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Hearing Transcript on The Veterans Health Administration’s Fiscal Year 2011 Budget.
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THE VETERANS HEALTH ADMINISTRATION’S FISCAL YEAR 2011 BUDGET
HEARING BEFORE THE SUBCOMMITTEE ON HEALTH OF THE COMMITTEE ON VETERANS' AFFAIRS U.S. HOUSE OF REPRESENTATIVES ONE HUNDRED ELEVENTH CONGRESS SECOND SESSION FEBRUARY 23, 2010 SERIAL No. 111-61 Printed for the use of the Committee on Veterans' Affairs
U.S. GOVERNMENT PRINTING OFFICE For sale by the Superintendent of Documents, U.S. Government Printing Office
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CORRINE BROWN, Florida |
STEVE BUYER, Indiana, Ranking |
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Malcom A. Shorter, Staff Director SUBCOMMITTEE ON HEALTH
Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public hearing records of the Committee on Veterans' Affairs are also published in electronic form. The printed hearing record remains the official version. Because electronic submissions are used to prepare both printed and electronic versions of the hearing record, the process of converting between various electronic formats may introduce unintentional errors or omissions. Such occurrences are inherent in the current publication process and should diminish as the process is further refined. |
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C O N T E N T S
February 23, 2010
The Veterans Health Administration’s Fiscal Year 2011 Budget
OPENING STATEMENTS
Chairman Michael Michaud
Prepared statement of Chairman Michaud
Hon. Henry E. Brown, Jr., Ranking Republican Member, prepared statement of
WITNESSES
U.S. Department of Veterans Affairs, Hon. Robert A. Petzel, M.D,, Under Secretary for Health, Veterans Health Administration
Prepared statement of Dr. Petzel
American Legion, Joseph L. Wilson, Deputy Director, Veterans Affairs and Rehabilitation Commission
Prepared statement of Mr. Wilson
The Independent Budget:
Blake C. Ortner, Senior Associate Legislative Director, Paralyzed Veterans of America
Prepared statement of Mr. Ortner
Eric A. Hilleman, Director, National Legislative Service, Veterans of Foreign
Wars of the United States
Prepared statement of Mr. Hilleman
SUBMISSIONS FOR THE RECORD
National Association for Veterans' Research and Education Foundations, Barbara F. West, Executive Director,
MATERIAL SUBMITTED FOR THE RECORD
Post-Hearing Questions and Responses for the Record:
THE VETERANS HEALTH ADMINISTRATION’S FISCAL YEAR 2011 BUDGET
Tuesday, February 23 2010
U. S. House of Representatives,
Subcommittee on Health,
Committee on Veterans' Affairs,
Washington, DC.
The Subcommittee met, pursuant to notice, at 1:05 p.m., in Room 334, Cannon House Office Building, Hon. Michael H. Michaud [Chairman of the Subcommittee] presiding.
Present: Representatives Michaud, Snyder, Teague, Donnelly, Halvorson, Brown of South Carolina, Boozman, and Buchanan.
OPENING STATEMENT OF CHAIRMAN MICHAUD
Mr. MICHAUD. We may as well get started. Mr. Brown is on the floor giving a 1 minute speech, and I know Mr. Teague is on his way over here, so we may as well get started now.
I would like to thank everyone for coming out this afternoon. The purpose of today's hearing is to examine the fiscal year 2011 President's budget request for the Veterans Health Administration (VHA) of the U.S. Department of Veterans Affairs (VA). The "Veterans Health Care Budget Reform and Transparency Act of 2009" provides for advanced appropriation for the VA medical care accounts and was enacted into law on October 22nd, 2009. In accordance with this Act, the President's budget requests fiscal year 2011 and 2012 funding for the VA medical care accounts.
The Administration requests $48.2 billion for VA medical care for fiscal year 2011, which includes the medical services, medical support, and compliance, and medical facility accounts of the VA. When medical care collections are included, the Administration's request is $51.5 billion for VA medical care, which is $4 billion or 8.6 percent above the 2010 enacted level.
In fiscal year 2012, the Administration requests $54.3 billion for VA medical care, which is about $3 billion or 5.3 percent above the 2011 request.
The fiscal year 2011, budget request addresses many of the shared priorities of this Subcommittee such as rural health, mental health, and homeless veterans.
The President's budget request for VA is a robust budget in the tradition of the significant funding increase that the VA will receive or has received in the past several years.
Through today's hearing we will examine the President's 2011 budget request for VHA, which includes a funding recommendation, as well as policy and legislative proposals for the medical care accounts of VHA.
In addition, we will examine the information technology (IT) and the construction resources for VHA, and we will explore whether the budget request for the VA health care system provides significant resources to meet the needs of our returning servicemembers, including those who deployed as part of the troop surge in Afghanistan.
Today we will hear from the VA's Under Secretary for Health, as well as Paralyzed Veterans of America (PVA), and the Veterans of Foreign Wars (VFW), who are co-authors of The Independent Budget (IB). We will also hear from the American Legion. I look forward to hearing testimonies.
[The prepared statement of Chairman Michaud appears in the Appendix.]
Mr. MICHAUD. I would like to recognize Mr. Boozman for any opening statement he might have? Mr. Teague or Mr. Donnelly, do either of you have an opening statement?
Mr. TEAGUE. No, and for the sake of time I will defer to the questions.
