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37–312 2008

[H.A.S.C. No. 110–16]

HEARING

ON

NATIONAL DEFENSE AUTHORIZATION ACT

FOR FISCAL YEAR 2008

AND

OVERSIGHT OF PREVIOUSLY AUTHORIZED

PROGRAMS

BEFORE THE

COMMITTEE ON ARMED SERVICES

HOUSE OF REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

MILITARY PERSONNEL SUBCOMMITTEE HEARING

ON

MILITARY HEALTH-CARE BUDGET AND

THE CHALLENGES FACING THE MILITARY HEALTH-CARE SYSTEM

HEARING HELD

FEBRUARY 13, 2007
(II)

MILITARY PERSONNEL SUBCOMMITTEE

VIC SNYDER, Arkansas, Chairman

MARTY MEEHAN, Massachusetts

LORETTA SANCHEZ, California

SUSAN A. DAVIS, California

NANCY BOYDA, Kansas

PATRICK J. MURPHY, Pennsylvania

CAROL SHEA-PORTER, New Hampshire

JOHN M. MCHUGH, New York

JOHN KLINE, Minnesota

THELMA DRAKE, Virginia

WALTER B. JONES, North Carolina

JOE WILSON, South Carolina

DEBRA WADA, Professional Staff Member

JEANETTE JAMES, Professional Staff Member

MARGEE MECKSTROTH, Staff Assistant

JOE HICKEN, Staff Assistant
(III)

C O N T E N T S

CHRONOLOGICAL LIST OF HEARINGS

2007

Page

HEARING:

Tuesday, February 13, 2007, Fiscal Year 2008 National Defense Authorization

Act—Military Health-Care Budget and the Challenges Facing the Military

Health-Care System ............................................................................................. 1

APPENDIX:

Tuesday, February 13, 2007 ................................................................................... 33

TUESDAY, FEBRUARY 13, 2007

FISCAL YEAR 2008 NATIONAL DEFENSE AUTHORIZATION ACT—MILITARY HEALTH-CARE BUDGET AND THE CHALLENGES FACING THE

MILITARY HEALTH-CARE SYSTEM

STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

McHugh, Hon. John M., a Representative from New York, Ranking Member,

Military Personnel Subcommittee ...................................................................... 1

Snyder, Hon. Vic, a Representative from Arkansas, Chairman, Military Personnel Subcommittee ........................................................................................... 1

WITNESSES

Winkenwerder, Hon. William, Jr., MD, MBA, Assistant Secretary of Defense

for Health Affairs, Department of Defense ........................................................ 2

APPENDIX

PREPARED STATEMENTS:

McHugh, Hon. John M. .................................................................................... 39

Snyder, Hon. Vic ............................................................................................... 37

Winkenwerder, Dr. William, Jr. ...................................................................... 42

DOCUMENTS SUBMITTED FOR THE RECORD:

[There were no Documents submitted.]

QUESTIONS AND ANSWERS SUBMITTED FOR THE RECORD:

Mrs. Drake ........................................................................................................ 67

Mr. McHugh ...................................................................................................... 66

Dr. Snyder ......................................................................................................... 59

(1)

FISCAL YEAR 2008 NATIONAL DEFENSE AUTHORIZATION ACT—MILITARY HEALTH-CARE BUDGET AND

THE CHALLENGES FACING THE MILITARY HEALTHCARE SYSTEM

HOUSE OF REPRESENTATIVES, COMMITTEE ON ARMED SERVICES, MILITARY PERSONNEL SUBCOMMITTEE, Washington, DC, Tuesday, February 13, 2007.

The subcommittee met, pursuant to call, at 2:04 p.m., in room

2212, Rayburn House Office Building, Hon. Vic Snyder (chairman

of the subcommittee) presiding.

OPENING STATEMENT OF HON. VIC SNYDER, A REPRESENTATIVE FROM ARKANSAS, CHAIRMAN, MILITARY PERSONNEL

SUBCOMMITTEE

Dr. SNYDER. The committee will come to order.

We are pleased today to have as our guest Dr. Winkenwerder,

who is—we are all familiar with him and he is familiar with us

after almost six years of time in this position.

We certainly appreciate your service, Dr. Winkenwerder.

I just want to be real brief and not read a formal opening statement before I yield to Mr. McHugh, but the issues that we continue

to address as a committee and as a Congress and as the American

people is how do we maintain the quality of care for our men and

women in uniform and their families and retirees and how we pay

for it.

And we are looking for your guidance and advice and thoughts

on that, Dr. Winkenwerder, and I look forward to your testimony

and the questions and answers we have.

As I mentioned before, we have three members of this committee

that have never served on the Armed Services Committee before

and are new to this Congress, and we have some veterans, but we

all benefit from as complete an explanation as you want to give as

to any of the issues coming forth.

And, with that, I will yield to Mr. McHugh.

[The prepared statement Dr. Snyder can be found in the Appendix on page 37.]

STATEMENT OF HON. JOHN M. MCHUGH, A REPRESENTATIVE

FROM NEW YORK, RANKING MEMBER, MILITARY PERSONNEL SUBCOMMITTEE

Mr. MCHUGH. Thank you, Mr. Chairman.

Doctor, welcome. I echo the chairman’s comments and deeply appreciate, as well, your leadership over the years. It is always a
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pleasure to have you with us. And, as Chairman Snyder said, we

look forward to your comments.

I, too, will ask for unanimous consent to have my statement

placed in the record.

Dr. SNYDER. Without objection.

Mr. MCHUGH. But I have just a couple of comments.

Obviously, as the chairman and I have discussed, there is, as

there was last year, some considerable imputed savings and components of this budget proposal placed in predicated upon congressional action, about $2.1 billion, which also has to do with expected

so-called savings and other kinds of fiscal advances by the upcoming Task Force on Military Health Care that is looking at these

kinds of issues.

That was a proposal that was not well-received last year—is that

a fair way to say that? I think it is—in the Congress, and that is

a lot of money. And we would like to hear from you, of course, as

to how you came to that point again. I am kind of troubled by it.

Also, with about $157 million, I believe the figure is, in requested

increases to fund a continuation of the military to civilian transformation, about 2,700 positions—we have gone through a big

chunk of that, over 5,500. We have to begin to become somewhat

concerned that we are not reaching too far on that. So I look forward to your comments on that, as well.

But, beyond that, as the chairman said, we look forward to your

comments.

And with that, Mr. Chairman, I yield back to you.

[The prepared statement of Mr. McHugh can be found in the Appendix on page 39.]

Dr. SNYDER. Thank you, Mr. McHugh.

One little bookkeeping—no, ‘‘bookkeeping’’ is not the word—etiquette thing. We had a question last time about how members are

recognized for questions. And traditionally on this committee, you

know, comes down the gavel, we go back and forth by party. But

then from there on, it is whoever shows up in the order in which

they come in, regardless of party affiliation—has been the way this

committee has conducted its business.

And that is the way we will do it, if that is all right with Mr.

McHugh.

Mr. MCHUGH. Absolutely. It is tradition.

Dr. SNYDER. Dr. Winkenwerder, take as much time as you need.

STATEMENT OF HON. WILLIAM WINKENWERDER, JR., MD,

MBA, ASSISTANT SECRETARY OF DEFENSE FOR HEALTH AFFAIRS, DEPARTMENT OF DEFENSE

Dr. WINKENWERDER. Thank you. And I can hear that my microphone is on, so, Mr. Chairman, thank you, and thank you to all the

members of this committee for the opportunity to discuss the nation’s military health system now and in the future.

And thank you for your tremendous support and steady support

over the years that I have been in the fortunate position to be able

to lead this system and to serve all the great Americans that we

serve.
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Today, we serve and protect more than 2.2 million service members in the active, reserve and national guard components, including more than 250,000 who are deployed overseas.

America’s military health system is unquestionably the finest in

the world. Our medical professionals have performed superbly on

the battlefield. I want to just recount a few facts for you in that

regard.

We have the lowest death-to-wounded ratio and the lowest disease-and-non-battle-injury rate witnessed in the history of warfare.

Once we put that dedicated, trained, professional on the scene, a

remarkable 97 percent to 98 percent survive.

Also, remarkably, among the approximate, at this point in time,

23,000, give or take, service members in Iraq to date who have

been wounded, over 70 percent have returned to duty within 72

hours—that is, within three days.

My priority remains to provide life-enhancing, life-sustaining

care to America’s service men and women, both deployed and here

at home, and to simultaneously sustain the high-quality healthcare system that we offer to more than nine million Americans.

Today, what I would like to do is briefly touch on three items of

concern to me and our leadership: first, our fiscal year 2008 budget

and critical near-term financial issues; second, the long-term plans

to strengthen our health system; and third, our efforts to provide

an even more integrated joint health-care delivery system.

With our fiscal 2008 health-care budget estimate of about $40

billion, we have submitted legislation, as you know, to assist in

bringing our rapidly growing costs under better control. It is best

to view this proposal as a placeholder. It reflects the magnitude of

the department’s growing health-care problem.

We believe that the members of the recently established Task

Force on the Future of Military Health Care should have a completely free hand in making their recommendations that address

the sustainability of military health care and the TRICARE benefit.

The thinking of these military and civilian experts brings, in our

view, a welcome and fresh perspective to the potential solutions for

our cost-growth issues.

As they have begun their work, the task force members now realize that the majority of Department of Defense (DOD) health

spending is for retirees and their family members, who make up

more than half of our eligible beneficiary population. By 2011, retiree health spending will dominate DOD health spending, with 65

percent of all dollars going for retirees.

We need help in addressing this problem and help in educating

our beneficiaries and advocacy groups with a fresh and welcome

look.

You, America’s representatives, have heard these numbers before, but let me restate them. Left unchanged, our program will

cost taxpayers $64 billion by 2015. Health-care costs will continue

to consume a growing slice of the department’s budget, reaching 12

percent of the DOD budget, versus 6 percent in 2001.

Without relief, spending for health care will, in my judgment, divert critical funds needed for war-fighters, their readiness and for

critical equipment.
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I hope you are as eager as I am to see how the experts of the

task force, with their original and their earnest views on the issue,

how they assess our situation and what they will recommend.

Again, we are very open to whatever it is that they recommend and

trust the good judgment that they are bringing to the task.

In the meantime, we are doing everything we can to control our

cost growth. We are also executing our new TRICARE regional contracts more efficiently, saving dollars, and we are demanding greater efficiency within our own military medical facilities.

However, there is one area, pharmacy, that is particularly noteworthy. Nearly 6.7 million beneficiaries use our pharmacy benefit,

and in fiscal 2006, our total pharmacy cost was more than $6 billion for that year alone. If we did nothing to control our pharmacy

cost growth, we project pharmacy costs alone would reach $15 billion by 2015.

We are taking every action for which we have authority: promoting our mandatory generic substitution policy, joint contracting

with the Veterans Administration, launching a mail-order promotion campaign, and making voluntary agreements with pharmaceutical manufacturers to lower the cost.

These efforts are working, but recent legislation passed by Congress and other regulations limit our ability to control costs in the

fastest area of pharmacy, and that is the retail sector. In retail,

products cost us 50 percent more than the same drugs dispensed

through our military treatment facility or through mail-order. That

is 50 percent more.

You can help us, we believe, by allowing the department to make

appropriate changes in the structure of our pharmacy benefit.

These changes will clearly accelerate use of our new mail-order

and, we are calling it, our home-delivery pharmacy program, enhance the use of generics, and it will also give us greater leverage

when negotiating with the pharmaceutical manufacturers.

Another area on which I want to update you is our effort to better integrate our health-care delivery system. Our line leaders, the

Joint Chiefs of Staff and our customers world-wide expect that we

will operate in a more joint manner throughout the world.

We are doing that in combat theaters today, and we are doing

it in the seamless transfer of our wounded or ill service members

from the jointly staffed medical center in Landstuhl, Germany. You

have heard about these efforts.

We are now preparing to bring the advantages of joint operations

to our medical facilities in the United States.

Based on the decisions made by the previous Congress to accept

the Base Realignment and Closure Commission recommendations,

the BRAC recommendations, we are moving forward with the consolidation of medical facilities here in the national capital area and

in San Antonio. We are also consolidating operations in medical research and development and in education and training.

The medical infrastructure we are creating will better serve our

beneficiaries through improved access to care, by locating primary

care services closer to our patient population, through enhanced

graduate medical education, through joint military medical enlistee

training, and through the creation of, in our judgment, the world’s
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best military medical facility, the new Walter Reed National Military Medical Center on the Bethesda campus.

I remain deeply honored to work with the military medical officers, civilians and enlisted personnel and our support contractors,

who provide exceptionally high-quality medical care to our service

members while our nation is at war.

We are giving our best effort to care for both the physical and

the mental wounds that war produces. And we are succeeding in

saving lives while helping many of our wounded warriors to be able

to continue their careers in the military and continuing on active

duty.

I look forward to building upon many successes, to creating an

even better, more efficient health-care system for the future.

I know that you, Mr. Chairman, and other members of this committee have a similar vision. Working together with us and carefully considering the recommendations of the task force, I believe

we can make military medicine stronger than ever for our deserving beneficiaries.

And let me say this: Decisions we must make may not always be

easy or politically expedient. But they will be the right decisions

if they create the solid fiscal foundation for the future that will

allow our great and talented professionals to continue providing

world-class care for today’s and tomorrow’s protectors of America.

Thank you again, Mr. Chairman and members of this committee,

for your support for the men and women in uniform and for our

military health system. We look forward to working with you in the

coming year, and I look forward to answering your questions today.

Thank you.

[The prepared statement of Dr. Winkenwerder can be found in

the Appendix on page 42.]

Dr. SNYDER. Thank you, Dr. Winkenwerder, for your statement.

