesler hospital. UnfortuVerDate 11-MAY-2000 13:06 Jun 13, 2006 Jkt 027353 PO 00000 Frm 00024 Fmt 6633 Sfmt 6621 C:\DOCS\27353.TXT DianeA PsN: DianeA
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nately, to date, I am not aware of any such commitment by the Air Force to treat

VA patients.

To the contrary, the Air Force medical community recommended during the BRAC

process to eliminate all outpatient capability from Keesler Hospital—at the same

time they were talking with the VA about the possibility of absorbing patients.

And, even though the BRAC Commission rejected the Air Force’s recommendation

to convert Keesler Hospital to an outpatient clinic, I understand that the Air Force

medical community continues unabated in their desire to eliminate surgery residents by 2007.

Obviously, I strongly oppose the Air Force’s continuing position regarding elimination of any medical capability at Keesler hospital—and will work to convince

them otherwise.

Consequently, I believe it is ill-advised to assume that the Air Force has agreed

to takeover ANY of the medical services previously performed by the VA in Gulfport.

Mr. Chairman, I’m not here today to throw water on the notion of having our military and VA hospitals share capability and patients—I believe the concept has

merit.

However, the concept will only work if the VA and DoD formally agree on the distribution of capability between Keesler Medical Center and the Biloxi VA, and budget for the infrastructure that will be required to achieve that goal, and maintain

it.

Thus far, the recent Katrina supplemental request includes $1.2 billion to reestablish VA medical care on the Gulf Coast, with most of that money designated to replace the VA hospital in New Orleans (which was flooded on the 1st floor, just like

Keesler hospital).

Of that $1.2 billion, I understand that less than 20 percent of that money is available re-establish VA healthcare for Mississippians, by building a new ‘‘bed tower’’

at the Biloxi VA.

While I’m not certain what a ‘‘bed tower’’ may be, or even how many ‘‘beds’’ it

may hold, I’m fairly confident that it will only include a fraction of the medical services that were originally available on the 50-acre campus of the Gulfport VA (reference the aerial picture).

Also, there is no money in the Katrina Supplemental for the Air Force to absorb

additional patients from the VA. And, again, I’ll emphasize that the Air Force would

like to eliminate the surgery program at Keesler Hospital.

Mr. Chairman, as the Committee does its important work of considering how best

to renew, recover, and rebuild VA facilities on the Gulf Coast, I urge you to support

the following:

(1) Commit to re-establishing the full-level of medical capability that was available to Mississippi veterans prior to Hurricane Katrina;

(2) If veterans’ medical care will be provided through a partnership between the

VA and Keesler hospital, the Air Force and the VA must make long-term commitments regarding the budget and scope of medical service that BOTH organizations

intend to provide; and

(3) If those commitments and budgets are not forthcoming, the VA should be prepared to go-it-alone and build all required infrastructure on the Biloxi VA campus

that is necessary to provide the full spectrum of medical services that were previously available at the Gulfport VA.

Mr. Chairman, thank you again for the opportunity to testify regarding this important matter.

Chairman CRAIG. Well, Trent, you have asked some to-the-point

questions that, in part, were addressed by the Secretary in his

opening comments.

We have Robert Lynch with us, who is the coordinator for the region. Let me set the first question somewhat in the context of what

Senator Lott has spoken to, and why don’t you attempt to broaden

on that?

You appointed a Gulf Coast Planning Group, which will coordinate VA’s plans, as you said, in the near-, mid-, and long-term future timeframes. Last week, the President appointed FDIC chairman Don Powell to coordinate all of the Federal support for recovery and rebuilding efforts.

22

So I think my question, specific to some of what Trent has asked,

coupled with this coordinated planning effort, is the right hand and

the left hand communicating now? Is the coordinating or the Gulf

Coast planning council that is coordinating VA’s plans working

with Chairman Powell and that coordinated effort in concert with

how we deal with Gulfport, Biloxi, and all of that combination of

events?

And you had mentioned, as we had talked about earlier, and Dr.

Perlin, you and I talked about what they might be able to do to

offset some of these needs. In that context, focus in on that and respond to those questions, if you would, please.

