FISCAL YEAR 1996 DEPARTMENT OF VETERANS AFFAIRS BUDGET

FRIDAY, FEBRUARY 24, 1995

House of Representatives,

Committee on Veterans' Affairs,

Washington, DC.

The committee met, pursuant to call, at 9 a.m., in room 334, Cannon House Office Building, Hon. Bob Stump (chairman of the committee) presiding.

Present: Representatives Stump, Bilirakis, Spence, Hutchinson, Everett, Buyer, Quinn, Bachus, Stearns, Ney, Fox, Flanagan, Barr, Weller, Hayworth, Cooley, Schaefer, Montgomery, Evans, Kennedy, Edwards, Waters, Clement, Filner, Tejeda, Gutierrez, Baesler, Bishop, Clyburn, Brown of Florida and Doyle.

OPENING STATEMENT OF CHAIRMAN STUMP

OPENING STATEMENT OF HON. G.V. (SONNY) MONTGOMERY

STATEMENTS OF HON. JESSE BROWN, SECRETARY, U.S. DEPARTMENT OF VETERANS AFFAIRS

OPENING STATEMENT OF HON. DAN SCHAEFER

OPENING STATEMENT OF HON. MICHAEL BILIRAKIS

OPENING STATEMENT OF HON. TIM HUTCHINSON

OPENING STATEMENT OF HON. MIKE DOYLE

OPENING STATEMENT OF HON. LUIS V. GUTIERREZ

OPENING STATEMENT OF HON. JACK QUINN

OPENING STATEMENT OF HON. WES COOLEY

OPENING STATEMENT OF HON. MIKE FLANAGAN

OPENING STATEMENT OF HON. CORRINE BROWN

OPENING STATEMENT OF HON. MAXINE WATERS

OPENING STATEMENT OF HON. CLIFF STEARNS

STATEMENT OF JAMES N. MAGILL, LEGISLATIVE DIRECTOR, VETERANS OF FOREIGN WARS

STATEMENT OF RUSSELL W. MANK, LEGISLATIVE DIRECTOR, PARALYZED VETERANS OF AMERICA

STATEMENT OF RICHARD F. SCHULTZ, LEGISLATIVE DIRECTOR, DISABLED AMERICAN VETERANS

STATEMENT OF NOEL C. WOOSLEY, NATIONAL SERVICE DIRECTOR, AMVETS

STATEMENT OF LARRY D. RHEA, DEPUTY DIRECTOR OF LEGISLATIVE AFFAIRS, NON COMMISSIONED OFFICERS ASSOCIATION

STATEMENT OF CARROLL L. WILLIAMS, DIRECTOR, VETERANS AFFAIRS AND REHABILITATION, THE AMERICAN LEGION

OPENING STATEMENT OF CHAIRMAN STUMP

The Chairman. The committee will please come to order.

Today we are meeting to hear testimony on the budget for fiscal year 1996. As you know, this meeting had been scheduled for last Wednesday, but because there are eight Members on this committee, the meeting overlapped with the Armed Services Committee, so we changed it to today; and I appreciate everybody's indulgence.

I especially want to thank the Secretary and the rest of our witnesses for being able to change their schedule on such short notice. Unfortunately, there are two witnesses that couldn't do that and will not be with us, the Honorable Frank Nebeker and the Honorable Preston Taylor, Assistant Secretary for Veterans Employment and Training, could not be here. So without objection, I would like to include their presentations in the record.

[The statement of Mr. Nebeker appears on p. 93.]

[The statement of Mr. Taylor appears on p. 97.]

The Chairman. We will have three panels before us today. First, Secretary Brown. Next, the Independent Budget Panel with representatives from the Veterans of Foreign Wars, the Paralyzed Veterans of America, the Disabled American Veterans, and AMVETS; and third, we will hear from the American Legion and Non Commissioned Officers Association.

I was going to introduce Dan Schaefer, but I don't see him out here. Later, we have a new Member to introduce.

Since we do have so many new Members here, I would like to say a few comments about our Secretary, if I could, please. Jesse Brown is a Marine, a combat veteran of Vietnam, wounded in Vietnam, and he has been a tireless advocate for veterans' problems his entire professional career.

He joined the staff of the Disabled Veterans Association in 1967, working his way up to Executive Director through 1989; and then, of course, he was sworn in as Secretary in January of 1993.

Mr. Secretary, I understand that you personally appealed to the President for a better budget than came out of OMB, and we want you to know that we are very grateful for that. I commend you for your efforts and observe that the overall increase of nearly $1.3 billion is certainly an improvement over last year's budget request; and once again, we thank you for that.