Debra is going to put the five-minute clock on me, and then we

will go to Mr. McHugh for as much time as he will take, and then

we will go around. And almost for sure, we will come back around.

We don’t have any more votes today, Dr. Winkenwerder, so we

may have you until the thaw, until the spring thaw. [Laughter.]

Dr. Winkenwerder, you have been outspoken in your views about

how we need to pay for this. And you have run into both the realities of how we pay for the system but also perhaps the political realities of grappling with those issues. And you talked about it again

today, both in your written and your oral statement.

Last year when we had this discussion, you gave us a fair

amount of written materials in terms of numbers and charts and

graphs, and you haven’t done that this year. And are you planning

to provide us with that kind of numbers analysis so we know where

you are at?

I mean, part of what you gave us, you know, last year and what

your charts showed last year were that, for military care and direct

care, the number was very reasonable, in terms of being not quite

a flat line but almost a flat line.

Are you planning to provide us additional information on the status of your budget so that we might analyze that?

Dr. WINKENWERDER. Yes, we would be glad to provide any information that would be helpful to you.
6

Let me just say, in terms of what we are terming the

‘‘placeholder legislative proposal,’’ to us it is not so important as to

what the specifics of the solution or solutions are as it is the decision, and decisions, to move forward to make some necessary

changes.

And we did not believe that it would be appropriate to come forward with a detailed, either, continuation of last year’s proposal or

a modification of that, because we felt that that would be, in fact,

directing the task force to one solution or another.

And so, candidly, we just didn’t want to try to say, ‘‘Here is the

solution,’’ or there it is——

[The information referred to can be found in the Appendix beginning on page 59.]

Dr. SNYDER. No, I understand.

Dr. WINKENWERDER [continuing]. And so we have been rather generic.

Dr. SNYDER. I understand. What I am——

Dr. WINKENWERDER. And that has been our approach.

Dr. SNYDER [continuing]. More concerned about is that if you can

provide us with your analysis this year about where we are at.

Dr. WINKENWERDER. Yes.

Dr. SNYDER. And I understand what you are saying.

Dr. WINKENWERDER. Okay.

Dr. SNYDER. And you did that last year, but you haven’t this

year, and I think it is important to have that.

Dr. WINKENWERDER. We will do that.

Dr. SNYDER. The second question I want to ask you—and you

have probably heard that I did this with Secretary Gates the other

day. But in the President’s budget, there was a reference made to

the future military health-care task force.

And this is the line from the President’s budget proposal: ‘‘In fiscal year 2008, this budget includes $1.862 million in proposed assumed savings, which assumes enactment of a $719 million legislative proposal and additional regulatory modification requiring further study and a recommendation be made by the Department of

Defense Task Force on the Future of Military Health Care, established by Public Law 109–452, on benefit reform.’’

Mr. McHugh continues to ask the most insightful questions at

the full committee and brought this up the other day, and I had

the staff chase down this one and asked Secretary Gates about it,

because there are two aspects of it.

Number one, the budget is saying flat-out a recommendation be

made on a task force whose final report doesn’t come out until December of this year. And some of us think that that is not very appropriate, to base a number or savings on a task force’s opinions,

its recommendations, that are not even expected to be out—now,

they are going to do some preliminary stuff, but their final report

doesn’t come out until December.

Second, this statement has poisoned the water a bit for this task

force. And there are folks in this community, you know, who care

a great deal about military retirees and veterans and folks in the

military that look on that language as a sign you have stacked the

task force. And I am telling them, ‘‘Give it a chance.’’
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And I have talked with some of the leadership of the task force

who are very concerned, and I said, ‘‘Look, you just go on out there

and do your business. It is not the expectation of Congress that

somehow your goal is to provide a recommendation for this year.

You do the work as you see it.’’

So would you respond to those concerns, please, about this language in the President’s budget?

Dr. WINKENWERDER. Yes.

First of all, we have not, nor do we think it would make good

sense, to ‘‘stack’’ the task force. That just is not in anybody’s interest. It is a bipartisan group, for starters, and there was a special

effort to ensure that. There was an effort to ensure that there was

a variety of views.

I think we know, as you do, that the solution, or solutions, are

ones that are going to have to result from agreement across the

aisle. There is not going to be, you know, a Republican solution or

a Democrat solution. It really is going to require coming together.

And so, that is the first point. And it is going to require even beyond the political spectrum to all the various different constituencies. That is the nature of our program. There are a lot of stakeholders in our program. We realize that. And so, the views and perspectives of all of those stakeholders need to be represented.

It was not our goal to poison the water in any way. I hope that

is not the case. I believe it will not be the case, because we have

been clear that, from the department’s standpoint, we are only supporting the task force in terms of providing whatever data, whatever information, reports, studies, analysis, that they request. And

that is it.

We are not, you know, behind the scenes trying to do anything

other than that. I mean, the people that are on the group speak

for themselves. They are strong-minded, strong-willed, very bright

individuals, as you know. And I have full confidence they are going

to say whatever they think.

Now, at this point, I think our task is to look at what they

produce.

And to your question about the interim versus final, it is our understanding that they do intend to issue some sort of interim report

in May. That would not be the final report.

But we also understand that they have prioritized the issues and

that financial and funding and sustainability issues are at the top

of their priority list. I understand they are probably going to take

on some other things during this first three or four or six months.

But it is our hope, certainly, that they would be able to come forward with some ideas that we could talk about. And candidly, I

think many of us know what the potential solution set is. The question is, can we gather around to make some decisions in a way that

we can all stand behind?

Dr. SNYDER. I agree with your comment about the strong wills.

They were pretty strong-willed in their expression about that language.

Dr. WINKENWERDER. Yes.

Dr. SNYDER. Mr. McHugh, for as much time as he needs.

Mr. MCHUGH. Put me on the clock, if I may, Mr. Chairman, too.

If it is good enough for you, it is good enough for me, by golly.
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I would say, Dr. Winkenwerder, with respect to the chairman’s

comments about you maybe being here to the spring thaw, you had

better hope that doesn’t apply to my district, because we have had

12 feet of snow in the last week. [Laughter.]

So I would take it a little bit easier on you than that.

I would like to pursue this a little bit further. I don’t know if it

has poisoned the well with respect to the task force, but, as I am

sure you know, it has not made a number of them happy.

You have changed your testimony in the last few hours, at least

as far as we know, and used an important word: ‘‘placeholder.’’ It

wasn’t there originally. And that is an important change.

But despite that word change, the fact of the matter is the budget request assumes savings of $1.9 billion.

I appreciated your comments about—and there is over $240 million of other undefined initiatives, and if you want to share some

information about what those might be, that would be helpful as

well.

But your comments suggest that you are not just going to accept

everything the task force says, I assume, number one.

And number two, what if they come back with no savings? I kind

of doubt that is going to happen, but it is within their parameters.

What do we do about the $1.9 billion? Do you have a backup plan

to fully fund it, or do you have a cut list? That is a lot of money.

Dr. WINKENWERDER. It is. And, yes, we do have some approaches

that we would and could take.

Mr. MCHUGH. Could you share those with us?

Dr. WINKENWERDER. Well, as you would guess, they are fairly

dramatic in terms of their impact and what they would require. It

is not our preference to move in those directions.

Our preference is to get the whole train moving forward—and

the train with lots of cars being the Department of Defense, Congress, beneficiary advocacy groups, the task force—with the task

force giving us, we hope, wise, informed, even-handed, prudent advice.

And I just have confidence that we will be able to stand behind

and support their recommendations. And I will be very surprised

if their recommendations are not recommendations that we can

support.

I am confident, as well, that their recommendations are going to

carry a lot of weight with all the audiences, because of the nature

of the people that have been brought together. And they are not all

of one mind. I am sure about that. There are a lot of different

views there.

But I think whatever they come up with is something we are

going to have to look at very, very carefully.

Mr. MCHUGH. Well, I agree. This is our one oversight hearing.

And at the risk of sounding inhospitable, I think it is important for

the committee members to hear and for the record to show if we

don’t come to that figure, what happens?

Dr. WINKENWERDER. The department, as it has in times past,

will have to work within its own constituency to figure out how to

solve these problems and issues——

Mr. MCHUGH. Will you agree it wouldn’t be pretty?

Dr. WINKENWERDER. I am sorry?
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Mr. MCHUGH. It would not be pretty. We are going to have

to——

Dr. WINKENWERDER. It could be tough.

Mr. MCHUGH. I mean, the mathematics are pretty simple. I was

not a math major, but you are either going to have to find a huge

amount of cuts or some kind of rabbit out of a hat. True?

Dr. WINKENWERDER. It is going to be tough. It would be tough,

there is no question. It would be very difficult.

But I will say this, and I think it is important for the committee

to hear this: We looped back after last year’s experience with our

civilian leaders, with our military leaders—the vice chiefs, the

chiefs, the vice chairmen, the chairmen—everybody. And I think

what you are seeing is a statement of how convicted especially our

military leaders are about this issue. And it is a statement about

the degree to which they view the significance of the problem.

And that is not something I could have done, you know, on my

own, or that Dr. Chu and I could have done. I mean, this had to

be a department view, because people realize that it is a serious

proposal that has been put forward.

Mr. MCHUGH. Absolutely. And let me just say, with the few seconds I have left, I do not mean to suggest for a moment that you,

as an individual or your department in both the Pentagon and the

individual services, are trying to do anything but what is absolutely right for these troops.

But I just think it is critical for all the members to understand

you have the nearly $2 billion worth of—in fact, over $2 billion

when you add in the other $248 million—of undefined savings.

That is a huge number to come up to.

And if we don’t come up to it through the task force or through

something else that you or we or someone does, you are going to

have to take $2 billion-plus out of the military health-care program. That is the reality. And that is a tough budget to bring to

this Hill.

Dr. WINKENWERDER. You are right.

Mr. MCHUGH. Okay. Thank you, sir.

Thank you, Mr. Chairman.

Dr. SNYDER. Ms. Shea-Porter.

Ms. SHEA-PORTER. Thank you.

I have a couple of questions. I am new, and I am trying to determine the cost of soldiers in the field versus soldiers that are not

being deployed, and wondered if you could first tell me that.

Dr. WINKENWERDER. If your question is about the cost of our ongoing operations in Iraq and Afghanistan——

Ms. SHEA-PORTER. Yes.

Dr. WINKENWERDER [continuing]. As a result of the global war,

it is around $1 billion. It is a bit over $1 billion this year.

And let’s see if I have the numbers here.

In 2007, it is $1.73 billion. That is this year. Last year was actually a bit more than that in the supplemental, $1.153 billion.

And that covers a number of things: health care for mobilized

guard and reserve who have to come forward to perform duties;

pre- and post-deployment health care; additional things we do for

people before and after deployment; something we called medical

backfill, in other words, when we deploy service medical profes-
10

sionals and we have to fill for them back here in the United States,

typically through call-up of guard and reserve or by purchasing

care in our network; other medical support; and then aeromedical

evacuation.

Those are the main components, but that is roughly what the bill

is in the aggregate.

Ms. SHEA-PORTER. Okay. And these are obviously huge numbers,

but I wondered if you could tell me what the cost would be per soldier, the average soldier. I recognize that, you know, there are different levels of health care required, and some injuries and some

not, but just in general.

Dr. WINKENWERDER. We don’t actually keep track of our costs in

that way. We do have a good idea, a very good idea, of what it costs

per person, per month. That is typically our cost accounting structure here in the United States for an active-duty person, for a family member or for a retiree.

Of course, that amount tends to increase with age and illness

and medical condition. And that number has grown. On average,

in the early 2000 period it was growing in double-digit figures.

More recently, it has grown at about seven percent or eight percent

between last year and this year.

But that number is—I don’t have it in the back of my head, but

it is $200-plus per person, per month. That is roughly what it

would be. It is probably somewhat less than that in theater because the folks are healthy, by and large, and therefore should be

less expensive.

Ms. SHEA-PORTER. Then if we have an escalation, you would not

be able to say how much more money would have to be allocated

to cover the new troops.

Dr. WINKENWERDER. The additional troops that would result

from any change in deployment strategy—whatever it is, I would

wager an estimate that the cost of that would not be considerable,

because we already have a fixed infrastructure there.

There would probably be some additional medical support that

would be needed, but we already have a fixed infrastructure that

has capacity.

Ms. SHEA-PORTER. I, too, am worried about this efficiency savings, et cetera. That doesn’t look tangible to me right now.

I also wanted to ask you about the mental health part of your

budget. I am actually quite surprised to see the number of soldiers

who have already accessed health care for post-traumatic stress

syndrome (PTSD). And if Vietnam is any indicator of what we can

be looking at, this is a higher number that are seeking help already.

But taking this out a year, two years and five years hence, are

you seeing a great surge in the cost to provide health care? That

is the first question.

And the second question that I had was I have been told there

are soldiers in theater who are being left behind on patrols because

they have post-traumatic stress syndrome, and they are not receiving medical treatment for that. And I wanted to ask you if you

could address that.
11

Dr. WINKENWERDER. Sure. The first part has to do with what we

are seeing with respect to mental health trends and PTSD and

other similar kinds of issues.

We are spending more money. Our systems and reports tell me

that the number of visits on an outpatient basis, the number of

hospitalizations, the amounts that we are spending on pharmaceuticals are all going up for mental health services.

Some of that is driven by the same kinds of things that are driving health-care trends upward more generally. Some is driven by

the fact that we have a greater population that we are caring for

today than we did in 2001 or 2002. I am comparing, let’s say, 2002

versus 2006, the most recent year.

And what we find is that the rate of outpatient usage has gone

up about 20 percent. The rate of inpatient usage is roughly the

same. The rate of pharmaceuticals has gone up about 50 percent.

But if you look at our total expenditures and how much is going

for mental health four years or five years ago versus today, it was

about 8.6 percent four years or five years ago. Today it is like 9.5

percent. So it has gone up a little bit as a share of the aggregate.