Secretary NICHOLSON. Yes, sir, Mr. Chairman.

First of all, our Gulf Coast Planning Group is interior to the VA

because we want to make sure that our left hands know what our

right hands are doing, both in Washington and out there in the

VISN on the ground, what the needs are. That is their charge to

assess that, evaluate it, and then look at the needs and develop a

position that we, as an agency will advocate. And we do anticipate

working closely with Mr. Powell and that sort of overarching Federal coordinating effort. So, indeed, we will do that.

And as to your question, Senator Lott, we are very sensitive, I

think, to the respective situations in Mississippi and Louisiana.

And we are, as we are here speaking, seeking to establish a collaborative endeavor with the Air Force in Keesler because it just

seems to me to make eminently good sense for us to examine sharing some facilities and sharing some services.

And we have now created some good models for that in some

other locations with DoD inside the United States. So we wouldn’t

be doing something out of whole cloth there. There are some models now for that. We have just initiated one in Chicago with the

Navy, and so we agree, and think that that makes good sense.

Senator LOTT. If I could just build on that?

Chairman CRAIG. Yes.

Senator Lott.

Senator LOTT. The theory is good. We have got to make sure that

it is actually going to be there. I mean, the theory of using Keesler

Air Force Base hospital for these veterans that were being served

at Gulfport is good. But the question is, are they going to have the

facilities? So I hope that you will collaborate with them on that.

Secretary NICHOLSON. One thing, if I might, Mr. Chairman, to

respond to bed tower?

Senator LOTT. Yes, what is a bed tower?

Secretary NICHOLSON. A bed tower is the rubric used to describe

a multi-storied hospital building that has in-patient beds in it. It

is not an outpatient clinic facility. It has in-patients, people who

have to come and spend time in a hospital. And that is efficient use

of space because with elevators, you don’t have to build out linearly. You can stack utilities and stack the construction of the

building.

Senator LOTT. While I am at it, Mr. Chairman, could I ask a couple more questions?

Chairman CRAIG. Please proceed.

Senator LOTT. I know there is a little squirm and stirring around

when I mentioned if we are going to close the Gulfport facility. And

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you will note I didn’t say we shouldn’t do it. I have discussed this

with the Chairman. We are aware of what is going on there, what

the case may be.

But it is my understanding that if that happens, it would revert

to the city of Gulfport, Mississippi. If that is not the case, I would

like to know.

Secretary NICHOLSON. I will have to get back to you on that because if that is the case, I am not aware of it. There could be a

covenant in that conveyance, and we will have to look at that.

I will tell you the conversation that we are having currently with

FEMA and with the Governor and others is to put some temporary

housing in there. And we would enter into, and I think, actually

consummated a memorandum of understanding with FEMA to put

200 units of temporary housing in there, with a priority to patients

that need care in nearby Biloxi hospital and disabled veterans.

Senator LOTT. Thank you, Mr. Chairman.

Chairman CRAIG. Thank you, Trent.

We have been joined by Senator Landrieu. Mary, thank you for

joining us. We will treat you as a full Member of this Committee.

The Secretary has outlined, in large part, by his testimony what

their current plans are as we evolve out of Katrina and Rita. So

if you have an opening comment, please feel free to make it, and

then we will resume questioning.

Senator LANDRIEU. Thank you, Mr. Chairman. I will be brief and

wait my turn for questions. But I thank you and the Ranking

Member for including me.

Of course, this is a very important part of our recovery effort and

a very important part of our health care delivery system for New

Orleans, Louisiana, and the Gulf Coast region. And as Senator Lott

knows so well, we do try to work in partnership, caring for the veterans that are in our area and their families and between the Gulf

Coast and New Orleans.

So I am going to submit my statement for the record. Obviously,

we have some strong views on how we can rebuild and provide

good services to our veterans, and I may have a few questions. But

I will wait my turn, Mr. Chairman, and I am sorry that I couldn’t

get here earlier.

Thank you.