Mr. MICHAUD. Thank you very much. Without any further ado, I would like to recognize our first panel, Dr. Robert Petzel who is the Under Secretary for Health. He is accompanied by Paul Kearns, Robert Neary, and Brandi Fate. I want to thank all of you for coming today. I want to congratulate you, Doctor, for your appointment as Under Secretary of Health, I will look forward to working with you as we try to take care of the needs of the brave men and women who serve this Nation of ours. I have heard a lot about you, and look forward to your testimony today.
So without any further ado, Doctor?
STATEMENT OF HON. ROBERT A. PETZEL, M.D, UNDER SECRETARY FOR HEALTH, VETERANS HEALTH ADMINISTRATION, U.S. DEPARTMENT OF VETERANS AFFAIRS; ACCOMPANIED BY PAUL KEARNS III, FACHE, FHFMA, CPA, CHIEF FINANCIAL OFFICER, VETERANS HEALTH ADMINISTRATION, U.S. DEPARTMENT OF VETERANS AFFAIRS; ROBERT L. NEARY, ACTING DIRECTOR, OFFICE OF CONSTRUCTION AND FACILITIES MANAGEMENT, U.S. DEPARTMENT OF VETERANS AFFAIRS; AND BRANDI FATE, DIRECTOR, CAPITAL ASSET MANAGEMENT AND PLANNING SERVICE, VETERANS HEALTH ADMINISTRATION, U.S. DEPARTMENT OF VETERANS AFFAIRS
Dr. PETZEL. Chairman Michaud, Ranking Member Brown, and, distinguished Members of the Subcommittee, thank you for this opportunity to present the President's fiscal year 2011 budget and fiscal year 2012 advanced appropriation requests for the Veterans Health Administration.
Our budget provides resources necessary to continue our aggressive pursuit of the President's two overarching goals, to transform VA into a 21st Century organization and to ensure that we provide the highest quality of health care to our deserving veterans.
Before I begin, I would like to thank all of you and your colleagues in the Senate for your support as I take on the responsibility of managing the Nation's largest and best integrated health care system as the new Under Secretary for Health. There are many challenges and opportunities ahead, and I look forward to working closely with you to improve the health and well being of America's veterans. I also look forward to developing strong relationships with the veterans service organizations (VSOs), including those who appear today in support of the Independent Budget, and I thank them for their efforts on behalf to improve the lives of veterans.
During my confirmation, I pledged to the Senate that I would focus on three areas. Articulating a vision of our health care system and what it needs to become, more patient centered, providing more team care, and continuously improving itself. Number two, aligning the organization to achieve that vision. And number three, reducing the variation in our organizations, structures, business practices, and medical care.
I believe our budget supports these three strategic goals as well as the six high priority performance goals mentioned in my written statement.
VA's budget provides $51.5 billion for medical care in 2011, an increase of $4 billion over the previous year, or about 8.5 percent increase. This level will allow us to continue providing timely, high quality care to all enrolled veterans.
During 2011, we expect to treat 6.1 million unique patients, a 2.9 percent increase over the previous year. Among this total will be 439,000 veterans who have served in Iraq or Iran, an increase—in Afghanistan rather—an increase of nearly 15 percent from to 2010. Our budget request provides $2.6 billion to meet the health care needs of this population, a 20 percent increase from the previous year, 2010. This estimate reflects also the surge of troops that we expect in Afghanistan.
The treatment of this newest generation of veterans has provided stimulation to us to improve the treatment for conditions such as post-traumatic stress disorder and traumatic brain injury. We are increasing resources for an aging veteran population with chronic illness by increasing the funding for long-term care by 14 percent, and providing an almost 23 percent increase in money for non-institutional long-term care.
We will also strengthen access to health care for rural veterans through our new outreach and delivery initiatives, as well as expanding home-based primary care, telemental health, and telehealth services.
We will further expand health care eligibility for Priority 8 veterans in 2011. We estimate that approximately 100,000 new veterans will enroll because of this effort.
The 2011 budget provides $217.6 million to meet the gender specific health care needs of women veterans, an increase of more than nine percent over the 2010 level. We will be delivering better primary care for women veterans, and this remains one of the Department's highest priorities.
This budget provides the resources required to enhance access in our health care system by activating new and improved facilities, expanding health care eligibility, and making greater investments in telehealth.
We are requesting a substantial investment for our homeless program as part of our plan to ultimately eliminate veteran homelessness through an aggressive approach that includes housing, education, jobs, and health care.
VA will be successful in resolving these concerns by maintaining a clear focus on developing innovative business practices and delivery systems that will not only serve veterans and their families for many years to come, but will also dramatically improve the efficiency of our operations. By making appropriate investments today, we can ensure that higher value and better outcomes will endure for our veterans.
VA must provide timely, high quality health care in a medical infrastructure, which is on average 60 years old. In 2011, we are requesting $1.6 billion to invest in our major and minor construction programs to accomplish projects that are crucial to right sizing and modernizing VA's health care infrastructure, providing greater access to benefits and services for more veterans closer to where they live, and adequately addressing patient safety and other critical facility deficiencies.
The 2011 budget request for VA major construction is $1.15 billion. The $467 million request for 2011 for minor construction is an integral component of our overall capital program.
Minor construction permits VA to realign critical services, make seismic corrections, improve patient safety, enhance access to health care, increase capacity for dental care, enhance patient privacy, improve treatment of special emphasis programs, and expand our research capability.
Further, minor construction resources will be used to comply with energy efficiency and sustainability design requirements.
VA's 298,000 employees are committed to providing the quality of service needed to serve our veterans and their families. They are our most valuable resource. VA is fortunate to have public servants that are not only creative thinkers, but also able to put good ideas into practice.