And we are actively—that does not bother us. In fact, in my way

of thinking, it is a good indicator because we are trying to reach

out, expecting that people are going to have some mental health

problems, and so we know we are actually promoting and incurring

a certain higher use because of the things we are trying to do to

help people. So that is a good thing, we believe.

If I might say one other thing in terms of the rates of PTSD, because there is a lot of discussion and, frankly, there are a lot of

things that are said out in the public, in the airwaves and the

media, that are inaccurate, at least based on all the good data that

we have.

The best data are studies that have been published involving

military research that have been published in the New England

Journal and other very reputable medical journals that suggest

that the rates are in the range of 10 percent, 12 percent among our

redeployers coming home. It is not half of all the people that are

coming back; it is a fraction. And those are the facts of what we

are seeing.

Now, the other thing is that the way that most people respond

who do have PTSD-type symptoms is they tend to have them for

a period of time and, especially if they get some support and help

and counseling, those symptoms resolve.

For many people, they will resolve even without that. But our effort is to identify people, to support them, to help them.

But the percentage of people who have chronic, debilitating

symptoms and what you might call chronic post-traumatic stress

disorder is really a pretty small number. I mean, it is in the low

single digits based on the information I am familiar with.

But I believe that our goal, our objective, should be to help every

single person who has—whether it is PTSD, anxiety, depression, or

is having problems with relationships or substance abuse—to reach

out and identify those people early and to get help for them before

they do things that could be really damaging to themselves, to

their loved ones or to their life in general.
12

Ms. SHEA-PORTER. I agree with you. I am just questioning about

whether you are actually able to care for them with this budget.

Thank you.

Dr. WINKENWERDER. Yes. The quick answer is yes, we have the

sufficient funds and sufficient personnel to do a good job.

Dr. SNYDER. Thank you.

Mr. Wilson.

Mr. WILSON. Thank you, Mr. Chairman.

And thank you, Doctor. And I am particularly happy to be here

with you in that my second son was graduated from Uniformed

Services University Medical School, and you were the keynote

speaker, graduation speaker. And I am very pleased that he is currently serving now in Connecticut and studying barometric medicine. So we are very proud.

I was very interested in seeing your report on partnership with the Department of Veterans Affairs (VA). And I have seen that

firsthand in our state, how helpful that can be to veterans.

And can you explain how that is proceeding? And what can we

do to help promote this?

Dr. WINKENWERDER. Thank you. And thank you for the service

that your son is providing. It is a great thing that he is doing.

With respect to our work with the VA, in my humble judgment,

I think that we have made tremendous progress working with the

VA and cutting down or tearing down barriers and silos that would

naturally exist with two large institutions, two large bureaucracies.

We have dedicated leadership on these issues between what we

call a joint executive committee chaired by Dr. Chu on the Department of Defense side and Secretary Mansfield on the Department

of Veterans Affairs side.

We have a health executive committee that I co-chair with the

current acting undersecretary of the VA, Dr. Michael Kussman. We

meet about every 3 months with both of these committees. We have

a strategic plan. We have a series of things that we want to

achieve, objectives. And we also measure, or we try to measure,

what we do.

Have we been completely successful in everything we have tried

to do? No. We have had failures. We have had things that we wish

had, you know, worked better or more quickly. But I believe we

have made a lot of progress, and let me highlight what I think the

progress is.

First and foremost, I think the way in which we are communicating now for those who have serious and severe injuries, working between the DOD and the VA to transfer their care and to ensure

that they get the care that they need when they move into the VA

system from the DOD system—there are still some glitches, and

there are still cases that come up. And when I hear about those

cases, I am concerned and I wish I wouldn’t hear about a case

when it happens. But we try to jump on it and make the right

thing happen.

In the area of information-sharing, we are really, I think, doing

great things that are very difficult in terms of—because we are

capturing today a lot of information on the battlefield and downrange, as we call it, electronically—medical information. We are

now able to transfer a fair amount of that medical information to
13

the VA so that they have it within their system, so their doctors

can access that information.

Clinical practice guidelines, things that we are using, the same

clinical guidelines to take care of certain things like PTSD.

Sharing of facilities: A good example of that would be in the

north Chicago area where we have one facility now that will be caring for both DOD beneficiaries and VA beneficiaries. And that is

a model we would like to pursue and do in more places.

Rather than building a new DOD facility or a new VA facility,

let’s look at how we combine our efforts and work out of one facility

and actually one team of people. It is a new way of doing business.

So those are a few of the things that we have done that we feel

good about. But we are certainly open to ideas, suggestions and critique on the ways that we can do things better. Because it is going

to be, in our judgment, an ongoing task, over who knows how long,

that we are going to have to continue to work together closely.

Mr. WILSON. Well, I know, Mr. Chairman, that, seeing how successful this is for geographic access, particularly in Secretary

Jones’s community of Charleston that I grew up in, that has really

been very, very helpful, and so veterans and active-duty can receive

services without travel.

A final point: The Navy has directed cutting 901 billets in addition to the military-to-civilian conversion. How will this impact

with the increase in the number of Marines that has been authorized?

Dr. WINKENWERDER. It is an issue that the Navy and the Marines will need to look at. Per the process in terms of the program

of military positions being converted to civilian positions, it is a review by the service secretary at the end of everything cycle to certify that those transitions or those conversions do not cut into

needed capability.

And so each service secretary, independent from my office or any

office within the Office of the Secretary, makes that judgment. So

I fully believe that the secretary of the Navy, in looking at what

might be a growing number of Marines to care for, will incorporate

that increase requirement into the current plans to convert those

positions.

I wouldn’t be surprised to see if the number of converted positions was reduced because of that. But that will be their decision,

and we will be working with them to, you know, ensure that they

conduct that analysis in an appropriate way.

Mr. WILSON. Thank you very much.

Dr. SNYDER. Ms. Sanchez.

Ms. SANCHEZ. Thank you, Mr. Chairman.

I just want to associate myself with the comments that both you

and the ranking member, Ms. Shea-Porter, and I don’t know if Mr.

Wilson said it, but this whole issue of the $2 billion cost savings

that we are going to see in this upcoming budget.

I mean, health costs, the way they are—I mean, we are lucky

that you are saying that the increases are only 7 to 8 percent a

year, but if we are looking at that $2 billion over—whether it is

a $20 billion program or a $40 billion program, we are talking 5

percent to 10 percent, depending on how you cut it.
14

That is a lot of money missing that, if we take a look historically,

probably should be money that should be missing at this point, the

way we have seen things spent around here. So I would just like

to associate myself with the concerns that we have over that.

I want to get back to this deployment post-traumatic stress disorder, because we are seeing it a lot in the soldiers who come back

to California. And, as you know, it is not just in the active but in

the national guard and the reservists that California has sent. We

have the most members in the military coming out of California,

so we have seen this quite a bit, in particular in the southern portion of our state.

It is my understanding that when a service member returns from

deployment, they fill out a post-deployment health assessment,

which has a four-item PTSD screening tool. And it is my understanding that if you say ‘‘yes’’ to three out of the four that that is

considered a positive screening for that.

And in a Government Accountability Office (GAO) report from

May of 2006, it reported that 22 percent of the service members

who obtained a positive screening were referred for further mental

health evaluation. And GAO recommended that the department

identify which factors led to 22 percent of the positives being sent

on to an additional screening versus 78 percent who weren’t.

Can you tell us what you have determined, why 22 percent are

being sent, 78 percent get to slide on this?

Dr. WINKENWERDER. Let me try to take everybody through this

so that there is a clear understanding.

The first point is that checking off the boxes, three out of four,

would be an indicator that that individual needs to be interviewed

very carefully and needs to have a very careful discussion with a

medical provider, a medical professional, to make a determination

based on what they hear about those symptoms or those reports as

to whether that individual, in the provider’s judgment, does, in

fact, have that clinical problem or is likely——

Ms. SANCHEZ. Does that happen——

Dr. WINKENWERDER. Yes. Yes. Everybody sees——

Ms. SANCHEZ. Somebody sees——

Dr. WINKENWERDER. Yes.

Ms. SANCHEZ. And in addition to that—you can answer this at

this point—it says that providers are physicians, physician assistants, nurse practitioners, medical technicians with advanced training to provide treatment and administer medication.

I mean, what does ‘‘advanced training’’ mean? Are these really

psychologists and psychiatrists looking at them? Who is looking at

them if you test positively and then you go in front of somebody

to have the questions so somebody can sense what is going on?

Dr. WINKENWERDER. Well, let me get to completing what I was

about to say, because the GAO report, in our judgment, got it

wrong in terms of drawing the proper conclusion about who got referred and what sort of follow-up happened.

What they failed to look at was the number of individuals who

were referred back to their primary care physician, or who might

have been referred to a chaplain, or who might have been referred

to a group counseling session, or who might have been referred to
15

Military One Source, or who might have been referred, you know,

into the TRICARE network.

Ms. SANCHEZ. So you are saying that the 22 percent didn’t include any of these people?

Dr. WINKENWERDER. It did not. Their measurement did not incorporate all of that, so they pretty significantly undercounted the

referrals. And that was a problem, and I am not sure they understood that completely when they did this study.

We talked to them about it. Unfortunately, when the study was

published, it got leaked to the press before we had our comments

to explain what had happened.

But that point aside, what we find from looking at service members again, not just when they come back on redeployment, but we

have instituted a third evaluation that occurs in the three-month

to six-month timeframe—we call it the post-deployment health reassessment. And it is a process that has been in place now for a

couple of years, and we are catching up with a backlog from prior

deployers. We have screened about 200,000 people.

What we find in that process is very interesting. We find higher

rates of, actually, symptoms of physical and mental symptoms than

immediately when people come back, confirming our suspicion that,

many times, when people come back, they check the boxes because

they want to get back to their family and they want to go on. We

know that.

So this is an effort to reach out again, to really bring people in,

to say, ‘‘How are you doing? How are things going with your family? Are you having physical or mental problems?’’ And what we

find in that process is about 50 percent of people have either a

physical or a mental concern.

But, like most of us, when we go to the doctor with a concern,

it is most of the time not a diagnosable medical problem. And so,

for example, in the area of physical health, what we find is about

53 percent express a concern about their physical health. But in

terms of a provider, in this case a doctor, making a diagnosis, it

is only about 10 percent. So most people need the reassurance that

what they have is not, you know, a diagnosed condition. In the area

of mental health, where about 34 percent had expressed a concern,

only about 6 percent or 7 percent were a diagnosed condition.

Now, obviously, we are looking at all this. We are following a lot

of data and a lot of trends. And there are other studies that are

going on, so that we try to get it right and make sure that everybody who is seen who needs a referral gets a referral.

Everybody that goes through that process, almost one-third,

about 30 percent, do get referred for either physical health followup or mental follow-up or some other kind of referral.

So that tells me that that is a pretty robust process. I mean, it

is not as if people are just sort of cycling through and then they

are being sent back to their unit. Many of them, almost one-third,

are being referred on.

So we are going to continue to look at this. Many of these things

we are doing for the first time. Nobody else has ever done this kind

of work. And so we are learning as we go along. We think we are,

you know, reaching out to most who need it.

Ms. SANCHEZ. Thank you, Mr. Chairman.
16

Dr. SNYDER. Ms. Drake.

Mrs. DRAKE. Thank you, Mr. Chairman.

Dr. Winkenwerder, it is nice to see you again.

Dr. WINKENWERDER. Good to see you.

Mrs. DRAKE. And it is really because of this committee that I

learned about Health Net. And I know we have representatives out

there today. And I want you to know they have been very helpful

in the 2nd District of Virginia, working with our Portsmouth Naval

Hospital, with our doctors. And they really are a resource for all

of us, if you would want to follow through with that in your own

districts.

I mean, they have really worked on things that—like ultrasounds

for our military weren’t automatically done, only if it was high-risk;

other high-risk pregnancies; and just different issues we have

worked on. And we have seen things working a little bit better.

It was also good to know that one of the things they are working

on right now is payment to the doctors electronically, so they are

paid very, very quickly, because we all know the challenges we

have had of getting doctors to agree to participate in TRICARE.

And it doesn’t matter what your health system is if you can’t get

the doctors to provide the service. So I thought that was something

that—I was very pleased to hear what they were doing.

We have all talked a lot about the task force. We have talked

about the increase in end-strength. Can you tell me how those two

mesh together? Is the task force using that increase in endstrength long-term in looking at the viability of our medical care

system?

I mean, we are talking about it; you have put money in it. But

is the task force also focusing on that? And how it will impact total

cost?

Dr. WINKENWERDER. In my estimation, they will be looking at

that. There are not a lot of data at this point that would tell us

in a precise way what the additional cost burden will be because

of this additional end-strength. I think we can probably impute

what we think that might mean on the basis of our current experience with our current end-strength.

Mrs. DRAKE. I just want to make sure they factor it in, because

when they were charged to do this, it was before the increase in

end-strength——

Dr. WINKENWERDER. That is correct.

Mrs. DRAKE [continuing]. And to just make sure the information

they have factors that in and that they get a good product in the

end.

Dr. WINKENWERDER. That is correct.

And I think there is no question but that it will increase cost in

the health-care system, because we will be supporting more activeduty and their families, and that will cost more money. I don’t have

a number to project.

And of course, this rolls in over a period of four years or five

years, so we have to do some analysis. We have not done that yet,

but we will do it.

Mrs. DRAKE. I just want to make sure they look at that——

Dr. WINKENWERDER. Yes.
17

Mrs. DRAKE [continuing]. Since it is not right now. It is not the

present.

Dr. WINKENWERDER. Yes.

Mrs. DRAKE. The other question I have—because you did make

the comment we all know what the answer is, and certainly we

have struggled with this issue, and we are very concerned about

the care provided to our military and our retirees and their families.