[The prepared statement of Ms. Landrieu follows:]

PREPARED STATEMENT OF HON. MARY LANDRIEU, U.S. SENATOR FROM LOUISIANA

Mr. Chairman: Thank you for calling this hearing to discuss rebuilding the Veterans Affairs system in the Gulf region after Hurricanes Katrina and Rita. I would

like to start by again thanking the VA for their immediate and heroic response to

Hurricane Katrina. I believe it speaks volumes about the Veterans Administration

when over 1,000 patients, employees, and their families were evacuated, and all

without the loss of any life. That truly was a feat within itself.

Our country has never witnessed the destruction and devastation seen in the Gulf

Coast region following Hurricanes Katrina and Rita. Lives have been lost; dreams

and hopes shattered; buildings destroyed; and parishes and part of a major city

were under water. We are saddened by the loss of life. We will never bring those

people back, but we can restore and rebuild cities and parishes, and once built, we

can restore dreams and hopes. It is my belief, that the Veterans Administrations

is a key to the revitalizing the entire Gulf region.

Before the storms, the State of Louisiana had an estimated 400,000 veterans,

37,000 throughout the Southeast region, 3 Veterans Medical Centers (VAMC), 2

Out-Patient Clinics, and a few Community Based Outpatient Clinics (CBOC) and

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Vet Centers. However, the unprecedented events of Hurricanes Katrina and Rita

have left the integrity of the Louisiana VA system in jeopardy. Many of our veterans

have evacuated, structural damage has been sustained, and our other facilities are

becoming over-crowded.

The New Orleans VAMC is a 450-acute care bed facility that delivers primary,

secondary, and tertiary care. It provides state-of-the-art outpatient and inpatient

services for 57,485 veterans in a 23-parish region and parts of Mississippi and the

Florida panhandle. As you know, this state-of-the-art facility sustained extensive

flood and structural damage and has been temporarily shut down. We are counting

on VA leadership to rebuild a great medical center.

It has been suggested by the Administration that we re-allocate $1.4 billion of idle

FEMA funds for emergency needs in the affected areas of Hurricanes Katrina and

Rita. In this request, it was suggested that the VA receive $1.4 billion dollars. Of

that $1.4 billion, $1.155 billion was allocated to ‘‘replace the medical center in New

Orleans, Louisiana, and repair and add a bed tower to the medical center in Biloxi,

Mississippi, destroyed as a consequence of Hurricane Katrina.’’ Of the $1.155 billion,

$845 million has been identified for New Orleans replacement and land acquisition

only.

With some coordination with our State medical schools and other partners, I believe we will rebuild a stronger facility. It is crucial that in-patient services return

to New Orleans, not only for the veterans of Louisiana, but for those in the surrounding Gulf region.

In addition to my concerns regarding the rebuilding of our VA system in the Gulf

region, many issues surrounding Priority 7 and 8 veterans weigh heavily on my

mind. Due to their surplus in income, compared to other veterans, they are not eligible for healthcare from the VA and they also pay additional co-payments others are

not forced to pay. I would like to know how the VA plans to tackle these issues concerning this very important group of veterans.

In closing, I thank you for the work you have done so far. The people of Louisiana

truly appreciate your efforts. But, we are far from finished with this enormous task.

What I need from you is a detailed plan laying out how you are going to restore

the Louisiana VAMC, complete with timelines, milestones, and funding details.

With that, I would like to proceed to a few questions.

Chairman CRAIG. Well, Mary, let me cut to the chase on a specific question that I am sure you will want to chime in on because

I think it is reasonable in light of what is being asked at the moment and the circumstances as they are evolving in New Orleans,

with the infrastructure and the support coming out of those two

medical schools that facilitated in large part VA’s capabilities in

the New Orleans area.

So let me ask two questions together. And this is to get to the

point of where we go because Senator Lott has mentioned the $1.2

billion and a substantial amount of that going to Louisiana and

New Orleans. So, in your testimony, you noted that approximately

40 percent of the New Orleans employees have lost their homes

and that a significant number of your staff may choose not to return, and some have retired and all of that circumstance.

So the first question in the context of dealing with the Louisiana

issue and New Orleans would be, given the reality, are you at all

concerned about the ability to staff the new infrastructure that you

are seeking to build in New Orleans?