With such a workforce and the continuing support of Congress, I am confident we can achieve our shared goal of accessible, high quality, timely care and benefits for our Nation's veterans.
Thank you again for this opportunity to appear, and my colleagues and I are prepared to answer your questions.
[The prepared statement of Dr. Petzel appears in the Appendix.]
Mr. MICHAUD. Thank you very much Doctor, we really appreciate your testimony. As I stated in my opening remarks, I am looking forward to working with you.
I now recognize Mr. Teague for any questions he may have.
Mr. TEAGUE. Good afternoon, thanks for coming to all of you and thanks for participating in this hearing. And Mr. Chairman, Ranking Member, thank you for allowing me to ask a couple of questions here.
A couple a weeks ago when the Secretary said that after the 26.4 percent medical care budget increase since 2009 we are going to be working on reducing the rate of increase in the cost of the provision of health care by focusing on areas better leveraging acquisitions and contracting. Could you expand on that a little bit more?
Dr. PETZEL. Yes, thank you Congressman Teague.
Just to give you an example, I come from Minneapolis Network 23 where I was the network director, and in that network we consolidated our imaging or radiology services and consolidated our purchasing for the radiology services, to wit, we saved in the purchasing of seven new CAT scanners, about $3 million. This sort of consolidated purchasing across the entire system I think is going to provide us with substantial, substantial cost reductions. I also think that by standardizing our services, in again many of our networks, we are going to be able to realize substantial savings.
Just one more example, the Prosthetics Service several years ago began a process of standardizing some of their prosthetic equipment, and one of the things that they standardized was hips. We had about 35 different brands and varieties of artificial hips that we used when we did a hip replacement in patients. And we have consolidated that down to I believe about five different prosthetics that meet everybody's needs at a substantial savings. I think that doing this across the system is going to entail substantial savings.
Mr. TEAGUE. Coming from a rural district, and I mean a really rural district where we have a lot of people that have to travel 300 miles to get to a hospital, and knowing that there was an additional $30 million in the medical facilities account so that we could have more community-based outpatient clinics (CBOCs) and everything open up, I was just wondering how many of those have we added, and how many do we intend to continue adding in the 2011 budget? And if so, how many?
Dr. PETZEL. By the end of 2010, and it is actually going to be spilling into 2011, because we are not going to be able to activate all of the CBOCs that we had planned for 2010, but by the end of that period we expect to have 862, I believe, community-based outpatient clinics, and that is an increase, I think, of almost 100 over what we had in 2009. Fifty-one of these, Mr. Kearns is pointing out, are in rural areas. So there is going to be a substantial investment in 2010 extending into 2011 in rural CBOCs.
Mr. TEAGUE. Okay. Is there a list somewhere where we can see where they are projected to be? I mean, because as I say, with people traveling the distances that they do, it is pretty relevant in our district.
Dr. PETZEL. Post hearing we can provide you with a list I am quite certain, yes.
[The VA provided the answer in Response to Question #2 of the Post-Haring Questions and Responses for the Record, which appear in the Appendix.]
Mr. TEAGUE. Very good, thank you, and thank you for attending today and for your answers. I yield back.
Mr. MICHAUD. Thank you. Mr. Donnelly?
Mr. DONNELLY. Thank you, Mr. Chairman.
Dr. Petzel, in regard to the major construction funding, additional locations were put on the list to a total of 61 now and two were funded. What is your long-term plan?
Dr. PETZEL. The $1.1 billion in 2011, Congressman, is for five projects. Two of them—three of them rather—were ongoing.
Mr. DONNELLY. I am sorry, I should say two new places were funded.
Dr. PETZEL. And there were two new places, that is correct. Alameda and Omaha.
I will ask Mr. Neary in a minute to comment on the list and how we deal with that list, but there is a substantial list of major projects, and this makes I think a substantial dent in the monetary amount at least, but there still are, as you point out, a large number of projects on the list, and I would ask Mr. Neary if he could comment on the size of that list and how we move through it.
Mr. NEARY. Thank you, Doctor. Congressman Donnelly, as Dr. Petzel indicated, I think the major construction proposal for fiscal year 2011 is a very robust proposal, but we do have—
Mr. DONNELLY. But it only includes two, two new places.
Mr. NEARY. It only includes two new starts. We have been fortunate with the support of the Congress to receive funding levels in the approximately $1 billion range for the last 3 years, substantially higher than the past, so we are headed in the right direction, I think. We evaluate all the projects that are proposed and prioritize them to the extent that we believe the most important projects rise to the top of the list. We are working down that list, but it will take some time to go through the list that is displayed in the 5-year plan.
Mr. DONNELLY. So those 61 are included in a 5-year plan?
Mr. NEARY. In the volume that submits the construction budget and the last half of that volume is the VA's 5-year capital plan, and it identifies the projects that we have prioritized, yes.
Mr. DONNELLY. So is it your expectation that those 61 will all be started within a 5-year period?
Mr. NEARY. It is unlikely that they will all be started within 5 years. I believe that the value of that list is approximately $13 billion, and obviously the budgets that we are seeing are while good will take a little longer than 5 years to work through them.
Mr. DONNELLY. Thank you very much..
Mr. MICHAUD. Mrs. Halvorson?
Mrs. HALVORSON. Thank you, Mr. Chairman, and congratulations, Dr. Petzel, on your confirmation, and I know I just wanted to let you know that I worked very closely with Dr. Cross on a medical facility in my district that I am hoping to bring to Joliet, Silver Cross Hospital, I am sure your wonderful staff has kept you up to date, or if not, I am sure they will, and I just didn't know if there was any light that you would like to shed—shed any light on this for me maybe or any updates that maybe you want to know, or if there is any questions that you have for me.