What are military members told in recent years when they sign

up to join the military? Are they told, ‘‘You are going to have affordable health care’’? Are they told, ‘‘You have health care’’? What

are they told, and what is their expectation?

I would just like to know that, moving forward to how do we deal

with the amount of money that it takes and——

Dr. WINKENWERDER. Right.

Mrs. DRAKE [continuing]. Any proposals that you may make

about prescription drugs. What are they expecting, based on what

they have been told?

Dr. WINKENWERDER. I am going to be real honest. Since I don’t

work directly with our recruiting community, I don’t know exactly

what they are told.

My best guess is they are told that they would have, upon joining

the military, access to an outstanding health-care benefit and

health-care program, ability to see world-class doctors in worldclass facilities, with essentially no cost-sharing as long as they are

an active-duty service member, and for their families with, similarly, little to no cost-sharing, except that they use the TRICARE

network.

And I expect that they are presented information about the

TRICARE benefit. I would also expect that they would be told that,

you know, if you serve 20 years, you will have access to a benefit

that would be for life.

Mrs. DRAKE. I think that is important for us, in answering the

question of what are we providing and how are we doing it, to

know what their expectation is. And we know what our older veterans thought, that everything would be free the rest of their life. We

know that is not said anymore.

But I just didn’t know what is their expectation now. I mean, I

would just like to get that. You can answer that later.

Dr. WINKENWERDER. It is a good question. We will get good information for you on exactly what people are being told.

But I endorse your implied message, that people ought to be told

that they have a benefit and they have coverage for health care,

but not necessarily that they have a free health care for a lifetime,

because that is not true. That is not accurate.

[The information referred to can be found in the Appendix beginning on page 67.]

Mrs. DRAKE. Thank you.

My time is up, Mr. Chairman.

Dr. SNYDER. Dr. Winkenwerder, since on Thursday we are going

to have our recruiting/retention hearing, you might want to pass on

to Dr. Chu——

Dr. WINKENWERDER. We will pass that on.
18

Dr. SNYDER [continuing]. And the folks that Ms. Drake may have

a question for them.

Dr. WINKENWERDER. We will do that.

Dr. SNYDER. Go ahead and start the clock again.

Mr. Jones has not returned?

I had several questions, not in any particular order, Dr.

Winkenwerder. I want to ask you a question about autism. You all,

I think, have a study going on about the services. Is that due in

April?

Is that correct, Debra?

The study is due to come out from you all in April or somewhere

in that timeframe?

Dr. WINKENWERDER. I think that is about right, yes.

Dr. SNYDER. Is that actively ongoing right now?

Dr. WINKENWERDER. Yes. We were directed by Congress to establish a task force, I believe, to look into the matter of applied behavioral analysis, a therapeutic approach to support children with autism.

Dr. SNYDER. And the whole issue of autism and how——

Dr. WINKENWERDER. Yes. Yes.

Dr. SNYDER. Yes, because in some ways that illustrates the challenges we have, because you want to have the best quality you can,

and sometimes that means that you are going to—well, I think it

does mean you all are going to be the leaders in an area.

And if you reach the conclusion—and I suspect that you probably

will—that the evidence is there that that kind of therapy is effective, then that is a financial burden on the system.

Dr. WINKENWERDER. That is right.

Dr. SNYDER. And so I look forward to that, and I suspect it will

be, you know, a fair-minded review of that whole issue.

And it becomes even more of an issue when we know that the

diagnosis of autism continues, certainly has gone up over the last

few years, and I believe a lot of our military kids are involved also.

One specific issue from your statement—I thought the satisfaction surveys that you all do seem to be good. And I asked my office,

you know, how many complaints we hear about military medicine.

We don’t hear a whole lot in our office. And we do have both guard,

reserve and an active base in my district.

But the satisfaction levels, by your own testimony, were slightly

lower than civilian ones. It doesn’t look to me like it is overwhelming, but I just wanted to ask, have you identified something—and

maybe it is just the nature of moving around or something. What

is your response to that?

Dr. WINKENWERDER. Yes. Again, that is compared to a high-level

benchmark, not to an average.

Dr. SNYDER. That is good.

Dr. WINKENWERDER. And we know in the clinical areas in a number of different specialty components that our performance is very

high, relative to any, you know, any civilian benchmark.

It would be my judgment that where we have satisfaction levels

that are not at the top of the benchmark, what is driving that, I

think it is probably mostly related to timely access and the availability to get in very quickly. Some of that is driven by people’s expectations.
19

Interestingly, our retirees—and the older the retiree group, apparently, the more satisfied. Our retirees are the most satisfied.

Those that seem to be the least are the active-duty service members and their families, who you would think would have the most

immediate access. But I think probably because of the hectic nature of their life and all their other duties and problems they, you

know, are very much focused on getting in very quickly and getting

out very quickly.

Now, the services and the surgeons general—you can ask them

about this when they come testify—but they are working on trying

to improve that access, timely access, and making it easier for people to get in and out.

Part of it is making sure that the provider’s schedule is open to

see patients. It is just the mechanics of getting people appointments. It is managing the staffing levels, having telephones that

are always answered, all those things.

But they are applying, in some cases, really good Lean Six Sigma

tools, for example, the Army is, to really hit on that very issue. And

I think that is where most of it is.

People seem to give us very good ratings when it comes to the

administrative part of, like, paying claims and getting claims paid,

and that part seems to be working very well. But it is probably

more in the access to care.

Dr. SNYDER. One of the questions that came up with Secretary

Gates the other day that I wanted to ask about—and he was not

aware of and was concerned about—and I will tell you exactly

where it is. It is on page 53 of the analytical perspectives of the

President’s budget.

But it is where they compare research dollars per all the departments of government. In the Department of Defense budget, basic

research had a cut of nine percent. Applied research had a cut of

18 percent.

And Secretary Gates was unaware of that and said it was something he was personally going to look at, and he related his experience as the head of a large research institute.

But that really concerns me as we are looking ahead in terms of

the edge of our—you know, what is our technological edge in terms

of war-fighting, and we are, you know, looking ahead a decade and

two and three and four. That is really our seed corn.

I, frankly, don’t know where your number is with research in

your medical budget, but does that relate—are you all part of that

cut, or how do you see the research number for——

Dr. WINKENWERDER. I don’t know if we are part of that, so I

don’t have an answer for you on that. But I would share your concern about investment in research and the need to keep that number going up.

I don’t know this for a fact, but I would suspect that it may be

other competing priorities, bills that have to be paid, whether it is

for repair of equipment and the like, or whether it is, in our case,

again, paying for bills for everyday medical care in the TRICARE

network and our cost-sharing structure that, you know, makes it

difficult for us to increase that investment on the R&D side.

I believe we need to invest more dollars. That is critical. Where

we have done that, there is no question but it is making a dif-
20

ference and saving lives today—the things that we have done, for

example, in hemorrhage control.

We are gaining the fruit and the benefits of things that were

done three, four, five, ten years ago, and then we see it, and we

are able to apply it, sometimes bring forward those things very

quickly.

But unless we keep the research going, we are not going to get

those benefits. And so, we need to do that.

Dr. SNYDER. I shared my concern today with Mr. Spratt, the

chairman of the Budget Committee, and he is concerned also.

Ms. Davis, did we ambush you?

Ms. DAVIS OF CALIFORNIA. You did ambush me, Mr. Chairman.

That is all right.

I am sorry that I missed the beginning of the hearing and

haven’t had a chance to hear your remarks or the questions.

I think one of the things that particularly strikes me and I know

that you have tried to address before is really our pipeline of physicians who will be available to care for our dependents, for our families, obviously, for our men and women in uniform, so that that

benefit which we hold dear for those in uniform will always be

there.

Perhaps you have already addressed that.

Dr. WINKENWERDER. No, I have not, actually.

Ms. DAVIS OF CALIFORNIA. If you could do that, that would be

helpful.

I saw in the notes that bonuses are being increased.

Dr. WINKENWERDER. Yes.

Ms. DAVIS OF CALIFORNIA. Recruiting continues to be a concern.

And what else can we do? And why do you think that is becoming

such a problem? Is it partly the perception that our medical professionals will be brought into the war theater? Is that part of the difficulty?

Dr. WINKENWERDER. I don’t think it is. I think it has more to do

with our ability to compete on the basis of compensation. I really

do.

And this is particularly true with the specialties that are more

highly compensated. We have less challenge, candidly, for pediatricians and family practitioners and internists. We are, in some

cases, overstaffed in those areas. But when it comes to orthopedic

surgeons, radiologists, general surgeons, anesthesiologists, this is

where we have trouble and a challenge.

Now, we are relatively well-staffed, but I am not as comfortable

as I would like to be about the future, two, three, five, ten years

down the line, because we do need that pipeline of people.

These new authorities that you in Congress granted us we very

much appreciate. We believe it will be helpful.

However, one of our challenges is that, within our structure, the

decisions about granting those bonuses and using those funds resides within the line of each service. And so, if there is a competition for dollars, let’s say, for example, within the Army because of

all the things the Army has to pay for, there may be—and I am

not picking on the Army; I am just using that as an example. But

there may be a reluctance to free up those dollars to be used for

that purpose.
21

The flexibility is there. The authority is there. But people are not

stepping forward to give the medical community the funds to recruit people. And we have a long tail of training.

So that is a concern I have, and we would appreciate any

thoughts or suggestions you have on that front. We want to work

with you on that.

I will say that one of our most solid sources of that pipeline for

the future is the Uniformed Services University. It is really a key

asset for us. Today, close to 25 percent of all military physicians

are graduates of the Uniformed Services University. And when you

go into the senior officer ranks, the proportion even goes higher:

30, 35 percent. And if you look at the current promotions to colonel

today, a significant proportion come out of that program.

So the university is an important asset that we need to properly

fund, nourish and continue into the future.

Ms. DAVIS OF CALIFORNIA. I appreciate that.

If I could just turn for a second to mental health coverage and

the outreach.

And, Mr. Chairman, have you already discussed this a little bit?

Dr. SNYDER. He has talked about it quite a bit. I would like to

hear—your perspective is an important one. Go ahead and wade on

in.

Ms. DAVIS OF CALIFORNIA. Well, in the background I think it was

mentioned that we offer an interview to people, we ask them, ‘‘How

are you feeling? How are you doing?’’

We also know that, at least at one point, I think, people were

told, ‘‘Do you have any problems? If so, you know, come into treatment. If not, go home.’’ And, you know, that is a tough choice, I

think, for people to make.

Dr. WINKENWERDER. Right.

Ms. DAVIS OF CALIFORNIA. Can you give me a better sense? Out

of the returning soldiers, men, women in uniform, what percentage

of them actually—not necessarily are having adjustment problems

but just are asking for interviews, are seeking help?

And what kind of follow-up do you have that would suggest that

we either have the resources out there—and I know that in urban

centers they may be there. They may not be there in rural counties.

What is the whole picture there? And what ought we be focusing

on?

Dr. WINKENWERDER. The whole picture is, number one, we recognize that this is a top priority, and we have recognized it. Our efforts, if you look at where we are today, they are a reflection of the

decisions we made two, three, four years ago in some cases.

Early on in this conflict, we recognized that we were going to

have a mental health burden, and so we began to incorporate

changes in our program. We have a much more robust in-theater

mental health support today and mental health professionals embedded in our units, again, to deal with some issues that happen

right then and there, not wait two months or six months or a year

until people get back home. So that is one change, a much more

aggressive approach in-theater.

Second is the post-deployment assessment, and then now a third

leg, a reassessment, at three to six months after people get back,
22

where we reach out and bring them in to fill out questionnaires

and with a face-to-face interview or session with a medical professional.

We have research that is going on to study that we didn’t have

10, 15, 20 years ago, certainly not during Vietnam. We are more

aggressive with the use of medications.

We have, I think, been more specific recently, in terms of guidance about who should be redeployed if they have certain kinds of

symptoms or they require certain kinds of medications and they

need to come home, or that they shouldn’t redeploy or, you know,

deploy for the first time if they have certain kinds of mental health

problems.

There is a much higher recognition of all these issues. I think we

are making real nice progress, cutting through some of the stigma.

And, again, we can stand up and talk about in the medical community these issues all day long, but ultimately it is whether our

line leadership embraces this as a philosophy. And I actually will

tell you I believe that they have at the highest levels.

Now, is it complete and across the board? No. I have no doubt

that there are colonels and captains and sergeants in places who

don’t get it yet. And, you know, it is a balance, because clearly you

do have to be tough, you have to be mentally tough, you have to

be resilient to deal with the rigors of being a service member and

going to war.

But that has to be balanced against when you are really having

such difficulty that you can’t perform your job or duty, or you are

having huge relationship issues, or you are a risk to yourself or

other people. So you have to be able to identify those issues and

pull those people out, get them support, and help them so that

they, you know, can either return to duty or that they can hopefully lead a normal life.

And that is our focus. We have a lot of programs. Do we know

how they are all working? We are learning. But I think it is going

to be some time before we know, you know, the impact of all of

these things that we are doing, which are, in many cases, the first

time that they have been done.

Dr. SNYDER. Mr. McHugh.

Mr. MCHUGH. Thank you, Mr. Chairman.

Let me blend two themes here. I heard, understandably, a number of members, Ms. Davis most recently, concerned about mental

health. It is an issue. We know the suicide rates for the Army in

Iraq, and we are all concerned. I know you are as well.

If you look at that issue in the context of the mention I made

in my opening comments about military-civilian conversions, the

schedule for those from 2006 to 2009 calls for 342 military mental

health positions to become civilian positions over the total of that

4-year inclusive period.

There is obviously no guarantee those positions are going to be

filled on a one-to-one or a two-to-one or whatever ratio it may be.

But even if they are filled one-to-one, I think we can say with certainty the number of deployable mental health professionals will be

depleted—or, not depleted, but reduced.