Now having said that, the President’s supplemental appropriation request identifies $845 million as needed for the construction

of a new VA medical center in New Orleans, and I was one that

looked at that number and went ‘‘wow.’’ At the same time, I know

how costly hospitals are to build as it relates to modern infrastructure and all that comes to a hospital room now, let alone all that

is tied to the broader infrastructure of a hospital.

What is driving the significant costs of the project? What is the

overall reality of what you are looking at, Mr. Secretary, Dr. Lynch,

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as it relates to bringing these services back versus remodeling the

old facility, versus relocating to have the infrastructure available

to meet the services of the veterans of the Louisiana area? Broaden

on that, if you could, please.

Secretary NICHOLSON. I will, Mr. Chairman, and then I will ask

my colleagues to join in, if they care to.

Starting out, the real determination on these things will be driven by what is best for the veterans and those respective veteran

populations. And I am confident in saying that we will end up with

a new veterans hospital in New Orleans.

I cannot tell you what the resultant population of New Orleans

is going to be. We know from our sort of microcosmic experience

that some of our employees who have been temporarily redistributed throughout the system are choosing to stay where they have

been put. We don’t know what our partners in that area are going

to do. What is Tulane going to do? LSU, Charity? Those are right

now unanswered questions.

But we know that, in some configuration, we need a new hospital. We need a hospital in New Orleans. And it appears to us

that we are going to have to build a new hospital, based on our current evaluations of that structure. And ‘‘where’’ is the question, and

whether we would be able to be co-located with other academic

medical facilities, which we desire, which gives that synergy of

services and academic opportunities that good staff doctors want.

And the same is true in Biloxi. I mean, we know that we need

the capacity to serve there, and we have lost capacity because of

the fact that the Gulfport hospital has been obliterated. As Senator

Lott said, there was a plan to expand Biloxi, which is 8 miles away,

to facilitate that before the hurricane happened. We are going to

try to accelerate that planning to make that happen.

Meanwhile, we have temporary clinic facilities and modular

buildings that we are going to site at Biloxi to give that care that

is lost at Gulfport.

Chairman CRAIG. Recognizing that Senator Thune is here, I just

wanted to recognize him as I turn to Senator Landrieu.

And that is why I went to the heart of this question, Mary, because obviously you are intimately involved in it, and it is critical

to you and your constituents. So you had asked a question coming

off from those comments?

Senator LANDRIEU. Well, I just wanted to maybe comment for the

record. I mean, this is a work in progress, and each day, we learn

something more. But just for the record, it is the intention of

Tulane and LSU, those medical schools, to reopen and to function

up to capacity.

They, of course, are quite challenged with the devastation that

has occurred. But our State has every intention of holding those

medical schools there, and it looks like we are going to have to reorder the way the Charity Hospital system—and I think Senator

Lott is more familiar with this than others—but it is a complex of

medical hospitals all in the same area, which brings a lot of synergy and efficiency and sharing and opportunity.

So the veterans actually receive a tremendous amount of care because you have two great medical schools right there. And of

course, New Orleans being a city, it is convenient for people to get

26

to from East and West, North. Nobody comes too much from the

South. A few people out of the water, but mostly East and West

and from the North.

But having said that, Mr. Chairman, this is a real interesting opportunity for the VA to lead the rebuilding of a great medical complex and to do it in a way that serves the whole Gulf Coast, Senator Lott, in a way that is very helpful. Because while we serve a

great region, it is important to have some activities in the BiloxiGulfport area and some to the west of us in Texas to serve that

great region of veterans.

So maybe we could visit a bit and perhaps make a presentation.

But I can assure you the LSU medical center and Tulane medical

center will be open and want to serve the veterans. And perhaps

the State would be willing, Mr. Chairman, to put up some kind of

proposal because we have got to reconfigure the Charity Hospital

building. That building is so old, I don’t think that our State will

be able to rebuild Charity.

So there is a new opportunity. And perhaps a hospital that can be purchased for less than the $850 million that is outlined and do

the right thing by our veterans and do some kind of regional approach now that we have the opportunity.

I am sorry I didn’t come with all of the specific plans, but I do

want to assure you those medical schools are preparing to reopen

and are counting on you all to be a part of that.

Chairman CRAIG. Trent, do you have any additional comments or

questions?