Dr. PETZEL. Well, Congresswoman Halvorson, that is incredibly timely. I was just told not 5 minutes ago that we just finished a site visit.
Mrs. HALVORSON. Yes.
Dr. PETZEL. And the word that came back is that this is an excellent facility.
Mrs. HALVORSON. It is.
Dr. PETZEL. So we are very optimistic that the Silver Cross Medical Facility is going to meet our needs and it is going to work very well into our system.
Mrs. HALVORSON. Great, because it is something that is so very important to any district. And I know we had the district work period last week, and everywhere I went people wanted an update, and this is something that we are expecting to come to fruition, and I just wanted to make sure that it was always on the forefront of your memory and on your radar screen. So very, very important to us.
Dr. PETZEL. And it is very important to us.
Mrs. HALVORSON. Because I think the more that—and I know Chairman Filner has been out there and I know Secretary Shinseki is coming out, and we haven't quite found the date yet, but—and you had another site visit, so I just wanted to reiterate our concern and how important it is to us.
We have also seen substantial increases in the past few years in my district in terms of the veterans that rely on the VA care, so I certainly have concerns. I think that the minor construction budget doesn't really reflect the increases in the need for veterans care, so I am really concerned about that. And maybe you can shed a little more light on why these budget slashes and why for the funds for the minor construction projects, especially in Illinois and in my area.
Dr. PETZEL. Thank you, Congresswoman. Again, I will let Mr. Neary comment in a minute.
Just to make a statement. The minor construction budget, as I understand it, is the second highest request that has been made for minor construction in the history of the VA. It is a large amount of money relative to what we have been seeing before, but as you point out, and I think as Mr. Neary will point out, it is not going to completely address our list of minor projects.
Mr. NEARY. Certainly correct. Similar to the major construction appropriation, in the last few years minor construction has been at an all time high in terms of funding levels. And as Dr. Petzel said, this is the second largest request that has been made for minor construction. The first largest being in fiscal year 2010, but it is less than fiscal year 2010, and we will be looking to ensure that those funds are used most judiciously to bring the most value to our facilities programs.
Mrs. HALVORSON. So just so you know we are just really concerned that it doesn't meet the needs. As the needs are going up, the last thing we need to do is cut those projects that we want to keep on track.
So you know, I appreciate you all being here, but my staff and I will be constantly letting you know what is going on in my district. So thank you all for being here. It is good to see you.
Mr. MICHAUD. Thank you. Mr. Brown?
Mr. BROWN OF SOUTH CAROLINA. Thank you, Mr. Chairman, and thank you to the witnesses who came, and particularly Dr. Petzel, glad to have you on board, congratulations for this new level of service that you and all the other support folks in the VA.
I think we have a good health care budget in this cycle, and I am certainly pleased to support it.
I am a little disappointed in one project that we have been trying to move forward since 2006, what we always refer to as the Charleston model. This was a combination of services between the VA and the Medical University of South Charleston, and we actually put I think it was like $36.8 million in the Reauthorization Bill, I guess Benefits and Health Care Information Technology Act of 2006, but nothing has actually moved on it since then. And I noticed in this particular budget there is no funding available and it hasn't been addressed.
And since we have all of you here in one room, if you all could kind of help me go through this and kind of give me an idea, you know, of exactly what might be going to take place, and if there is a timeline that you are working with that you might share it with me.
Dr. PETZEL. Thank you Congressman Brown. I am in a general sense familiar with the history of the project in Charleston, but not with the specifics, and I think I would ask Mr. Neary if he could—or Ms. Fate if she could comment on that, please.
Ms. FATE. Thank you, sir. Based on the assessment of the workload increases as well as the space deficiencies as well as the facility condition assessments of the Charleston VA, it was assessed that a new hospital wasn't the most advantageous for the Charleston VA Medical Center, but instead an expansion to decompress the facility, more in an outpatient setting.
So the request that has come forward is to acquire the Naval Hospital, and through their Base Realignment and Closure (BRAC) process–through the Navy's BRAC process. And so that project was submitted for consideration in the fiscal year 2011 process and was ranked 51 out of 61 priorities, and so it wasn't—and at the same time we are also waiting on the Navy to decide which facility is going to get the facility based on their BRAC process.
Mr. BROWN OF SOUTH CAROLINA. I know I talked about that with the Secretary and I know that he was concerned about funding, and I know that if it is going to be part of the BRAC process, it looks like it could be some kind of lateral transfer without any dollars involved. That is generally the way that the BRAC process works. I know that when they closed Joel's shipyard, most of that property actually deeded over to the City of North Charleston, and so I mean certainly if you are going to move it into a government entity, you certainly ought to be able to do that within the confines of the Federal Government.
But what concerns me about the Charleston model, and if you are familiar with the area—in fact we tried to get some money and we did get a few dollars in the stimulus where the flooding is such a major problem. The roads adjoining to the VA hospital are under water if the right rains come and the tide is at the right place, so we got $10 million in this last stimulus payout back in—last Wednesday, so that— what concerns me is right after Katrina hit New Orleans, we actually went down and saw some of the facilities, and we recognize that the VA hospital there in New Orleans was not damaged, but because of the flooding and because of the lack of power we assumed that building was not going to be used. Are you all tearing that down is what the—what are you—are you reusing the old VA hospital in New Orleans, or are you going relocate it?
Dr. PETZEL. I will let Mr. Neary comment on that, Congressman.