So I am just curious, has there been any re-evaluation on that?

I mean, 2006 is not where we are in 2007. I understand times
23

change. But what kind of look-see is your office, your department,

doing to make sure that we are going to not unnecessarily and very

harmfully erode the ability and the availability of mental health

positions, particularly in deployed areas, particularly given the

surge that we have talked a little bit about here today?

So, your comments on that?

Dr. WINKENWERDER. Well, you raise a very good point and a very

good concern. And I think we do need to take a look at that. We

definitely don’t want to go short or find ourselves in a position

where we have insufficient military personnel, military-trained personnel, who can deploy or who can attend to the specific needs of

military service members. And so, we need to look at that.

I would be happy to take that issue or that question and refer

it back again to the Army. I don’t know where the numbers came

from, if there were more from one service or another. But we I will

look into that——

[The information referred to can be found in the Appendix beginning on page 66.]

Mr. MCHUGH. That is fine.

Dr. WINKENWERDER [continuing]. Because I think you raise a

very good point.

Mr. MCHUGH. That is fine. And I know we would all appreciate

that, absolutely. And we don’t want any guessing or such, because

it is an important issue. I know you realize that most of all. So

please do that.

And let me switch a little bit, if I might. We talked about the

$1.8 billion in assumed savings because of the task force. You have

almost $300 million in other undefined initiatives.

But the budget also includes nearly a quarter of a billion dollars,

$248 million, in efficiencies from the military treatment facilities.

Those are undefined. We had similar undefined efficiencies listed

in the 2006 budget, as well as the 2007 budget. The year 2006 was

$94 million. We are done with 2006.

And this is probably a tough question. You may have to take this

for the record, as well. But can you give us an idea of how much

of the $94 million, if any, did we achieve in efficiencies in the 2006

budget? What did you do to reach them? And what kind of efficiencies are we talking about when you are looking at $248 million

for next year’s budget?

Dr. WINKENWERDER. I am going to have to take that one for the

record.

[The information referred to can be found in the Appendix beginning on page 66.]

Mr. MCHUGH. That is fair.

Dr. WINKENWERDER. But I will give you my best thought about

that.

The way the numbers were developed for the efficiency goals and

what we call the efficiency wedge, going out over several years, was

to take a look at what it cost to purchase services in the network

and then, if we were to purchase those same services, if you will,

in our own facilities, how much would it cost.

And what we found was a gap. In other words, it cost more

money to provide these services internally, or at least, maybe stat-
24

ed a better way, there was a proportion of the total dollars spent

inside the system that could not be fully explained.

Some of that we know goes for things that are not compensated

or billed for. They are things that relate to protecting our force,

some of the public health issues, some of the force protection

issues—lots of things that we do that you can’t or don’t bill for, so

to speak.

And so we are trying to count, and we have had an ongoing process to better account for all of those things.

Having said that, our services looked at that issue two or three

years ago and came up with what they believed were some efficiencies they could achieve either through increased productivity,

through doing things more efficiently, delivering the care more efficiently. And the precise undergirding for those efficiencies is something that was developed by each of the services.

So we can try to obtain that information for you, but it was a

commitment that they made to those targets based on productivity

and efficiency targets that they believed that they could achieve.

Mr. MCHUGH. So they developed the targets. You did not dictate

the targets.

Dr. WINKENWERDER. It was a process.

Mr. MCHUGH. You didn’t say we——

Dr. WINKENWERDER. You know, it wasn’t one or the other. It was

a negotiated process.

Mr. MCHUGH. Democratic dictatorship.

Dr. WINKENWERDER. We are always democratic.

Mr. MCHUGH. Well, I appreciate that.

Just a final comment. If you could get the figures as to what we

did save in 2006 and what we did to save them, and also what the

target is, where the target areas lie with respect to the $248 million for next year.

Dr. WINKENWERDER. I would be glad to do that.

[The information referred to can be found in the Appendix beginning on page 66.]

Mr. MCHUGH. Thank you, sir.

Dr. WINKENWERDER. Thank you.

Mr. MCHUGH. Thank you, Mr. Chairman.

Dr. SNYDER. Ms. Drake.

Mrs. DRAKE. Thank you, Mr. Chairman.

I think it has been, what, about 1.5 years since we opened up

TRICARE to reservists outside of their window of activation? Can

you give us an update? Is that widely used or is it very little?

Dr. WINKENWERDER. It is being used, and it is growing. We have,

I believe, about 34,000 or 35,000 beneficiaries in the new TRICARE

Reserve Select program. And so, people are joining.

My recollection, however, is that the rate of growth of that program is not as great as we thought that it might be. But we are

clearly reaching out to people in a very systematic way, particularly when they return home and for guard and reserve who might

go back into the civilian sector, to make them aware that this is

a benefit that they have, if they choose it.

What we find, however, is that most people seem to prefer their

civilian health-care benefit program. And I am not sure we know

exactly why that is, but it is not to say that people don’t like the
25

TRICARE program. They do. I think we hear good comments on

that as well.

But that is about where it is right now. And we think it is working well.

Obviously, Congress passed some additional changes last year

that changed the cost-sharing structure on that so that it is 28 percent of the premium overall for all guard and reserve who might

choose to join TRICARE Reserve benefit.

Mrs. DRAKE. So that may increase as they——

Dr. WINKENWERDER. My guess is that it definitely would, yes.

Mrs. DRAKE. All right. Well, thank you very much.

Thank you, Mr. Chairman.

Dr. WINKENWERDER. Thank you.

Dr. SNYDER. Ms. Davis, your number has come up again.

Ms. DAVIS OF CALIFORNIA. I am going to pass right now, Mr.

Chairman. Do you want to go ahead and——

Dr. SNYDER. Yes.

Dr. Winkenwerder, Mr. Wilson asked you about the DOD–VA

interface, and this is a topic that has been important to Mr.

McHugh and others. And you said that if anyone has suggestions

on how to look at that—I appreciate that openness.

But as you look ahead now—you gave a list of things that you

would like. As you look ahead, what are things on a to-do list with

regard to improving things at the DOD–VA interface? And how

much impact do you think those particular things on your list will

have on either quality or seamlessness or cost savings?

Dr. WINKENWERDER. I would outline for you four areas.

The first is in the area of joint markets and the opportunity for

joint facilities.

So what we have in Chicago, for example, I think is a model that

could potentially be duplicated in other places like southern Mississippi, the Biloxi-Gulfport area, the VA facility there. There is a

Keesler Air Force facility there.

The same thing is true in Denver, Las Vegas. There are several

other locations we are looking at and developing a priority list of

places that we really ought to get serious about accelerating that

effort and that model.

The second area would relate to our joint efforts in the electronic

health record system. Secretary Nicholson and I made an announcement the week before last that we are going to pursue jointly developing a new inpatient module for our electronic health

records system.

In our case, we have a limited capability on the inpatient side.

Our system is primarily an outpatient records system. It is doing

a great job for us. We have it deployed world-wide. But what is before us is the need to develop the in-patient side.

The VA, on the other hand, has a great system. They are needing

to modify, update, as I understand it, their platform. And rather

than us doing that separately, we want to pursue doing it together.

We think we can save a lot of money and help set standards for

electronic health records across the country by doing that. So that

is another area.

Third, I would say, is our obligation to make further improvements in the way we take care of the severely injured and in the
26

area of traumatic brain injury, which is what we are just learning

more about.

And in my judgment, we need to improve our screening process

and our screening tools, and follow up and invest more in research

on traumatic brain injury. And we are beginning to do that.

And then finally, I think, as we have talked about, in the area

of mental health and our shared responsibility in the area of mental health to ensure that all those who have mental health problems or concerns or identified diagnosed conditions get the support

that they need and that they be given the best possible chance for

a full recovery from their mental problems.

So those are the—and we in the VA have talked about that, so

what I am telling you, if you were to ask the same question to Dr.

Kussman or even to Secretary Nicholson, I think you would hear

the same shared agenda. We are going to be talking more about

this in the very near future of our agenda to be more aggressive

in these areas.

Dr. SNYDER. I think that is a—I know that, as I have mentioned,

Mr. McHugh has a great interest in—I am on the VA Committee

also, and we may well want to have our further formal discussions

on that specific topic.

On another unrelated question, in your written statement, you

used the phrase, talking about these changes of cost-sharing and

all that, you used the word ‘‘aligned,’’ I think was your word,

‘‘align’’ the premiums with private health insurance plan. How do

you define ‘‘aligned’’?

Dr. WINKENWERDER. Well, what that means to me is it means a

relationship that is consistent over time.

And that does not mean the same level of cost-sharing. It just

means that if, for example, what we ask of people today, as I think

we talked about, is in the range of 10 percent to 12 percent of their

cost, of the total cost of the program, is what they share in their—

personally.

It had been around 25 percent, 26 percent. In our judgment, that

needs to increase. But at some point, that increase ought to level

off, and then it ought to stay leveled off.

In our judgment, the cost-sharing requirement for our military

retirees ought to be less than it is for the best civilian programs.

We believe that is what our retirees and those who have served

this country deserve.

On the other hand, we don’t believe we can afford the cost-sharing to continue to go down relative to the cost of the whole benefit.

So that is what I meant when I said ‘‘aligned.’’ It means that the

relationship is consistent over time and that it represents a consistent relationship between our cost structure and that that you

would see in a civilian private-sector health plan.

Dr. SNYDER. Mr. McHugh.

Mr. MCHUGH. Thank you, Mr. Chairman.

Mr. Chairman, I appreciate your comment about the DOD and

VA sharing initiative. And in fairness to Secretary Winkenwerder

and Nicholson, they have stepped forward and are trying to do

some things—and I know there was some very deeply ingrained

and I would hope not insurmountable—although, after now, in my

15th year, having watched the struggle, they may be insurmount-
27

able differences—but there is so much that can be done, and I want

to see that progress continue.

But you mentioned that feasibility study. Quick question: When

will that be done? I know you have just announced it, but what is

your timeframe on that?

Dr. WINKENWERDER. Not long. We think——

Mr. MCHUGH. Not another 15 years, then.

Dr. WINKENWERDER. No, no, no. Within the next 60 days. We

really think that this is something that we ought to look at pretty

quickly. It is really a study and look at our respective requirements.

And so we jointly are pushing the technical folks and the Infor- mation Technology (I.T.) communities of both the DOD and the VA

to let a contract to do that work and to come back to us.

Our people and the people at the VA talk together all the time.

They know each other. And we know that what is shared between

us is far greater than what is different.

There is a lot of overlap in terms of what we expect the requirements to be. There are some differences. We have some things that

we do that are out in the field that the VA providers just don’t

need to do. We know that. We have requirements for certain kinds

of medical care, for example, for Obstetrics-Gynecology (OB–GYN)

or for pediatrics, and that is not something that the VA does much

of. And they have some issues, probably, on the chronic end of the

field.

But there is, we think, probably a 90 percent overlap. But we

want to define all those requirements and say, ‘‘Okay, how do we

have it go forward?’’

Mr. MCHUGH. And you do have a significant software—well,

hardware challenge, too, on your databases, because you were kind

about the VA’s system, but, as I understand it, there is not a set

of it off the shelf. I mean, they——

Dr. WINKENWERDER. That is right. And I don’t want to speak for

them, but I think they may be looking to make some changes in

some of those approaches.

Mr. MCHUGH. Right. Yes, it wasn’t a criticism, more of an observation. I mean, I was just——

Dr. WINKENWERDER. No, it works very well, I am told, for them.

But we are both spending a fair amount of money, and so we think

the taxpayers’ money will be better spent if we do this jointly. And

at the same time, we can help set standards for the rest of the

country.

Mr. MCHUGH. Yes. We want quality of care and fewer medical

errors, all that good stuff. Anyway, I will be looking forward to that

report.

I mentioned concern about military-civilian conversions on mental health, but you have a pretty broad-range proposal, as I mentioned in my opening comments.

Does this budget assume any savings from the military-civilian

conversions? If so, how much? If it does, we can’t discern that.

Dr. WINKENWERDER. No.

Mr. MCHUGH. It does not.

Dr. WINKENWERDER. It does not.

Mr. MCHUGH. Thank you.
28

Mr. Chairman, that is it.

Dr. SNYDER. Ms. Davis.

Ms. DAVIS OF CALIFORNIA. Could you go back to that, then, in

terms of those conversions? Were you anticipating that there would

be savings, or may that shift?

Dr. WINKENWERDER. I think there are some savings.

Mr. Middleton.

We think there may be some cost savings, but we have not programmed that into the out-years. So right now it is cost-neutral.

Ms. DAVIS OF CALIFORNIA. But that wasn’t the primary reason

for making that shift.

Dr. WINKENWERDER. No. It really was not a budget-driven exercise. It was more to the question of, what is military-essential and

what things can be done by civilians?

And it only makes sense to harvest all those things that could

be done by civilians—to have civilians do them so that we can use

military billets, military positions, for things that we really want

the military to do. That was the driving thrust for it.

And of course, this military-civilian conversion effort does not

apply just to the military health system. It applies across DOD.

I will say that I think we are one of the areas that has embraced

this the most aggressively, because we do think that there is some

significant opportunities——

Ms. DAVIS OF CALIFORNIA. Do you also see some down sides?

Dr. WINKENWERDER. Well, there is some risk, but what we have

agreed to—and when I say ‘‘we,’’ I mean myself, Dr. Chu, the service secretaries, our leadership—is that this needs to be done in a

careful way. We need to look at it every year to see how we are

coming on this pathway.

We need to look at the experience of the services with respect to

whether they are able to hire the civilians, and how effectively are

we executing, and are we harming or cutting into any of the things

that Congressman McHugh talked about.

So I think we have set targets that we think are realistic, but

we want to review them on an annual basis.

Ms. DAVIS OF CALIFORNIA. Thank you.