Before we turn to you, Mr. Secretary, I would like to turn to my good friend, Ranking Member Sonny Montgomery.

[The prepared statement of Chairman Stump appears on p. 65.]

OPENING STATEMENT OF HON. G.V. (SONNY) MONTGOMERY

Mr. Montgomery. Thank you, Mr. Chairman. I join you in welcoming Secretary Brown and the other people at the witness table. I want to commend you. I was one of two Members of Congress at the ceremony of Iwo Jima last Sunday, and you certainly made some very fine comments, and I want to commend you for that.

I want to say that we all agree with a common belief that benefits for veterans are among the most important functions of government. What else can you give your country when you march off to war and you really don't know whether you will come back?

When the administration looked to cut the number of VA personnel providing direct health care for our new members, we successfully turned this policy around, so that we didn't lose that many FTEs out of our hospitals, that couldn't have functioned if this Reinventing Government had been pushed onto our veterans' programs. We have also worked together to fight for adequate budgets, and I believe this budget is fair.

Mr. Secretary, I hope you will cover it today. Coming out of the Appropriations Committee of the House last night--some rescissions were made that show $50 million coming out of medical equipment and $156 million out of VA construction; and I hope you are prepared to maybe make some comments on these rescission cuts. We would like to hear from you about that.

I want to express my strong opposition to the administration's proposal which would deny half of the future cost-of-living adjustments, COLAs, to persons going to school under the GI bill. I feel very strongly about this. There is a good possibility that the Pell grants, where you don't have any obligations to your country; the Perkins loans, that they don't even pay back; and then the National Service Program will receive increased funding. Yet the young men and women who march off to military service and serve for 3 years, may receive a reduced budget. This also affects the National Guard and Reserve GI Bill. This is one of the best recruiting tools we have for the military, the GI bill, and it hasn't cost the taxpayers a nickel up until this year. It cost $1,200 to the seviceman and woman; who enrolled in the program and that has paid for this program.

I think this is a fair budget. I am hopeful that we can do a little increase in medical care, and help out on research and also the national cemeteries. But I do hope you would touch on the rescissions that have come through from the Appropriations Committee. We are concerned about that.

And thank you, Mr. Chairman.

[The prepared statement of Congressman Montgomery appears on p. 70.]

The Chairman. Thank you, Sonny.

Mr. Secretary, we are going to change procedures just a little bit. Rather than going to individual Members now, we are going to go to you and let you proceed in any way you see fit; and then we will go to the Members for opening statements and/or questions under the 5-minute rule in the order that they were in the room when the gavel came down.

[The prepared statement of Congressman Weller appears on p. 75.]

[The prepared statement of Congressman Filner appears on p. 76.]

The Chairman. Mr. Secretary, we ask you to proceed as you see fit and we welcome you this morning.

STATEMENTS OF HON. JESSE BROWN, SECRETARY, U.S. DEPARTMENT OF VETERANS AFFAIRS, ACCOMPANIED BY HERSHEL GOBER, DEPUTY SECRETARY; KENNETH W. KIZER, M.D., UNDER SECRETARY FOR HEALTH; R.J. VOGEL, UNDER SECRETARY FOR BENEFITS; JERRY W. BOWEN, NATIONAL CEMETERY SYSTEM DIRECTOR; D. MARK CATLETT, ASSISTANT SECRETARY FOR MANAGEMENT; AND MARY LOU KEENER, GENERAL COUNSEL

Secretary Brown. Thank you so very much, Mr. Chairman. I really do appreciate those kind remarks that you made about me and my life's work.

The Chairman. Mr. Secretary, would you pull the microphone a little closer, please?

Thank you.

Secretary Brown. Again, thank you very much, Mr. Chairman. I do certainly appreciate those very kind introductory remarks. Before I present my oral testimony, I would like to respond to Mr. Montgomery's question with respect to the rescissions that were reported in The Washington Post this morning and also in the Congressional Record, where there is a proposal to rescind the Columbus, Missouri project; the Gainesville project; Hampton, VA; Orlando; Puerto Rico; West Haven, CT, for a total of $167 million. Quite frankly, I was very, very shocked to see that. And I was shocked because, in my view, it undermines our ability to be where we should be.

As you know, VA has to be as flexible as it can in order to take advantage of changes in treatment modalities. We can look at VA's pattern of providing care and we see consistently that the number of inpatients is going down each and every day, and at the same time, the number of outpatients is increasing; and that represents a tremendous savings.

That is what is happening all throughout America. And, unfortunately, if we do not have these projects, we are not going to be able to accommodate the people coming to us for care in an outpatient or ambulatory care setting.