Mr. BROWN OF SOUTH CAROLINA. Okay.
Mr. NEARY. Certainly. Presently the bulk of the former hospital is closed. We are operating an outpatient clinic in the facility, but we are in design for a new VA hospital that will be located a mile or two away, and we have funding. We have partially funded in previous budgets. We have the final incriminate of funding in the fiscal year 2011 budget. We expect to beginning the first, all be it a small phase of construction in the next 2, 3 months, and then in fiscal year—later in this fiscal year and through 2011 we will be awarding further contracts to construct a new facility.
Mr. BROWN OF SOUTH CAROLINA. And I might bobtail a little bit on that. That is exactly my idea of the Charleston model, is we are basically in that same zone. The VA hospital is actually in a lower location than say some parts of Medical University.
We were hoping that by being more proactive we could be able to address the issue before another Hugo would come in, and we had Hugo back in 1989, which was I guess the same intensity as the storm that hit New Orleans back in I guess 2006, or 2005, when it was. But so we were hoping by putting that money in that Reauthorization Bill, it would give some initiative to actually jump start that project, and I was hoping that somehow or another we would be able to be moving.
The Medical University is actually in a rebuilding mode now. They are going to probably replace most of their facilities, and by doing so, we thought it would give us a good opportunity to be able to bring the VA and the Medical University closer together. Some 95 percent of the doctors that actually treat those patients at the VA hospital have affiliation with the Medical University, so it would seem like it would just be a proper thing to be able to bring them in a more closer proximity.
I know the VA hospital itself is in pretty good shape, but I am telling you the location we have is going to be at risk if we have another major storm that hits.
So, Dr. Petzel, I hate to just give it to you on the first day that you testify before us, but it is a major concern of ours. Like I said, we have been working with it since 2006. It seems like we are the only one that has the vision, and I am just trying to share that with other people, maybe somebody else might be able to sense the same problem that we find. But I am telling you it was pretty obvious to me when I went to that fine facility in New Orleans and recognized that it is not going to be able to—although it withstood the winds, the mold is going to actually take it down.
Dr. PETZEL. Well Congressman Brown, I will review the circumstances in Charleston with our construction facilities management people, see where that stands right now, and become acquainted with the details.
Mr. BROWN OF SOUTH CAROLINA. I appreciate it. Thank you very much.
I apologize, my southern hospitality just slipped me for a minute. We would be happy to accommodate you any time you want to come.
Dr. PETZEL. Congressman, thank you very much.
Mr. BROWN OF SOUTH CAROLINA. Thank you.
Mr. MICHAUD. Thank you, Mr. Brown.
Medical IT, as you know, is an integral part of the VHA health care delivery system. My concern is whether VHA and the IT system are working collaboratively in a way that will help expedite the process of getting a facility online. If the fiscal year 2011 budget request includes about $930 million in medical IT support, which is a decrease of about $150 million from the 2010 levels, what is the rationale for that decrease?
[The VA subsequently provided the following information:]
Facility activations are a top priority for Office of Information and Technology (OI&T). All field Information Technology (IT) managers are empowered to meet IT activation requirements in concert with the activation timelines established by VA facility leadership. OI&T Field Operations staff are members of the facility project planning teams that develop, schedule and activate new facilities, services and programs.
In response to the question regarding the rationale for budget decrease of medical IT, we offer the following:
There are numerous one time or unique fiscal year activities that occur in FY 2010 that are not occurring in FY 2011 or are recurring at a different funding level.
For example:
Life Cycle Management decreased by $28.939 million;
Wireless decreased by $47.967 million;
Engineering Support Contractor Service was reduced by $15 million to $0;
Enterprise backup solution was reduced by $16.5 million to $0; and
The National Archive Project was reduced by $12 million to $0.Activations costs in FY 2010 are a one-time investment that will change in FY 2011 based on the nature, scope, and completion of ongoing construction work across the VA system. This includes major construction, minor construction, non-recurring maintenance (NRM), and bringing on-line new Community Based Outpatient Clinics (CBOCs). The drop in funding from the FY 2010 Current Estimate to the FY 2011 President’s Submission is the result of the a thorough review of the FY 2010 Medical IT Support needs (licensing and maintenance agreements), having taken place during the execution review for FY 2010. No such review has yet taken place for FY 2011. During the summer of 2010, OI&T, working with its VA business partners, will conduct a similar review of FY 2011 execution needs and necessary adjustments will be made to this and other programs prior to the start of FY 2011.
Mr. MICHAUD. My second question is, some folks within the VA system nationwide have been concerned that there has been a lag between VHA and IT that seems to be delaying some of the projects that are needed out there. So those are my two questions relating to IT.
Dr. PETZEL. Thank you, Mr. Chairman. I want to make just a general statement about VHA and IT. I have been working in the central office as the Acting Principal Deputy Under Secretary for the last 9 months, and I have been impressed with the change in tenor, if you will, that has occurred with the ascendance of Roger Baker as the Assistant Secretary for IT.
There is really a very, very new wind blowing through that organization, and the level of cooperation is probably much better than it had been before. And I am encouraged that we are going to be able to eventually be on the same path and get our needs met in an expeditious manner, but I think it is going to take some time.
Having said that, I don't know what the change in the IT medical budget is. We would have to get back to you after I talk with Mr. Baker.
[The VA subsequently provided the following information:]
Veterans Health Administration (VHA) and VA’s OI&T are working very closely together throughout the entire lifecycle of project and program development. Staff, managers and leadership in both VHA and OI&T are demonstrating a strong and consistent commitment to completing projects on-time and on-cost.