I guess my time is up, Mr. Chairman.

Dr. WINKENWERDER. If I might say one other thing, I wanted to

bring up, because you talked about mental health, if I might, just

to——

Dr. SNYDER. Yes. Go ahead.

Ms. DAVIS OF CALIFORNIA. Okay.

Dr. SNYDER. Mr. McHugh has no further questions.

Dr. WINKENWERDER [continuing]. To note that we do have, at

Congress’s direction, a mental health task force that is co-chaired

by General Kiley, Army surgeon general, and—I am sorry, I can’t

recall the name of the other co-chair.

But it is a very robust effort to look at the totality of what we

are doing in the mental health area. They have gone out and had

sessions with the various communities around the country to get

feedback. And so, it has been a very robust process.

They will be coming forward with recommendations later this

year on any changes we should make, any additional things that

we should be doing. I am sure they will look at everything.
29

Ms. DAVIS OF CALIFORNIA. Yes.

Dr. WINKENWERDER. And we look forward to that.

Ms. DAVIS OF CALIFORNIA. I am glad to hear that. And also I

know to really tap the ideas and best practices that people are

using at home——

Dr. WINKENWERDER. Sure.

Ms. DAVIS OF CALIFORNIA [continuing]. And how our spouses are

able to work through many of those problems.

I think one of the other issues that has been raised, at least in

San Diego and I am sure in other communities, is that rather than

going even through the military system, people have sought outside

help because they are not comfortable, they are afraid of word getting back to commanders, whatever that might be.

Dr. WINKENWERDER. Sure.

Ms. DAVIS OF CALIFORNIA. And so, how do you incorporate that

into the thinking of what is really going on? And what kind of assistance do people need?

Dr. WINKENWERDER. Well, one common principle that we want to

pursue—we believe we have—is that people ought to have access

in as many different ways as we can devise or as are available to

get the support and care they need.

Mental health is a—yes, it is a sensitive issue. And as much as

we try to work through the stigma, I think most of us would not

go around saying, you know, ‘‘I have a mental health problem.’’ You

know, it is just not something most people are comfortable doing.

We have to work to try to remove that stigma. We are trying to

do that. But we want to have the chance for people to access those

services in a confidential way, if that is what they choose to do.

Ms. DAVIS OF CALIFORNIA. And are you comfortable that the

budget that is proposed is——

Dr. WINKENWERDER. Yes, I am. I am comfortable. Right now, I

have not gotten any feedback from our medical leadership that

they don’t have the resources they need to perform those functions.

Ms. DAVIS OF CALIFORNIA. Thank you.

Thank you, Mr. Chairman.

Dr. SNYDER. Dr. Winkenwerder, one specific question, if you

could educate me on it, with regard to electronic medical records.

This came up with Secretary Nicholson at the Veterans Committee

last week, and he talked about their—an electronic record will be

a prospective one, which—people come in with this thick of handwriting for the last 20 years or something. And I think I understood what he meant.

Is there anything inherently different in either the military

health-care system or the VA system, to your knowledge, in terms

of dealing with that issue, in terms of a transition from a handwritten inpatient or outpatient medical record to an electronically

based medical record?

Dr. WINKENWERDER. Well, first of all, I can’t answer exactly how

they are dealing with that issue. But I will say that it is a big and

difficult issue.

First, there is just the transition of providers and changing business process and changing culture for the doctors, nurses, technicians, everybody, to use and do things, everything, with a com-
30

puter, either a laptop or a handheld, so that changes the process

of care.

But in addition to that, it just changes things for the patient,

changes things for everybody.

And I have lost my train of thought here.

Dr. SNYDER. Well, that is understandable. You have been there

by yourself for 1.5 hours. You are entitled to have one lost train

of thought in an hour and 40 minutes. [Laughter.]

But the question I asked, is there anything inherently different?

I mean, if I went to a hospital in Little Rock where I had been admitted, and have been, they would have a handwritten medical

record. And when they made their conversion to electronic medical

records, somebody would say, ‘‘Well, what do we do with all these

doctors’ scrawls?’’

Is there anything inherently different between the medical care

system and a private system in terms of making this transition to

an electronic medical record? I would assume there is not, but I

don’t know that.

Dr. WINKENWERDER. Well, I don’t know how the small doctor office or the two- or three-doctor group would do it. I suspect they

would hold onto——

Dr. SNYDER. Still hand-write.

Dr. WINKENWERDER. But if they were converting to an electronic

record system, they would hold onto their old paper records.

What we are trying to do—first of all, we have, as every difficult

problem requires, a task force to work on this very issue within

DOD. And it has to do with a number of things. One is how do you

archive the old records, because we need them; there are certain

legal requirements. There may be the need to refer back to them

for clinical issues.

And then, of course, there is the issue of what do people do if the

system goes down. Do they capture the information on paper and

then transcribe it back in? I mean, so there is a lot of issues with

doing this kind of conversion. Can you scan it in?

And so today, as we have stood up also, I am told that we have

been able to go back and archive a couple of years’ worth of encounter information, but we don’t go back longer than that.

And so we are, to my knowledge—and my staff can correct me—

we have paper records that we are going to have to hold onto for

some period of time. And there is no simple, quick way to get all

of this information into this central database.

Dr. SNYDER. I don’t hear anything you are saying, though, that

makes it sound like it is inherently different from any other organization.

Dr. WINKENWERDER. I think that is right.

Dr. SNYDER. Mr. McHugh, do you have any final questions or

comments?

Mr. MCHUGH. No, Mr. Chairman. Thank you.

Dr. SNYDER. Dr. Winkenwerder, we appreciate you being here.

I did a radio interview live back home to a Little Rock station

at 7:15 Central, and it was 55 degrees at 7 a.m., so I sense a thaw

is in the air, and we will let you go. [Laughter.]

Just by a closing comment, you know, when we get the budget

and we see things like, you know, 18 percent cut in applied re-
31

search and 9 percent cut in basic research, and somehow we are

going to create almost $2 billion in this budget somewhere—it is,

you know, the middle of February, and somehow we are going to

do this in the next 3 or 4 months—it just creates a lot of, well, uncertainty, and at some level a little bit of anger, because, you know,

a lot of members and the public out there think, ‘‘Well, wait a

minute, this is going to be difficult.’’

And so we look forward to working with you. We appreciate your

advocacy and your candor. But we obviously have some work to do

on some aspects of this budget.

And I believe you promised me you were going to get me some

nice charts and graphs about where we are at with the

numbers——

Dr. WINKENWERDER. We will.

Dr. SNYDER [continuing]. In this year’s presentation.

Dr. WINKENWERDER. We will.

Dr. SNYDER. Do you have any final closing comments?

Dr. WINKENWERDER. Just thank you for the opportunity to be

here today and to have a very constructive dialogue, I think, on all

of these issues. We want to work together with you.

I will say one final thing. With respect to these big challenges

that we face, the only way—the only way—that we will solve them

is if we in the department work together with you in the Congress,

both sides of the aisle, and with our constituency and advocacy

groups and all involved, and chart a path forward. And it is going

to take some real leadership to do that, but I am confident it can

be done.

Dr. SNYDER. I think Mr. McHugh and I are united in our concern

about this number, so you have already got the bipartisanship

going on there. Thank you.

Dr. WINKENWERDER. Thank you.

Dr. SNYDER. The hearing is adjourned.

Dr. WINKENWERDER. Thank you very much.

[Whereupon, at 3:44 p.m., the subcommittee was adjourned.]

A P P E N D I X

FEBRUARY 13, 2007

PREPARED STATEMENTS SUBMITTED FOR THE RECORD

FEBRUARY 13, 2007

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QUESTIONS AND ANSWERS SUBMITTED FOR THE

RECORD

FEBRUARY 13, 2007

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QUESTIONS SUBMITTED BY DR. SNYDER

Dr. SNYDER. Are you planning to provide us additional information on the status

of your budget so that we might analyze that?

Dr. WINKENWERDER. The Department is waiting for recommendations from the

Task Force on Military Health Care before issuing any specific proposals this year.

As directed by Congress, the Department has not increased enrollment fees for

TRICARE Prime, changed the deductibles for TRICARE Standard, or implemented

an enrollment fee for Standard. There have also been no changes in the co-payments

for pharmaceuticals. As a result, the cost-share paid by beneficiaries has remained

flat while overall health care costs have gone up significantly. The result is that the

Department of Defense’s (DOD’s) health care budget continues to be a larger portion

of the DOD overall budget than it should.

Dr. SNYDER. Why has the DOD recommended, and approved a plan to obtain

state-of-the-art second opinion pathology consultations by an ill-defined, fragmented

system of commercial laboratories with uncertain outcomes, when the world-renowned AFIP has been doing this in an exemplary fashion? The plan is to outsource

these secondary consults to the very same organizations that are currently sending

these specimen to the AFIP. If these consults are not available, how does the quality

of care of our Active Duty men and women, as well as our veterans, be affected?

Dr. WINKENWERDER. The Secretary of Defense’s recommendation to outsource second opinion pathology consultations was based on the recommendation from the

Medical Joint Cross-Service Group (MJCSG), one of seven cross-Service groups established by the Base Realignment and Closure (BRAC) process. The MJCSG was

chartered to review DOD health care functions and to provide BRAC recommendations based on that review.

The MJCSG developed key strategies to guide deliberations based on the key objectives above. These strategies came from an analysis of the BRAC final selection

criteria. The MJCSG focused its efforts on:

• Supporting the war fighter and their families, in-garrison and deployed;

• Maximizing military value while reducing infrastructure footprint and maintaining an adequate surge capability;

• Maintaining or improving access to care for all beneficiaries, including retirees,

using combinations of the Direct Care and TRICARE systems;

• Enhancing jointness, taking full advantage of the commonality in the Services’

health care delivery, health care education and training, and medical/dental research, development, and acquisition functions;

• Identifying and maximizing synergies gained from collocation or consolidation

opportunities; and

• Examining outsourcing opportunities that allow DOD to better leverage the

large United States health care system investments.

Based on leveraging university and hospital services and commercial laboratories,

the Department will rely on the civilian market for second opinion pathology

consults and initial diagnosis when the local pathology laboratory’s capabilities are

exceeded.

Dr. SNYDER. Why have you not assessed the current outsourcing plan, as far as

quality, cost and feasibility from the global deployment of the armed services are

concerned? Why have you not calculated the projected costs over period of time?

Dr. WINKENWERDER. The Medical Joint Cross Service Group (MJCSG) has assessed the outsourcing of secondary consultations for the Department. According to

the MJCSG report, ‘‘Over half of Armed Forces Institute of Pathology’s (AFIP’s) capacity is being dedicated to commercial activities with private industry. Since these

are not Department of Defense (DOD)/Defense Health Plan core business requirements, they are considered excess and should be discontinued. Additionally, AFIP’s

low military value is reflective of its small portion of military-related workload.’’

Based on this assessment, the recommendation was to stop performing secondary

consultations within DOD for both civilian and military cases and to leverage the

large United States health care system investments. As a result of this recommendation, in the future, the Department will rely on the civilian market for sec-
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ond opinion pathology consults and initial diagnosis when the local pathology laboratory’s capabilities are exceeded.

Dr. SNYDER. After September 11th, the AFIP has shown that it can respond 24/

7 worldwide in quality, scope and flexibility to medical threats; e.g., SARS, anthrax,

avian flu. The private analysis (Bearing Point study) commissioned by the Army SG

office this year recommended maintaining a somewhat leaner but vibrant AFIP organization and moving it to USUHS in Bethesda. That analysis also stated: ‘‘For

DOD, disestablishment may result in the loss of immediate response capability to

medical threats that could impact combat effectiveness or operational forces. For the

nation, it eliminates robustness in capacity to respond to potential bioterrorism

threats such as the recent anthrax and SARS situations.’’ Who will respond to urgent military needs around the world if our core of pathology experts is disbanded?

How can DOD replace this ‘‘battle-tested’’ unit with a proven track record by an intangible outsourcing replacement to nebulous commercial laboratories?

Dr. WINKENWERDER. The DOD participates in the international Laboratory Re- sponse Network and environmental surveillance. All of the Services have laboratory

and epidemiological capabilities that can be mobilized or deployed during infectious

disease outbreaks. These Service capabilities can be augmented by commercial and

DOD organizations. Assisting organizations in the DOD/Military Services network

include the Global Emerging Infections Surveillance and Response System (DOD–

GEIS), United States Army Medical Research Institute for Infectious Diseases

(USAMRIID), the Air Force Institute for Operational Health (AFIOH), and the

Naval Health Research Center (NHRC) Respiratory Disease Laboratory. United

States Public Health Service and State organizations may also provide support. The DOD–GEIS oversees the conduct of microbiological surveillance and focused surveillance activities at various DOD laboratories worldwide, and at the public

health centers of the Air Force, Army, and Navy. The DOD–GEIS taps a network

of collaborating experts and laboratories to provide emerging infectious disease consultation; identify vulnerabilities in surveillance, response and infrastructure; and,

assists DOD partners to develop projects and implement programs that mitigate

emerging infection threats. USAMRIID develops vaccines, drugs, diagnostics, and information to protect United States Servicemembers from biological warfare threats and endemic diseases. It is the only laboratory within DOD with the capability to study highly hazardous viruses requiring maximum containment at Bio-Safety Level 4. The AFIOH, Brooks City Base, Texas, provides active respiratory disease surveil- lance through a network of sentinel sites around the world as well as associated epidemiology support. The NHRC, San Diego, California, performs systematic, population-based respiratory disease surveillance among United States military trainee

and shipboard populations.

Dr. SNYDER. The BRAC Commission’s noting that the medical community argued

that AFIP is an irreplaceable resource for disease research and education; why are

these AFIP capabilities being eliminated especially since we are at war with our

troops again stationed all over the world?