I was just in Wilmington, DE at our hospital yesterday and there were hundreds of people in the hallways coming to take advantage of outpatient care. We are moving toward primary care, and as a result, it is putting a tremendous strain on our system. And therefore, I believe that to rescind these projects, quite frankly, is wrong. And I must say that this is the first time that I have seen an approach like this--in my view, it comes right at the veteran.

This is the first time that someone is actually proposing to take something away that is good for our veterans; and I hope we are able to reverse this proposal, because it is certainly not in our best interests.

Also, there is an effort to reduce by $50 million funding to reduce our equipment backlog. With respect to that, I am concerned. We have somewhere around $800 million in equipment backlog and we took $50 million out of the $111 million that the Congress was kind enough to provide to us in the 1995 budget and allocated that to reduce this equipment backlog. We are doing the same thing in our 1996 budget. I hope we do not see a trend about to develop with respect to reducing veterans' programs.

Mr. Chairman, I certainly do appreciate this opportunity to present to this committee the President's 1996 budget request for the Department of Veterans Affairs.

I am excited about VA's budget of $39.5 billion, which is an increase, as you have mentioned, of $1.3 billion over fiscal year 1995. In a nutshell, it is a good budget. Again this year, VA fought hard for the resources we need to provide adequate services for our veterans. As you again pointed out, I met with the President twice about the VA's budget and the result was a substantial increase.

VA continues to provide three basic services to this Nation's nearly 27 million veterans. These services are very simple, but they are very important. They are: providing quality health care, delivering timely benefits, and burying our veterans with dignity.

The VA's budget contains $17 billion for medical care, an increase of $747 million over the current year. This $17 billion will support 201,254 employees and provide care to 2.9 million patients. With this funding, we will provide more than 1 million episodes of inpatient care and 26.3 million outpatient visits. That, again, is an illustration of why we need to expand our ambulatory centers throughout the country if we are going to take care of our World War II, World War I, Korean War, Vietnam veterans, and all of our veterans who have served and are eligible for care from VA.

We will furnish care to 43,000 more veterans in 1996 than we will in 1995. We will open three nursing homes, a replacement medical center in Detroit, a spinal cord injury center and a 240-bed psychiatric facility.

The challenge is clear. We must continue our commitment to provide quality care to our veterans. That is why we are developing a new health care management structure.

Our new Under Secretary for Health, a great man, Dr. Ken Kizer, has been working hard on a system designed to meet the needs of veterans rather than the needs of individual facilities. It is based on networks that will function as planning, budgeting and operational units. Structuring management in this way will promote creativity, help us meet the expected workload, and generate savings through efficiency.

I will be submitting a reorganizational plan for your approval, Mr. Chairman, in the very near future.

Funding for research will increase from $252 million to $257 million in 1996. As one who understands the importance of research to the quality of care VA provides, I am extremely pleased with this proposed increase.

Major construction is increased by 45 percent to almost $514 million, and minor construction has increased by 50 percent to $229 million. The major construction funding fully meets our long-term commitments to build another new medical center in Brevard County, Florida, and a replacement facility in California at Travis Air Force Base. The minor construction increase focuses on badly needed improvements in inpatient environment.

Since becoming Secretary for Veterans Affairs, Mr. Chairman, I have traveled to more than 37 States, and I must tell you, sir, that I am very upset by having observed, firsthand, the unacceptable living conditions I have found in a number of our facilities. I am talking about things like the lack of private bathrooms for our women, and veteran patients receiving their care in 16-bed wards instead of private and semiprivate rooms, and the lack of bedside telephones for our patients. We need to bring our facilities up to community standards.

The 1996 construction budget will fully fund--fully fund, sir, five projects that address these deficiencies and will allow us to bring, as I have said, our facilities up to community standards.

The compensation and pensions account reflects an appropriation request of $17.6 billion. This includes $170.9 million of the projected costs of the U.S. Supreme Court decision of Gardner v. Brown. That decision, as you know, sir, invalidated one aspect of VA's interpretation of the law authorizing compensation for veterans disabled by medical treatment.

In the area of claims processing for benefits, I am happy to report that we have made great progress in reducing our processing time. With this budget, we will reduce processing time for original compensation claims from 212 days in 1994 to 140 days in 1996. That is a reduction of more than a third; and I also, sir, want you to know that we are working toward a goal of 106 days by 1998.