VA however, has experienced IT project delays. A review of these projects led to the development of the Program Management and Accountability System (PMAS), an IT project management framework that uses the best practices from various management and accountability methods.
All programs and projects are now developed and managed under PMAS. This level of standardization in project management and development is a fundamental change in the way VA develops programs and conducts oversight and accountability. Key attributes of PMAS include: building in six-month increments, frequent customer involvement, adherence to milestones with frequent milestone reviews, customer acceptance of functionality, and a practice of allowing only three strikes (missed milestones) before the project is halted or terminated. In the event of a halted or terminated project, the entire project, along with its managers, will come under intense scrutiny, which facilitates a culture of personal accountability. PMAS is already demonstrating its value in improving adherence to scheduled milestones and project delivery dates.
VA senior leadership continues its efforts to improve communication and coordination between VHA and OI&T, which is evidenced by the Deputy Secretary’s personal involvement in monthly Operational Management Reviews of VHA/OI&T programs and projects. This commitment when combined with the recent implementation of PMAS accountability and reporting standards, has significantly enhanced VA’s ability to quickly and efficiently produce and deploy systems to support the services that VA provides to our nation’s Veterans.
Mr. MICHAUD. Thank you. I also know the VA has been working collaboratively with the U.S. Department of Defense (DoD) on the Virtual Lifetime Electronic Records (VLER). How is that project moving forward? Has it been fully developed? Are there any delays or any changes that need to be made?
Dr. PETZEL. Well thank you, Congressman. This is an incredibly interesting project. Virtual Lifetime Electronic Record is the beginning of the attempt to create a completely inter-operative medical record across the Nation. The first pilot was set up in San Diego between the VA, Kaiser Permanente and the DoD. It began modestly with just a very few elements being shared using the national health information network. The pilot tested very successfully. There are approximately 1,500 patients from both sides that are enrolled in this and for which we are sharing information.
As we speak, the amount of information that is available is being expanded, and we are also beginning to develop the second pilot site, which I believe is going to be in Hampton, Virginia. In our view, it has been a very successful pilot. It is going to require several years of development until it is fully implemented, but we believe that this is going to be the demonstration of how the Nation can be sharing its medical records not only within the government but across the private sector, and I am very encouraged.
Mr. MICHAUD. Thank you. Moving on to a different topic; grants to States for extended care facilities. There has been a reduction of about $15 million in that count. What is the rationale for this reduction? What I have heard from a lot of the State veterans nursing homes is that there is actually a backlog of about $405 million where the States have already committed dollars for construction.
Dr. PETZEL. I will ask Mr. Kearns to comment on that in a minute, but my understanding is that a significant amount of American Recovery Reinvestment Act (ARRA) money was used in the State homes grant program, and I think if you compare 2011 to 2010 and take out that stimulus money that went in, we see a rather substantial increase.
But Mr. Kearns, could you comment more specifically?
Mr. KEARNS. Yes, sir. Basically in stimulus funding we had $150 million for the grants, and that is progressing very nicely. And then it has to be matched with the States. We have another $85 million in this budget for fiscal year 2011. So we feel that we are going to be able to continue very good progress in that area.
Mr. MICHAUD. But where the States are already ready to go, why wouldn't you want to increase that amount so they can get those projects up and running?
Mr. KEARNS. I think we would need to get back with you on the specifics, sir. I do know that in a couple of the instances when we had the high priority items in the stimulus money, some of the States could not match with their funding—the timing didn't fit and they couldn't match so we had to slip that and put them into the next year.
So I think it varies State by State as to what their specific condition is as to whether they are ready to match at any given time, largely because of the current economic conditions. But we can get you the specifics back.
[The VA subsequently provided the following information:]
The backlog of approximately $405 million has been reduced to two projects with an estimated cost to the Department of Veterans Affairs of approximately $43 million. This was accomplished as a result of the FY 2010 regular appropriation of $175 million for the State Home Construction Grant Program, the additional American Recovery and Reconstruction Act appropriation of $150 million, and the withdrawal or deferral of certain projects at the request of the States. Currently, there is no Priority Group 1 backlog of renovation projects (including renovations to protect the lives and safety of Veterans) or of new construction projects in States with a great need for new nursing home beds. Priority Group 1 projects are those for which the States have committed matching funds. VA is confident that the budget request of $85 million for FY 2011 will be sufficient to fund all new Priority Group 1 Life Safety and other renovation projects and all new construction projects in States with a great need for new beds.
Mr. MICHAUD. Thank you. And there has been actually an increase in mental health, about $410 million from fiscal year 2010 to fiscal year 2011. Are there any new mental health programs that you plan on implementing with the additional funding, or does that just reflect an ongoing need?
Dr. PETZEL. Excellent question, Chairman, and that basically is the ongoing needs. We do not have any specific new programs in mental health. We want to consolidate and make as vibrant the things that we have.
As you know through both our own actions and Congress's actions over the last 3 or 4 years there is been a huge increase in our mental health. We have added since 2005, 5,000 mental health workers, and just in this last year we added almost 2,000 new mental health workers. So we think we have the programs that we need, we think we have the people that we need, and it is a matter of making sure these programs work during this year.
Mr. MICHAUD. Also, in the previous budget we increased funding so we can start reenrolling Priority 8 veterans. What have you done specifically to increase reenrollment of Priority 8 veterans? Have you met your initial goal?
Dr. PETZEL. Thank you, Congressman. The goal was approximately 200,000 new enrollees in 2010. As you know we increased the threshold in the means test by approximately ten percent, and made eligible I think over 300,000 new enrollees theoretically, and we expected to see about 200,000 of those come.