Dr. WINKENWERDER. The Department of Defense (DOD) will retain capabilities

from AFIP that are critical to the military. These capabilities will be absorbed by

DOD organizations and redistributed across DOD sites in the National Capital

Area, Dover, Delaware, and San Antonio, Texas. The capabilities identified for absorption support the Secretary of Defense’s BRAC goals to more efficiently and effectively support its forces, increase operational readiness, and facilitate new ways of

doing business. When combined with full implementation of the BRAC law, the result is a set of capabilities that directly support the DOD mission.

Dr. SNYDER. In your letter dated March 27, 2006, to Representative Van Hollen,

you stated ‘‘it is recognized that some of the functions of the institute are critical

to military and civilian medicine and must be retained.’’ You further stated that the

independent contractor, Bearing Point, will recommend and identify these critical

components of the Institute and based on its recommendation an appropriate course

of action will be taken. Why are you not accepting Bearing Point’s recommendation:

‘‘Retain Diagnostic and Consultative Services . . . to perform multidisciplinary diagnostic pathology . . . and allow for robust use of the repository’’?

Dr. WINKENWERDER. The disposition of the Armed Forces Institute of Pathology’s

second opinion pathology consultation service is specified in the Base Realignment

and Closure Commission’s final recommendation, and is, therefore, not eligible for

retention within the Department of Defense. Therefore, the Department does not

have the option to accept Bearing Point’s recommendation.

Dr. SNYDER. The tissue repository obviously must be kept by the DOD; therefore,

why do you assume that it will remain viable and robust with no expert group of

pathologists and staff to input cases?
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Dr. WINKENWERDER. The Department continues to develop a plan for the optimal

use of the tissue repository and the staff requirements to support this use.

Dr. SNYDER. Why have you not fully analyzed the impact of closing the AFIP with its resulting effect on other federal agencies; e.g., Department of Veterans Administration and the U.S. Public health services?

Dr. WINKENWERDER. The VA and the United States Public Health Service are

members of the AFIP Board of Governors and have been involved in all discussions

concerning the impact of the Base Realignment and Closure plan on the Department

and their agencies. Both agencies collaborated on the capabilities to be retained

within the Department of Defense and will continue to be involved in planning for

the outsourcing of second opinion consultations.

Dr. SNYDER. Why have you not communicated your final decision to the appro- priate committees in the Congress? Why are the AFIP executive committee and

Board of Governors going ahead and eliminating positions in October of this year?

Dr. WINKENWERDER. The plan and timeline for the disestablishment of AFIP, ac- cording to the Base Realignment and Closure (BRAC) law, is contained in a report

to Congress that will be forwarded shortly. The execution of the BRAC implementation plan for AFIP is contained in Business Plan #169. In order to meet the savings contained in this plan, the manpower reductions at AFIP must occur in October of

2007. Therefore, the process to implement this reduction in force must begin now.

Dr. SNYDER. Autism—The FY07 John Warner National Defense Authorization Act

required the Secretary to develop a plan to provide services to military dependent

children with autism. The plan was required to address the education and training

requirements for providers, the standards for identifying and training individuals

with various level of expertise, and the procedures to ensure that these services are

in addition to those publicly provided. The report is not due until April 2007, but

a recent CDC report indicates the incidence of autism among 8 years olds is greater

than previously assumed. Thousands of these children are in the military health

care system and their parents are in need of support. What is the status of the plan,

will we receive it on time, and are there any early indications that the Department

will need legislative authority to implement any changes?

Dr. WINKENWERDER. The final report, in preparation at this time, will propose an

interim solution for improving the number and availability of TRICARE certified

providers of Applied Behavior Analysis (ABA). The Department expects to submit

the report to Congress in a timely manner (Summer 2007). At this time, the Department does not expect that legislative authority to implement the plan is required.

Dr. SNYDER. Health Care Costs—Health care costs in the direct care system are assumed to be lower than obtaining similar services from civilian community. While

both systems have similar services, they have different missions. Comparisons between the two currently are apples and oranges, has this comparison ever been

studied? If so, why not? Shouldn’t we understand the true costs before losing military capacity to the civilian sector?

Dr. WINKENWERDER. You are correct when you say that the different systems

have different missions and that, because of those differences, direct comparisons

are difficult. When detailed studies have been made on similar services, Direct Care,

for the most part, has been shown to be more expensive than obtaining those same

services from the civilian community (the notable exception is pharmacy where the

Direct Care system can obtain pharmaceuticals at Federal ceiling prices). However,

part of the additional expense of the Direct Care system is the result of its ‘‘other’’

mission, i.e., its primary mission of supporting the war fighters, especially in this

time of ongoing conflicts. We are now beginning an effort to quantify those mission

essential activities so they can be accounted for in future analyses of the true cost

of providing Direct Care services. It is still clear, however, that, for the infrastructure and military personnel we need for our primary mission, using those assets to

provide health care and maintaining those providers’ medical skills is better than

obtaining all of the beneficiary care in the civilian sector.

Dr. SNYDER. Medical Recruiting and Retention—The nation is facing a national

nursing and physician shortages, and the military health care system is not immune

from this environment. In addition, other health care providers, such as psychologists and pharmacists are also in high demand. What is Health Affairs doing to

proactively address this issue?

Dr. WINKENWERDER. Health Affairs is working closely with the Services to utilize

the significantly increased authorities in the National Defense Authorization Act for

Fiscal Year (FY) 2007—for Medical/Dental accession bonuses, Health Professions

Scholarship Program (HPSP) stipend, Financial Assistance Program (FAP) annual

grant, and Health Professions Loan Repayment Program (HPLRP) maximum annual amount. The implementation of these authorities and the budgeting for them

is currently being staffed with the Services. Some of the actions already undertaken
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have been to raise the Dental Officer Accession Bonus from $30K to $60K, the Four

Year Nurse Accession bonus was increased to $25K. Health Affairs has recommended that the Services implement incremental increases in the stipend for the

HPSP and FAP for the FY 2007–2008 school year. The Services and Health Affairs

are currently staffing a plan to implement and budget for the up to $400K accession

bonus for medical/dental critically short wartime specialties. The Services can also request Critical Skills Retention Bonuses, as the Air Force

has, to improve retention of psychologists, as the Army has for psychologists, pharmacists, nurses, and other allied health professions in specific year groups. Health Affairs and the Services are also working closely with the Quadrennial Re- view of Military Compensation to provide new ideas to restructure incentive and

special pay to meet the demands of the future.

Dr. SNYDER. Military to Civilian Conversions—The Navy’s share of Military-Civil- ian (Mil-Civ) conversions was recently increased. Given that the Marine Corps end

strength is increasing and Navy individual augmentation continues to increase, is

the Department monitoring the impact of military to civilian conversions on the

Navy medical system? Another concern is that some of the positions identified for

military to civilian conversions include doctors, nurses and mental health providers,

given the deployment demands on these communities, has there been any thought

of exempting these types of medical professionals from the military to civilian conversions?

Dr. WINKENWERDER. The Medical Readiness Review (MRR) evaluated military medical billets that had been identified by the Military Departments as excess to

readiness requirements to determine if they could feasibly be converted to civilian

or contract personnel at no additional net cost to the Department of Defense. Only

billets that met these criteria were selected for conversion, and the Military Departments agreed to these conversions. The Assistant Secretary of Defense for Health

Affairs has placed no restrictions or exemptions on the types of positions converted.

Rather, the Service Surgeons General and their staffs have maximum discretion in

determining what specialties (e.g., physicians, nurses, technicians, etc.) to convert

from military to civilian based upon the current and projected needs of each Service.

These conversions are not projected to have a detrimental impact on health care delivery capability or quality at Military Treatment Facilities and have no impact on

readiness capabilities.

In an action separate from the military-to-civilian conversions resulting from the MRR process, 901 Navy military billets were identified for elimination. This action

was taken based on programmed adjustments to active duty Navy and Marine

Corps end strength. The Department analyzed the health care usage patterns of active duty Navy and Marine Corps personnel and their families and determined the

appropriate reductions for Private Sector Care and In-House Care resources to reflect the end strength adjustments. The In-House Care resources were further allocated into Defense Health Program Operation and Maintenance reductions and

Navy Military Personnel reductions, to reflect the reduced requirement for military

labor. The net adjustment to Navy and Marine Corps end strength over the period

addressed by the Program Decision Memorandum is a decrease of 4.0%; the 901

Navy Medical end strength reduction is a decrease of 3.8% over the same time period.

The Department is committed to maintaining the military medical force structure

necessary to support readiness requirements, as well as to maintaining a superb

health care benefit for all of our eligible beneficiaries. We look forward to working

closely with the Committee and appreciate your continued support of the Military

Health System.

Dr. SNYDER. Mental Health—There have been a number of media reports regarding servicemembers that have returned from OIF/OEF and have exhibited symptoms of Post Traumatic Stress Disorder (PTSD). Some of these service-members

have indicated a reluctance to seek mental health services because of the stigma associated with mental health. What is Health Affairs doing to help reduce mental

health stigma? A military mental health professional indicated we do not have an

adequate number of mental health providers or the requisite training needed to take

care of the long-term psychological challenges that we may see as a result of OIF

and OEF. What is Health Affairs doing to prepare for the future challenges that

we may face in this arena?

Dr. WINKENWERDER. To reduce stigma, mental health education is fully integrated

and mandatory at multiple levels of military training, deployment, and post-deployment. For example, suicide prevention activities in all Service branches train

servicemembers at all levels to recognize others in distress at a low threshold. Specialized training programs exist for supervisors and leaders in suicide prevention.

In addition, most branches utilize Web-based and compact disc-based Leaders’
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Guides for Personnel in Distress to assist supervisors and commanders to appropriately manage members with 37 of the most common mental health stressors encountered in our population. Pre- and post-deployment briefings for members and

their families review anticipated stressors and ways to manage them, including referral resources. Substantial counseling resources are available to servicemembers

and their families with confidentiality and no stigma. These include confidential

screening using the free and confidential online service, utilization of chaplains with

full confidentiality, MilitaryOneSource that includes online, e-mail, phone, and faceto-face counseling with Master’s level counselors for prevention, education, and referral services; family support counselors; and family advocacy services. Members

requiring more intensive assistance are referred to mental health providers who

seek to respect confidentiality, consistent with mission need.

Dr. SNYDER. Traumatic Brain Injury—Much focus has been placed on the treat- ment of those with the visible injuries. Yet, not all Traumatic Brain Injuries are

visible, but early intervention and treatment are critical to recovery. How are we

assessing servicemembers who do not manifest overt signs of injury? Are we capturing TBI injuries adequately? Is there a tracking mechanism to ensure these

servicemembers do not slip through the cracks?

Dr. WINKENWERDER. Servicemembers in-theater who are exposed to a possible

TBI-producing incident, whether by fall, explosion, motor vehicle accident, or other

event known to create a risk for TBI, are assessed according to a clinical practice

guideline that was implemented in-theater in August 2006. This guideline requires

using a tool called the Military Acute Concussion Evaluation (MACE), which will

provide a reasonable assessment of whether a TBI exists as a result of that event,

regardless of other injury. It is clear that in the confusion and chaos of a major Improvised Explosive Device explosion with loss of life or serious injury, TBI in those

visibly injured, and in those otherwise not apparently injured, may be missed. We

are providing training to raise medical and leadership awareness of TBI as an injury that may impair the war fighting abilities of those affected, and so imperil

them and their fellow servicemembers if not identified and appropriately treated.

All servicemembers with injuries that require evacuation to Landstuhl Regional

Medical Center are assessed using the MACE if TBI was not previously documented. Starting June 1 2007, screening for TBI will be part of the Post-deployment

Health Assessment, the Post-deployment Health Reassessment, and the Periodic

Health Assessment.

Dr. SNYDER. DOD–VA Seamless Transition—For years both Departments have been attempting to develop a seamless transition for servicemembers, however, it

still seems as though there are a number of obstacles for servicemembers. Can you

provide us with a list of programs that have been implemented, and can you identify

what the status is of each of these programs?

Dr. WINKENWERDER. The Departments of Defense (DOD) and Veterans Affairs

(VA) are collaborating to coordinate transition of health care for servicemembers

and veterans, including those severely wounded during Operation Iraqi Freedom

and Operation Enduring Freedom. The objectives of coordinated transition include

ensuring continuity of care from DOD to VA health care providers; providing clear

and comprehensive benefit information to servicemembers and their families; and,

transferring medical records and results of separation physicals from the DOD to

the VA.

Severely injured servicemembers often require prolonged treatment and rehabilitative care. The DOD met this challenge by establishing specialty centers of excellence and partnerships with the VA. Key components of DOD and VA healthcare

for severely injured servicemembers include three DOD amputee care centers, the

Brooke Army Medical Center Burn Center, the Defense and Veterans Brain Injury

Center, and four VA Polytrauma Rehabilitation Centers (Tampa, Florida, Minneapolis, Minnesota, Richmond, Virginia, and Palo Alto, California).

The four VA polytrauma centers are designed to meet the needs of active duty

Servicemembers and veterans who experienced severe injuries resulting in traumatic brain injuries, spinal cord injuries, amputations, or visual impairment. From

March 2003 to December 2006, 342 active-duty servicemembers were treated in the

four polytrauma centers. In addition to the four polytrauma centers, 21 new VA

Polytrauma Network Sites opened in Fiscal Year 2006 to provide continuing care

to injured veterans. In addition, the VA provides care to injured veterans at 23 spinal cord injury centers and 10 blind rehabilitation centers.