The Board of Veterans' Appeals is working hard. They are working hard and will continue to address the unacceptable amount of time it takes to process an appeal. In fiscal year 1996, we are requesting 28 additional positions which would increase the Board's staff to 477. We expect a reduction in average response time from 745 days to 687 days. Now, I recognize that this is still unacceptable, but the point here is that we are moving in the right direction; and I think we must continue to have the resources that will allow us to continue to manage this problem, as opposed to having the problem manage us at the Board of Veterans' Appeals.

As you will note, the Administration has also proposed legislation to extend through fiscal year 2000 the VA's provisions enacted in OBRA 1993. This will result in savings of nearly $3 billion.

In summary, Mr. Chairman, the challenges before us are great. Our goals remain the same, however: the best service we can give to our veterans. I look forward to working with you, as I have in the past, and the members of this committee to honor the commitment we have made to our Nation's veterans.

Mr. Chairman, this concludes my statement and I now will respond to any questions that you or members of the committee may have.

[The prepared statement of Secretary Brown appears on p. 110.]

The Chairman. Thank you, Mr. Secretary, for that presentation.

Before we go on, I would like to take this opportunity to introduce our newest member of the committee, Dan Schaefer from Colorado. Dan has been a hard worker on behalf of the veterans in this country, and we welcome him to this committee. We know that he will be an asset.

OPENING STATEMENT OF HON. DAN SCHAEFER

Mr. Schaefer. Well, I thank you, Mr. Chairman, and certainly the Ranking Member, Mr. Montgomery. As both individuals know, I have been trying to get on this committee for a long period of time.

On behalf of the 400,000-plus veterans in the State of Colorado, I was glad to hear the Secretary's statement this morning pertaining to health care, particularly when we are looking at that possibility of closing Fitzsimons Army Medical Center in Denver which serves 12 States. As the Secretary also knows, we have been working very hard on the parking facilities at our veterans' hospital in downtown Denver which are atrocious. We hope that we can solve some of these problems, and I do appreciate the Chair. Also, thank you for your efforts and Mr. Montgomery's efforts in getting me on this committee.

The Chairman. Thank you. And welcome again to the committee.

In order that we can proceed as rapidly as possible this morning, we are going to adhere strictly to the 5-minute rule, both for your questions and your answers. If you would try to abide by that, we will move along. The Secretary is under certain time constraints. As you know, we have gone in an hour earlier this morning in anticipation, and hopefully we can finish this hearing before noon with our three panels.

Before turning to my Ranking Member, Mr. Secretary, let me ask you a question. Would you agree with estimates indicating that as much as 40 percent of VA hospital admissions, may be inappropriate?

Secretary Brown. I can't respond to that. I am going to ask Dr. Kizer to respond to that one.

Dr. Kizer. Sir, in the review that I have been able to complete so far, in my short tenure in the position, that figure may apply at some facilities. I know that at other facilities that would be markedly less. And, of course many of these inappropriate admissions relate to the unusual requirements of eligibility rules that favor inpatient care over often more medically appropriate and more efficient delivery of the same service in an outpatient setting. But that option is not available for many VA patients, depending on the individual veteran's eligibility status.

The Chairman. Thank you.

Well, the Secretary mentioned in his opening remarks that the inpatient percentage is down, outpatient is up; and of course, that is what we are going to try to strive for up here. But would you, Mr. Secretary--one more quick question--explain how eligibility reform could help this situation?

Secretary Brown. Yes, sir. I think Dr. Kizer gave an example. Let me give a couple of examples to illustrate that the way we conduct business and our lack of flexibility really doesn't make sense in a modern society.

Let us say, for instance, an individual who is eligible for care from VA breaks his foot and he comes to the VA and we put a cast on that foot in an outpatient clinic. In order for us to legally give that individual crutches, we have to admit him to the hospital. That doesn't make any sense at all. So that is an indication of why we need eligibility reform--so that we can take advantage of modern efficient ways of delivering health care.

One other example. Let us take, for instance, a veteran who lost his leg below the knee in World War II, or Vietnam--it doesn't matter--Korea. He breaks his prosthetic device. He can come to VA and say, I need a new prosthesis. While he is there, the doctors say, let's take a look at you, and they give him a blood pressure test to check for hypertension. They find, let's say, his blood pressure is somewhere around 150 over 100. It is high, but not high enough for him to be hospitalized. They can only say to that man, find yourself a physician to look out for you and to manage your blood pressure.

And let's say for the purpose of this discussion that he walks out of the VA building and has a stroke right there. Then we can bring him into the hospital and give him everything he needs. It would have been much cheaper to have said, look, you have hypertension and we need to manage it, minimizing the potential of you ending up having a stroke.

The same thing with diabetes and so forth, particularly to our patients, who tend to be much older than the average patient in our society.