There has been an extensive outreach program with the county veteran service officers. We have mailed letters to everybody that had been denied enrollment previously, but we have not met our goal. We have enrolled a substantial number of new Priority 8's and we have enrolled a larger number of Priorities 5 and 7 than previously. We think that some of these Priority 8's, because of the economic conditions, have moved into categories 5 and 7. And we look at those people as being people who would have otherwise been in our new Priority 8.
But I would ask Mr. Kearns if you can add anymore specifics to that.
Mr. KEARNS. No, sir, that is all. We are in the fiscal year 2011 budget raising that threshold from 10 percent to 15 percent, and we are aggressively marketing through different media sources to get to those potentially eligible veterans.
Mr. MICHAUD. Thank you. My last question relates to some of the earlier questions from Mr. Donnelly and others dealing with access to health care in rural areas. The Capital Asset Realignment for Enhanced Services (CARES) process identified several different access points. If you look at some of those access points it would probably be fair to say that a lot of them are probably at places where we also have a Federally qualified health care facility.
Have you looked at the CARES process and determined whether or not the access points that were recommended under CARES are still valid? And if so, are you looking at working with the U.S. Department of Health and Human Services (HHS) to see whether or not there might be a qualified health care clinic in that area that might overlap? Can you collaborate with HHS to try to get more of these access points up and running sooner rather than later so we can start taking care of veterans in the really rural areas?
Dr. PETZEL. Thank you, Mr. Chairman. Each year, starting at the facility level, moving up through the network level, and finally coming to Washington we ask for an evaluation of access that includes a review of pending access points as well as new.
I think, as you realize, not only have we almost completed activation of all of the CBOCs that were identified in the CARES process, there have been many, many other CBOCs that have been added. I think since CARES began it would be numbered in the hundreds that we have added in terms of community-based outpatient clinics.
So I think the process of making sure that the CARES, CBOCs are taken care of is well in hand.
The question whether we are maximizing the possibilities with the community health centers remains open, and I think that we need to have a renewed effort at looking at how we can interact with the community health centers. I am not familiar with what kind of efforts have been made in the past, but it is something I am interested in pursuing. They is another Federal agency and we should be in the process of cooperating with another Federal agency to see if we can maximize the benefit of the Federal dollars we had. So we will be examining that.
Mr. MICHAUD. Thank you thank you, Doctor.
Mr. Boozman?
Mr. BOOZMAN. Thank you, Mr. Chairman. I guess I would like to follow up a little bit. I know that you have touched on this a little bit.
In regard to the mileage reimbursement, my question is where is the money coming from? Does that come from the Veterans Integrated Services Network (VISN) or does that come from the central office? Are we accounting for the fact of our rural districts, our rural hospitals? I would like to know all of the different factors that go to work in regard to the payment of that. I know that it has been discussed and we have a tremendous increase. Where is the money coming from that pays for that?
Dr. PETZEL. Thank you, Congressman. We have had extensive discussions about this. There is a 23 percent increase in the money in our budget for patient travel. I think the figure now is $798 million. That is part of our budget. It is distributed as part of, and correct me if I am wrong, Mr. Kearns, it is part of the veterans equitable resource allocation (VERA) distribution. So based on the workload that each one of the networks has they would be getting a portion of that money. Then it is the responsibility of the networks to ensure that that money gets distributed to the place where it is needed.
Mr. BOOZMAN. But would there be some allocation based on the fact that maybe if you had a rural hospital that didn't have as much tertiary care and things, is it distributed that way also if there is more travel involved?
Dr. PETZEL. Congressman, I will ask Mr. Kearns in a minute to comment on that more specifically.
Let me give you my experience from the network that I used to direct in Minneapolis, which is quite rural. We would distribute the money for patient travel based upon previous years' experience. So we know that the Fargo VA medical center as an example—
Mr. BOOZMAN. Right.
Dr. PETZEL[continuing]. Has a disproportionately high need for money because they bring people from as far as 400 miles to the Fargo hospital from far western North Dakota. So our distribution would have been based upon previous use and current need. Whereas the Minneapolis VA medical center, which serves primarily an urban area, would not need proportionately as much travel money.
So the travel money wouldn't go out just based on the workload, it would go out with some cognizance of the ruralness or urbanness of the facility and its need.
Now Mr. Kearns, you want to make a comment??
Mr. KEARNS. No, sir, that is correct. We do not separately allocate the travel money, it is part of the basic allocation to the networks, and the networks make that decision.
However, we do have a large increase in the budgeted fiscal year 2010 because the rate of 41.5 cents went up last year. We feel we will have the largest experience this year and that money is out in the system not specifically targeted to travel, so at specific locations if they experience more than they had, we would expect them to fund that, if they experience less they wouldn't have as much requirement in that area.
In this current budget, we are funding in fiscal year 2011 and 2012 average increases above that, but we are not planning in the budget to increase that rate of 41.5 cents.
Mr. BOOZMAN. Okay, very good. In regard to the extra cost for the fee-based services in New Orleans, where does that come from? Does that come from Central Office or is that coming from VISN 16? Is that a nationwide sacrifice or is that a sacrifice of that particular VISN?
Dr. PETZEL. Congressman, that money would be expected to come out of the budget from VISN 16. And that has been taken into account in terms of the total amount of money that VISN 16 would get, and then they would again distribute that money based upon the need.
So there is nobody else that is not getting care because we have an excessive fee basis need in New Orleans right now.