Senator LOTT. What if the Air Force and DOD continues to resist

or they don’t do what we would hope that you could work out with

the Keesler Air Force Base hospital? What are you going to do then

about the medical services that you would be losing at Gulfport if

that facility, in fact, is not continued to be used? How would you

accommodate those veterans?

And with regard to Senator Landrieu, I think that probably now,

we do have, if you have a veteran that is needing heart surgery,

I think they have gone to New Orleans to get that probably. So

there is that sort of thing. The specialties, you know, we have gone

back and forth. We have veterans come from the panhandle of Florida to Biloxi.

But we have got to work this problem out with Keesler, or we

have got to come up with an alternative plan. And we are restricted in what the medical community can accommodate there

along the coast. We were in that bind before the hurricane. That

is one of the reasons why the BRAC Commission took Keesler Air

Force Base hospital, surgery and all, off the list because there was

no place for them to go. So what is going on with the Air Force?

Secretary NICHOLSON. Well, we are having some conversation

with them, Senator Lott. I can’t tell you that I am optimistic it is

going to end up in a collaboration that I think it should. But we

are working on it. And as I said, we have done this now in some

other areas. We just consummated one on the north side of Chicago

with the Navy, and it is a really, really good arrangement for everybody.

If this doesn’t come to pass, we will have to size the Biloxi facility to meet the needs of the veterans in the region.

27

Senator LOTT. Thank you, Mr. Chairman.

Chairman CRAIG. Thank you.

Senator Akaka, questions of the Secretary?

Senator AKAKA. Thank you very much, Mr. Chairman.

Mr. Secretary, in a response to my prehearing questions concerning the fate of New Orleans hospital, it was stated that VA

would maintain some, and I am quoting, ‘‘clinical presence in the

city.’’ Can you explain what that means? Does that mean hospital

beds, clinics, or some combination of the two?

Secretary NICHOLSON. Yes, sir. What that means is that we will

be there, that we are there in a clinical way for people to come and

do outpatient visits. So that we are taking care of if they have a

problem, we diagnose it and treat it in those clinics. We can’t put

them in a bed right there, but we can refer them to one of our facilities if they need more acute care.

Senator AKAKA. As you know, Mr. Secretary, the White House reallocation package includes funding for restoration of medical services, possibly new hospitals and bed towers, and restoring burial

sites, as you have indicated in your statement. I must ask, however, where will funds come from to shore up personnel accounts

to pay all the per diem costs that are being expended on a daily

basis for displaced personnel?

Secretary NICHOLSON. We are accounting for that, Senator

Akaka, and we have put that in our supplemental request for reimbursement.

Senator AKAKA. I was asking that because you haven’t asked for

a supplemental, and I was wondering.

Secretary NICHOLSON. Some of it we expect to be reimbursed by

FEMA because of the emergency.

Senator AKAKA. Mr. Secretary, this is more of a statement than

a question. At a meeting held last week, VA’s chief counsel stated

that you and I, and I quote, and here is the quote, ‘‘are committed

to giving Congress quarterly briefings.’’

I just want to say that in the aftermath of Hurricane Katrina

and with so much at stake, transparency and oversight are essential to ensuring a successfully accomplished mission. And I want

you to know that I look forward to working with you and the

Chairman on these meetings.

Dr. Lynch, I am delighted to have you with us today. It is my

understanding that VA has decided that January 2009 is a target

for award and construction of new clinical facilities in Biloxi, with

some administrative functions lagging until 2010.

With so many veterans having been displaced and their care put

on hold, Dr. Lynch, is this an appropriate timetable, or what can

and cannot be expedited?

Dr. LYNCH. That is an expedited schedule, Senator. The original

construction timelines for Biloxi, and we are fortunate there because of the CARES process. Literally, the week before the storm

hit, we already had a design firm developing concept drawings for

what we might do in Biloxi. So we were ahead of the game before

the storm even hit.

The timelines, original timelines had us completing clinical functions in 2010, probably mid to late 2010. If things go well, we beVerDate 11-MAY-2000 13:06 Jun 13, 2006 Jkt 027353 PO 00000 Frm 00031 Fmt 6633 Sfmt 6601 C:\DOCS\27353.TXT DianeA PsN: DianeA
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lieve we can move that up to early 2009. Obviously, we have to

bridge between now and then.