The Military Severely Injured Center, MilitaryOneSource, and four Service-specific programs provide linkages to VA to ensure continuity of care as the

servicemember transitions to veteran status. The Military Severely Injured Center,

established in February 2005, provides 24/7 support to servicemembers and their

families, ensuring they are aware of all available options, and interacting with the
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involved agencies to ensure uninterrupted, highest-quality care. These programs

reach out to servicemembers, evaluate their needs, and coordinate referrals to programs to provide the appropriate services. Four Service-specific programs provide

assistance: the Army Wounded Warrior Program, Marine for Life, Air Force Palace

HART, and Navy Safe Harbor. Each provides counseling, employment assistance,

family support, and other services needed to transition to home and the community.

The critical elements for the transition of medical care from DOD to VA include:

• A thorough understanding of medical care capabilities within both agencies by

the involved medical providers,

• Clear communications of the transition plan between providers in each agency

and with the patient and patient’s family,

• Transfer of medical records at the time of transfer of the patient, and

• Continuation of communication after the transfer of the patient between the

medical providers in each agency and with the patient and patient’s family.

In August 2003, a joint DOD/VA program was established at Walter Reed Army

Medical Center (WRAMC) to provide case management for combat veterans. When

severely injured servicemembers need long-term medical care, VA social work personnel and VA benefits counselors work with them to coordinate VA services. This

joint program has expanded to nine other facilities: the National Naval Medical

Center, Naval Hospital Camp Pendleton, Naval Medical Center San Diego, and six

Army hospitals (Brooke, Eisenhower, Darnall, Madigan, Evans, and Womack).

Twelve VA social workers provide the linkage from these ten hospitals to follow-up

care at a VA Polytrauma Center, if continued inpatient care is needed. If outpatient

care is needed, the social workers provide the linkage to VA facilities near the

servicemembers’ homes.

The VA social workers and counselors assigned to the military hospitals are usually the first VA representatives to meet with servicemembers and their families.

They provide information about the full range of VA benefits and services, which

include health care and readjustment programs, disability compensation and related

benefits, the traumatic injury benefit provided under the Servicemembers Group

Life Insurance Program, as well as educational and housing benefits. As of February

28, 2007, there had been 7,082 VA referrals at the ten military hospitals.

Weekly video teleconferences are scheduled between WRAMC and the four VA

polytrauma centers. These provide ongoing communication between DOD and VA

physicians and nurses about patients who will be transferred. There is also communication between case managers at the Military Treatment Facility and the VA

polytrauma centers that takes place before transfer. In addition, Army liaison personnel work at the four VA polytrauma centers to facilitate communication between

the patients, families, health care providers, and to resolve issues that might arise

related to military pay, travel, family housing, and other problems.

Servicemembers who apply for disability compensation benefits under the Benefits

Delivery at Discharge (BDD) program undergo a medical examination while still on

active duty. The Program is a jointly sponsored VA and DOD initiative to provide

transition assistance to separating servicemembers who have disabilities related to

their military service. The program helps servicemembers file for VA service-connected disability claims prior to separation from service, so that payment of benefits

can begin as soon as possible after discharge. Under the BDD Program,

servicemembers can complete an application for VA disability compensation benefits

up to 180 days prior to separation. The single VA/DOD medical examination meets

the military’s needs for a separation physical and also fulfills VA’s examination requirements for processing the disability claim.

Dr. SNYDER. Unified Medical Command—The proposed unified medical command

issued by Secretary England is a departure from what the services were seeking as

a genuine Unified Medical Command, which sought to increase efficiencies and gain

savings. If the intent is to seek efficiencies and generate savings, why was the decision made to pursue a hybrid proposal as opposed to the UMC that was proposed

by the Services? Where all of the Surgeon Generals involved in the decision making

process? What were their recommendations on the UMC and how do they differ

from what Secretary England approved?

Dr. WINKENWERDER. Program Budget Decision (PBD) 753 directed the Under Secretary of Defense for Personnel and Readiness (USD(P&R)) to work with the Chairman of the Joint Chiefs of Staff to develop an implementation plan for a Joint Medical Command by the Fiscal Year (FY) 2008–2013 Program/Budget Review. A work

group chartered under the USD(P&R) and the Chairman, Joint Chiefs of Staff prepared recommendations and possible courses of action for a UMC. Each of the Service Surgeons General was represented on this work group. During the same time,

the Defense Business Board studied the issue and recommended one route to unifi-
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cation to the Secretary of Defense. Despite considerable effort, consensus was not

achieved on a specific solution. After due consideration, the Deputy Secretary of Defense approved a framework for Achieving More Jointness and Unity of Command

on November 27, 2006.

The approved framework consists of incremental and achievable steps that will yield efficiencies throughout the Military Health System (MHS). Economies of scale

are achieved by combining common functions. The structural and functional changes

create a foundation for implementing MHS Quadrennial Defense Review (QDR)

transformation while preserving a Service unique culture for each medical component. Each aspect of the framework supports principles of unity of command and

effort while creating a joint environment for the development of future MHS leaders. The concept includes accelerated consolidation of medical headquarters under

Base Realignment and Closure law, maintenance of USD(P&R) oversight of the Defense Health Program (DHP), and positions the MHS for further unification, if warranted.

Structural changes are included in the Deputy Secretary of Defense approved framework. These include:

• Establishment of a joint command for the National Capital Area, and a similar

command for San Antonio; • Establishment of joint commands for other multi-service markets; • Establishment of a joint command for the Joint Medical Education and Training

Center in San Antonio; • Combination of all medical research and development assets under the Army

Medical Research and Material Command; • Creation of a joint Military Health Directorate to consolidate shared MHS services such as human capital, finance, IM/IT, logistics, and force health

sustainment; • Re-focusing of the TRICARE Management Activity on the benefit and health

plan management and beneficiary support mission; and, • Health Affairs’ role in MHS policy development, strategy management, DHP

budget development and oversight, and legislative strategy will remain unchanged.

The Assistant Secretary of Defense for Health Affairs is working with the Services and Joint Staff to develop a detailed implementation plan for each of the elements

of the concept for more unity. The Service Surgeons General are directly involved

in this work. An implementation team will be formed during FY 2007 and will be

tasked with delivering the implementation plan within one year. All of the design

elements contained in the Deputy Secretary of Defense’s memorandum of November

27, 2006 are to be in place by the end of FY 2009. The road map for achieving increased unity will yield improvements in quality, efficiency, patient satisfaction, and war fighter support consistent with the MHS

Strategic Plan; each of the elements of the plan should contribute to the achievement of stability and uniformity of healthcare processes and resource acquisition:

• By establishing more unity of command in each of the major markets, the market leaders will be able to distribute resources across hospitals and clinics within a market to meet the needs of the entire population of eligible beneficiaries.

In addition, the increased span of control will enable improved continuity of

care and coordination of safety and quality programs.

• Through the establishment of a joint command for the Joint Medical Education

and Training Center, the MHS will improve the quality and consistency of

training for all enlisted, contributing to a culture of jointness and interoperability.

• The combination of all medical research and development assets under the

Army Medical Research and Material Command will foster better coordination

of research activities, eliminate redundant efforts, and focus resources on developing novel solutions for both the war fighter and the clinician.

• The creation of a joint Military Health Directorate to consolidate shared services has perhaps the most potential to improve quality of care, quality of service

and efficiency:

• The potential to combine data management and analysis functions should

lead to greater standardization, shared quality and performance measures,

and much improved workload and cost data needed for optimal management

decisions. This is also a critical element of the MHS QDR Roadmap for Medical Transformation.

• Coordinated implementation of the DOD Continuous Process Improvement

program incorporating lean and six sigma methodologies will result in reduced variation, improved quality, and elimination of waste.
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• Implementation of other shared services (human capital management, logistics, financial services, facilities planning, and design), will further enhance

economies of scale and optimal distribution of resources.

• By refocusing the TRICARE Management Activity on the benefit, health plan

management, and beneficiary support mission we will build upon gains already

achieved in the area of beneficiary support, effective communication of the

TRICARE benefit and performance based contracting for high quality health

care services.

• The co-location of the headquarters functions of Health Affairs, the TRICARE

Management Activity, the Army Medical Command, the Navy Bureau of Medicine, and the Air Force Medical Service will enhance efforts to achieve unity of

purpose for MHS policy, strategy, and financial programming and yield greater

consistency across the Services in program execution.

Taken as a whole, this set of incremental changes will result in more unity of effort by eliminating duplicative layers of command and control, leveraging efficiencies through combining common support functions, standardizing policy, training and doctrine for all our forces, rationalizing span of control at both tactical and

strategic levels, and improving resource management, transparency, and accountability. This set of structural changes will be the foundation for the continuing MHS

transformation that is described in the QDR Roadmap and the MHS Strategic Plan.

QUESTION SUBMITTED BY MR. MCHUGH

Mr. MCHUGH. What kind of look-see is your office, your department, doing to

make sure that we are going to not unnecessarily and very harmfully erode the ability and the availability of mental health positions, particularly in deployed areas,

particularly given the surge that we have talked a little bit about here today?

Dr. WINKENWERDER. We examine mental health staffing throughout the Department in order to maintain the current levels of filling uniformed positions, set by

the Department of Defense (DOD). In January this year, our staffing numbers indicated that, across DOD, 92% of mental health personnel positions were filled. There

were some imbalances between professions due to personnel fluctuations, with mental health clinical provider staffing ranging by specialty from 75% to 85%. When

trends suggest potential shortages of particular specialists in the future, the Services respond by offering incentives to improve accession and retention of needed personnel. Branch-utilized incentives include offering annual Critical Skills Retention

Bonuses as well as educational loan paybacks. Physician bonuses for psychiatrists

are adjusted for all services, as required. The DOD continues to monitor their ability

to attract and retain health care personnel and adjust incentives accordingly. Factoring in the need for deployable mental health assets should drive military-to-civilian conversion limitations.

Mr. MCHUGH. Can you give us an idea of how much of the $94 million, if any,

did we achieve in efficiencies in the 2006 budget? What did you do to reach them?

And what kind of efficiencies are we talking about when you are looking at $248

million for next year’s budget?

Dr. WINKENWERDER. The Fiscal Year (FY) 2006 Defense Health Program Budget

was reduced by $94 million in anticipation of efficiencies accomplished by the Services that would decrease costs. During the execution of the FY 2006 budget, efficiencies were achieved through a combination of implementing the TRICARE Uniform Formulary, which decreased drug expenditures in the direct care system for

all three Services, and the following Service-specific initiatives:

- The Army Medical Department focused on increasing inpatient and outpatient

market share, and rewarded successful facilities with additional resources earned

through the Prospective Payment System.

- Navy Medicine focused on the consolidation of dental activities into the organization structure of their medical treatment facilities, enabling elimination of duplicative overhead activities and the achievement of staffing efficiencies in dental and

support areas.

- The Air Force Medical Service focused on elimination of inefficient inpatient

care facilities, with reinvestment of personnel at locations where significant workload recapture potential exists.

For FY 2007 and FY 2008, the focus is for the Services to continue to build on

the FY 2006 efficiencies that were initiated and to continue to realize savings in

pharmacy expenditures produced by the TRICARE Uniform Formulary. In addition,

the Director of TRICARE Management Activity and the Service Surgeons General

are taking action to identify opportunities for efficiencies by identifying the most
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critical mission activities and then applying Lean Six Sigma methodology to achieve

process improvements.

Note the FY 2008 incremental increase in the Efficiency Wedge was reduced from

$248 million to $227 million to account for an overlap in cost reductions targeted

for a different initiative.

Mr. MCHUGH. If you could get the figures as to what we did save in 2006 and

what we did to save them, and also what the target is, where the target areas lie

with respect to the $248 million for next year.

Dr. WINKENWERDER. The Fiscal Year (FY) 2006 Defense Health Program Budget

was reduced by $94 million in anticipation of efficiencies accomplished by the Services that would decrease costs. During the execution of the FY 2006 budget, efficiencies were achieved through a combination implementing the TRICARE Uniform

Formulary, which decreased drug expenditures in the direct care system for all

three Services, and the following Service specific initiatives:

- The Army Medical Department focused on increasing inpatient and outpatient

market share, and rewarded successful facilities with additional resources earned

through the Prospective Payment System.

- Navy Medicine focused on the consolidation of dental activities into the organization structure of their medical treatment facilities, enabling elimination of duplicative overhead activities and the achievement of staffing efficiencies in dental and

support areas.

- The Air Force Medical Service focused on elimination of inefficient inpatient

care facilities, with reinvestment of personnel at locations where significant workload recapture potential exists.

For FY 2007 and FY 2008, the focus is for the Services to continue to build on

the FY 2006 efficiencies that were initiated and to continue to realize savings in

pharmacy expenditures produced by the TRICARE Uniform Formulary. In addition,

the Director, TRICARE Management Activity and the Service Surgeons General are

taking action to identify opportunities for efficiencies by identifying the most critical

mission activities and then applying Lean Six Sigma methodology to achieve process

improvements.

Note the FY 2008 incremental increase in the Efficiency Wedge was reduced from

$248 million to $227 million to account for an overlap in cost reductions targeted

for a different initiative.

QUESTIONS SUBMITTED BY MRS. DRAKE

Mrs. DRAKE. What are military members told in recent years when they sign up

to join the military? Are they told, ‘‘You are going to have affordable health care’’?

Are they told, ‘‘You have health care’’? What are they told, and what is their expectation?

Dr. WINKENWERDER. In accordance with the TRICARE Operations Manual, Chapter 12, Section 2, Paragraph 1.4, each managed care contractor is available to brief

recruiters three times annually. Additionally, each TRICARE regional office provides virtual briefings for recruiters and others interested in learning about the

TRICARE benefit.

New Servicemembers and their families are invited to orientations and TRICARE

briefings where information about TRICARE is provided. They are told they will be

covered under TRICARE but they will need to make choices between Prime, Standard, and Extra. We provide pamphlets that explain the military health benefit and

we also direct servicemembers to the TRICARE Web site which provides additional

detailed information about the benefit. Reservists are also provided informational

brochures and briefings to explain the new benefits under TRICARE Reserve Select.

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