Mr. BOOZMAN. Okay. And the hospitals that are growing in other words that have the significant percentage of increase, nine, ten percent increases, whatever it may be, do you account for that in your budgeting also?
Dr. PETZEL. Yes, Congressman, we do, and I will again let Mr. Kearns explain in a minute, I will just make a general statement.
The VERA model puts the money where the work is. That is the real salient feature of VERA. So if there is a facility that is growing more rapidly than another facility or a network that is growing, they are going to get more money than that facility that isn't growing as rapidly. Would you like to make a comment?
Mr. KEARNS. That is correct, sir. And then in addition to that, many times in those facilities that are growing some of those veterans also have health insurance so the collections will also grow, and those collections stay with the facility where the veterans are treated.
Mr. BOOZMAN. Okay. Thank you, Mr. Chairman. Again we appreciate your hard work. I know this is difficult, but like I said, we appreciate your service for veterans. Thank you.
Mr. MICHAUD. Mr. Snyder?
Mr. SNYDER. I am sorry I wasn't here for the earlier part of the meeting.
Dr. Petzel, what is status of funding for physicians? Do you have all physician slots filled that you want with adequate funding, or do you have slots that you would like to have filled and don't have adequate funding for?
Dr. PETZEL. Congressman, thank you for the question. I am going to have a little soliloquy about physician reimbursement for just a second if you don't mind.
First of all, we have enough money to purchase the services of all the physicians that we need. And fortunately with the relatively new physician pay bill that Congress is responsible for, we are able to pay in a general sense salaries that attract the physicians that we need. We do have occasions in some remote areas, some difficult-to recruit areas even for the private sector, where we sometimes have difficulties recruiting. But, we have been able to meet the needs of our system for physician services.
Mr. SNYDER. So if somebody tells me that there is some empty physician slots some place and they are told the reason they are not being filled is there is not adequate funding that is inaccurate?
Dr. PETZEL. It would be inaccurate in my experience. I am not aware, and I have not been told about, any place that is not able to recruit its physicians because it doesn't have adequate budget.
Mr. SNYDER. Great, thank you.
Dr. PETZEL. And I would like to know about that. Specifically, if there is a place, let's talk to you about that. Please talk to us.
Mr. SNYDER. All right. Thank you.
Mr. MICHAUD. That is something we actually talked about beforehand, and that is a concern that I have, because I have heard the same thing about hiring freezes due to a lack of funding.
This Subcommittee will be looking in more detail at the VERA model. Getting back to Mr. Boozman's question about mileage reimbursement, I will use Togus as an example.
Dr. Petzel, you mentioned the VERA model puts the money where the work is, and that might be the cause of some of the problems that we are seeing in really rural areas. For instance, in Boston a lot of the medical care involves tertiary care and you have veterans who have to travel 9, 10, 12 hours to travel to Boston whereas they could actually get that care locally. But it is to the advantage of the VISN 1 office to have them come to Boston because that is where the money goes, rather than to really rural areas.
We will follow up with additional questions on a more detailed break out on how the VERA funding is distributed. We have also asked for specific detail on this information for VISN 1. I only want one VISN to really focus on, but we haven't received that information yet and we have followed up with further questions to try to get that break out so that we can really try to follow the money and assess what is happening out there and determine whether or not the VERA model is a good model. It could be a good model, but we are hearing concerns back in our respective States about how resources are being distributed and whether it might hamper the ability some areas to put forward a new CBOC or access point, because that comes out of the operating money, and if you have the Central—VISN office—trying to control their budget then they might not be willing to move forward as aggressively as if they had money allocated for the creation of a new CBOC.
So these are some of the issues that we definitely would want to work with you on, Dr. Petzel. And hopefully, can try to take care of some of the concerns that we are hearing out there as well.
If there are no further questions I want to thank you, Dr. Petzel, and the panel for coming forward today, and I look forward to working with you. We will have some follow up questions in writing as well. So thank you.
Dr. PETZEL. Thank you, Mr. Chairman, and thank you to the Subcommittee.
Mr. MICHAUD. I would like to now invite panel two to come forward. We have Mr. Blake Ortner from the Paralyzed Veterans of America, Mr. Eric Hilleman from the Veterans of Foreign Wars, and Mr. Joe Wilson from the American Legion.
I want to thank all three of you for coming forward today. I look forward to your testimony, and I also look forward to working with you as we move forward in dealing with issues important to veterans that serve this great Nation of ours.
So without any further ado we will start out with Mr. Ortner.
STATEMENTS OF BLAKE C. ORTNER, SENIOR ASSOCIATE LEGISLATIVE DIRECTOR, PARALYZED VETERANS OF AMERICA, ON BEHALF OF THE INDEPENDENT BUDGET; ERIC A. HILLEMAN, DIRECTOR, NATIONAL LEGISLATIVE SERVICE, VETERANS OF FOREIGN WARS OF THE UNITED STATES, ON BEHALF OF THE INDEPENDENT BUDGET; AND JOSEPH L. WILSON, DEPUTY DIRECTOR, VETERANS AFFAIRS AND REHABILITATION COMMISSION, AMERICAN LEGION
Mr. ORTNER. Thank you, Mr. Chairman, Members of the Subcommittee. Paralyzed Veterans of America is pleased to present our views on the Veterans Health Administration's fiscal year 2011 Budget in particular as it relates to construction.
PVA previously testified on the 2011 budget and it is addressed in my written testimony, so I would like to focus my oral comments on two key issues that PVA is concerned with regarding VA construction. That is VA research infrastructure funding shortfalls
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