Part of that is helped by the fact that I think our employees’

home losses mirror the community. Our staff live around the area

and are very representative, and that is probably true of about

most of the home stock. About a third of it is gone, which means

that people aren’t living in those homes now and will be trickling

back in over the next couple of years as they are rebuilt. So we

have a little bit of a breather in terms of the workload.

We are also able to support some of that workload right now by

shifting workload to Jackson for some of the functions. What we

largely lost at Gulfport was some outpatient clinic space, where we

had primary care, things like that. But mainly in terms of in-patient functions was long-term care. About a third of our in-patient

long-term care capacity was at Gulfport. And all of our psychiatric

in-patient care was at Gulfport. That is the part we are going to

try to put back together.

We have a proposal, we are acquiring 30,000 square feet of temporary buildings, which will help us offset some of this, not all of

it. We have also moved. We are using the domiciliary, which was

at Biloxi, after a construction project to make it safe for psychiatric

patients. That will be our psychiatric in-patient center very shortly.

So we are putting together some interim plans. But I think long

term for the community, it is important for us to be able to deal

with all of the needs there. CARES said, and I think this is still

going to be true 20 years out, that we needed to increase services

across the board there, and that is what those projects are designed

to do. And we just need to get there as fast as possible.

Senator AKAKA. Thank you, Mr. Chairman. My time has expired.

Chairman CRAIG. A follow-up question to what Senator Akaka

just asked. So you are telling me that the plans and the timeline

for the plans, because I would have to agree 2009 sounds like a

long way off, are also a part of the growth? I mean, it is an expansion. It is an expansion of existing to meet, to accommodate what

CARES saw as a future need along with the present need. Is that

correct?

Dr. LYNCH. That is correct, sir. And just if there is any fortune

in this, we had those plans on the board before the storm hit.

Chairman CRAIG. OK. Jim, Secretary Nicholson, I recently visited the armed services retirement home here in Washington, DC.

As you know, there are more than 400 residents of the Gulfport facility that were relocated due to the hurricane damage. The President’s supplemental request includes $21 million to

cover the accommodations and living costs of the dislocated residents. Although the homes are considered DoD civil programs, they

are a unique anomaly in the Federal system. I think that is a better way of saying it, but they are part of that civil program.

VA provides health care services to many of the residents of both

the Washington and the Gulfport facilities. Given this fact and the

fact that VA has experiences in delivering the long-term care services that DoD does not, are you involved or do you plan to be involved with DoD in future planning for the Gulfport facility?

Secretary NICHOLSON. I am going to ask Dr. Perlin if he wants

to expand on my response. Senator, to my knowledge, we haven’t

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had a conversation with DoD specifically about the Gulfport

relocatees. But we have addressed it ourselves because it is a matter of concern to us.

And I ask Dr. Perlin, do you have anything to add?

Dr. PERLIN. Mr. Secretary, thanks. We have not had specific conversations about any sort of new relationship there. But as you

know, we are providing a good deal of support to the veterans from

the Armed Forces Retirement Home in Gulfport who are now here

in Washington. Just as a note, many of those veterans had previously used VA for care, and it has been pretty easy for us to care

for them because their electronic health records were automatically

available.

Chairman CRAIG. OK. Mary, additional questions?

Senator LANDRIEU. Can I just ask a few more questions? And I

am sorry, this may be in your testimony. But before the hurricane,

what were the general plans for the New Orleans veterans hospital, basically to stay and grow?

And the facility, I have been there many times, is in fairly decent

shape. But tell me, Mr. Secretary, what were your plans before the

hurricane for that facility?

Secretary NICHOLSON. Well, we were very pleased with that hospital. It was busy and doing a fine job and had planned for it to

continue on in that mode.

Senator LANDRIEU. And I understand, because I am familiar with

the general flooding, that it was just flooding through the first floor

of that area, basically. Electric systems and such, some mold concern?

Secretary NICHOLSON. Yes, it has a sub-basement and a basement, and those two sort of below-grade levels got most of the

water. But it damaged, it wiped out the elevator service, the electrical service to the building. Some of the dietetics were affected

there, and the generators, so that our emergency electricity system

was jeopardized but never fully taken out.

Senator LANDRIEU. Now you know that has been true of many

buildings in New Orleans and the region. Have you had a rough

estimate of what it would be just to repair and fix and get the hospital open? Do you have an estimate of that cost?

Secretary NICHOLSON. Well, we have plans to use as a clinic part

of that building right now. I will ask Dr. Lynch, because he is

working on that on a daily basis, to give you more detail.

Senator LANDRIEU. But like, Doctor, if you had to open the hospital and forget the fact that you don’t have housing and all of

that. I am familiar with it. But if you had to open that hospital like

within 30 or 60 days, have you estimated what it would cost to just

get it back open and functioning up to the level it was before the

storm?

Dr. LYNCH. We don’t have a final estimate.

Senator LANDRIEU. Do you have a rough estimate? Is it a portion

of this $800 million for total replacement cost?

Dr. LYNCH. It would be less than $800 million.

Senator LANDRIEU. Do you think it would be 50 percent of the

new cost estimate or less, or you don’t know?

Dr. LYNCH. I would just be guessing, but probably somewhere in

that ballpark. Regarding the Secretary’s comments, our plans to

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move back into the building in December with a clinic, the building

is really a series of constructions. The oldest part of the building

is early 1950s where the beds are, the bed tower, if you will.

An addition, which includes the parking garage, and on top of

the parking garage sits a two-story nursing home. It weathered

both the storm and the effects of the flooding very well, and we

were able to lift air conditioning onto the roof of that and plumb

it down into the building.

After we restore electricity and once we restore the elevators,

people will be able to park in the garage and have direct access to

the nursing home without having going into the building, where we

could continue to do repairs, construction as necessary. Which it

just works out that will enable us and the space lends itself to

being converted to a clinic fairly easily. It is ample space.

So we will actually be able to get that part of the building online

by December. But just getting the fire safety systems, elevators,

the air conditioning, beginning to drop the humidity in the rest of

the building and what have you before you repair any of the other

damage is going to cost us close to $25 million just to do that.

Senator LANDRIEU. My question is are all of you happy with the

building and the location? I mean, there is ample land around

there and ample medical partners that a new facility could be constructed in partnership with the city or the State.

Have you all had any conversations with the State of Louisiana

Recovery Authority, and if you could just brief me? I don’t want to

take too much of the time. But a minute of briefing on at least the

initial conversations with the LRA?

Secretary NICHOLSON. I will take the first response, Senator, and

say, yes, we’re very interested because we think it is critical to be

appropriately co-located with Tulane and LSU. So part of our decision, I think, will be driven by what they decide to do, and whether

or not they stay in the area, and would then be persuasive to us

to justify spending the kind of money that will be required to restore that rather old facility that we have there.

Senator LANDRIEU. Well, Mr. Chairman, with that, I am going to

leave it there and just commit to work with you. And perhaps because of this very strong and longstanding partnership between

Tulane and LSU and the veterans center, and I mean they are literally right next to each other and have been for decades, that perhaps we could facilitate a meeting with the LSU and Tulane because they are making decisions now.

And I am led to believe that they are going to stay right where

they are and rebuild. Of course, they have got financial challenges

like we all do. But perhaps we could do that, and I could include

the Chairman and the Ranking Member in those informal discussions, or your staff.

Chairman CRAIG. I appreciate that comment. I think those are

very legitimate discussions, whether you remodel an old facility

and bring it back online, or if you build something new.

And of course, the partnerships VA has with private medical

schools and facilities is fundamental. It is valuable to both sides of

that equation in a very real way. For the students themselves, for

the services that are rendered, for the costs of operation at the VA

center, for the quality of health care, all of that fits nicely. And it

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appears to me that the New Orleans facility was really a regional

facility of some magnitude, and we see, of course, that kind of

partnering going on.

So, no, I think you are absolutely right. Those kinds of conversations for final decisionmaking, either way we cut it, a lot of money

is going to get spent and needs to be spent. And it needs to be

spent, clearly, with an eye toward the future and future services

along with current services. So we appreciate that greatly.

Let me ask this question, and maybe Dr. Lynch could respond to

it. We are going to do accelerated CBOCs you mentioned in Slidell

and Hammond and, let us see, one other one. Anyway, the Slidell

one appears to be almost on the border, is it not?

Dr. LYNCH. It is pretty close to the border, sir. But it is only 20

miles from downtown New Orleans. It is really a suburb of the city

of New Orleans.

Chairman CRAIG. Well, I guess it is, isn’t it? I was just wondering how much service you get cross border. Does it serve a portion of Mississippi or Mississippi patients?

Dr. LYNCH. It will probably draw some patients from Mississippi.

It is not open yet, but it almost certainly will when it is open.

Chairman CRAIG. What is the timeline on that, do you know?

Dr. LYNCH. We are hoping to have them opened in the first part

of 2006.

Chairman CRAIG. 2006.

Dr. LYNCH. Subject to contracting and things like that. That is

sometimes out of our control.

Chairman CRAIG. OK. Danny, additional questions?

Senator Akaka.

Senator AKAKA. Thank you very much, Mr. Chairman.

My questions have been answered. I just want to say that I am

proud of what our VA administration is doing there. You are meeting the challenges, and you are working on it. It appears to be

something that we can work on together, and it seems as though

we will.

Again, proud to mention that I am looking forward to quality

briefings, and we can also talk as well there. But thank you for

what you are doing. And I want to wish you well, and you can feel

that we want to work with you to help the cause.

Thank you.

Chairman CRAIG. Mr. Secretary, this may well be my last question because part of the dialog that we had going on with both of

the S enators from Louisiana and Mississippi I think answered

some of our questions and some that I had prepared or staff had

prepared.

VA briefed my Committee about a new Office of Strategic Initiatives, which is tasked with forecasting demand, market delineation,

cost estimates for the use in CARES implementation. It seems to

me that this is the same kind of analysis that is needed along the

Gulf Coast before we begin building.

Have you considered using this new Office of Strategic Initiatives

to assist VA’s internal Gulf Coast Planning Group with its work?

Secretary NICHOLSON. Yes, we have, Mr. Chairman. As has been

touched on here at least, there are a lot of variables in these

things. For example, when we consider whether or not to try to reVerDate 11-MAY-2000 13:06 Jun 13, 2006 Jkt 027353 PO 00000 Frm 00035 Fmt 6633 Sfmt 6601 C:\DOCS\27353.TXT DianeA PsN: DianeA
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habilitate the New Orleans hospital versus reconstructing one, a

very big piece of that is life-cycle costs.

What is the maintenance and operation cost of a rehabilitated

old hospital versus building a new one? And what is the return on

that investment in the new one because, obviously, it would be run

much more efficiently. And that is part of what we are doing in

this whole process.

Chairman CRAIG. Well, let me thank all of you for the work that

is under way. And I agree with Senator Akaka. Being kept abreast

of all of this will, in the long term, result in a good deal less frustration or problems that arise by the uninformed legislator, who

may hear one thing coming from a constituent, when, in fact, the

plan is quite the opposite.

And here we have a very unique opportunity to not only rebuild,

but build a first-class service. I shouldn’t say build a first-class

service. Build a new service that continues a first-class service

across a region that obviously will need service.

Tragically enough, these kinds of opportunities don’t come along

very often, thank goodness. But when they do, we ought to look far

enough out into the future that we are not just simply replastering

over old plaster when, in fact, a different approach can do as you

suggest, with life cycle, services, and our needs and all of that.

So we thank you very much. That was part of the reason that

I wanted to initiate this hearing and begin this dialog as you are

planning and working so that we keep everybody well abreast of

it.

And also, as it relates to dealing with the retirement center facility, that is an anomaly. It is a unique situation that exists in part

because of history, and I am not sure that this may not be an opportunity in time to readjust its relationships that would continue

to serve that particular type of retiree within our military services.

So, gentlemen, thank you very much for being with us today.

Secretary NICHOLSON. Thank you, Mr. Chairman.

[Whereupon, at 3:19 p.m., the Committee adjourned.]

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