So those are examples of why we desperately need to have eligibility reform and we desperately need to move away as rapidly as we possibly can from inpatient care to outpatient care. That is where the savings are, and that is really what is good medicine in this country and, in fact, I think good medicine throughout the world.

The Chairman. Thank you, sir. As you know, that is going to be probably the number one priority of this committee, to try to move towards outpatient care, because we can save many, many dollars by doing that.

I apologize to you, sir, for not allowing you to introduce your assistants with you. If you would, before we go on to Mr. Montgomery.

Secretary Brown. Yes, sir. Mr. Chairman, I have Mr. Vogel, our Benefits Director; Mark Catlett, our resources and money man; we have Mr. Gober, he is our chief executive officer; and Ken Kizer, the newest member of our team. And I am so proud of this man; he is Under Secretary for Health. He has brought us so much wonderful experience and background, and a whole, new, refreshing approach to VA. I feel very proud to have him on our staff.

And we have Jerry Bowen, who is the Director of our Cemetery Service, Mr. Chairman.

The Chairman. Welcome, gentlemen. Mr. Montgomery.

Mr. Montgomery. Thank you.

Thank you, Dr. Kizer. I have got a problem for you in just a few minutes here. I have two questions and then brief answers to stay within my 5 minutes.

Mr. Secretary, you, like I and others on this committee, are concerned about the rescissions that the Appropriations Committee has brought forward. We will probably need your help on this side, maybe on that side, too, because it will affect some of our Members; there have been recommendations of not going ahead with construction. So I assume you will help us and give us the information that we need.

Secretary Brown. Yes, sir. You have my 100--no, my 1,000 percent support on this. This is so important to our veterans. It is important to do what is right for these guys.

We have spent the last 50 years talking about how well they performed for us during World War II, when we lost 400,000 of them on the fields of battle, and 700,000 came back home wounded and disabled. We need to show our respect to them and we need to show that we appreciate the contributions and sacrifices they have made to the Nation. And we can do this by providing them good, comprehensive, quality care.

Mr. Montgomery. Thank you.

My second question really follows up on regulations you have that you have to put an individual from outpatient into the hospital if the individual needs crutches. Now, my own VA hospital in Mississippi gave a penile implant to a child molester who had just gotten out of jail for child molesting, a 4-year sentence. Maybe the veteran was eligible. But the people are quite upset about that, that this procedure has been done. And it leaves the hospital in Mississippi setting up a committee to look at procedures like this. And I certainly hope it won't happen again in our other 170 hospitals where a child molester would get this penile implant, and you don't know what might happen after that.

So I hope you will take care of it and notify the other 170 hospitals, let's don't let this happen again. I know you are going to tell me, under the law this individual is eligible. I don't think he ever heard a shot fired in combat, but because of a diabetic condition he becomes eligible.

But we just can't let this go on, and I hope we don't have to move the legislation, but this shouldn't happen again.

Secretary Brown. Mr. Montgomery, let me just make a couple of observations about that. There are three things that really bother me in our society today. When I was a young boy coming up, the three groups of people that were always safe on our streets--and I came up on the streets of Chicago--were the elderly, our children, and those disabled. It appears now that we are living in a time when they are the most vulnerable. We as a society have an obligation to protect them.

And having said that, I would also say with respect to this particular individual that I am sure he is very happy that I am not a doctor and that it was not my right hand that performed the surgery. But we have to place this in its proper context, and that is, as you so rightly pointed out, he is entitled to this care by virtue of his service-connected disability. As such, we have a responsibility to separate his crime and his conduct, unacceptable conduct, from what he is entitled to from the VA. But I would be very, very cooperative in talking with you and members of this committee to try to find a solution that would be satisfactory.

The Chairman. Let me say to the Members that if you don't have enough time to get all of your questions in the 5 minutes, we will try a second go-round if time allows, or you are welcome to submit them for the record. Mr. Bilirakis.

OPENING STATEMENT OF HON. MICHAEL BILIRAKIS

Mr. Bilirakis. Thank you, Mr. Chairman. These are the rescission areas involving Florida's projects, although it includes a few others too.

Well, in the interest of time, sir, I have an opening statement that I would like to ask unanimous consent be inserted in the record and join you, of course, in welcoming the Secretary and his staff.

The Chairman. Without objection.

Mr. Bilirakis. I would like to apologize in advance. I have to testify before the Rules Committee on risk assessment and will be leaving when I have to, but certainly not before then.

Mr. Secretary, I was advised just about the time that you started to testify that part of the rescission is going to be the spinal cord injury working drawings, the construction drawings for the spinal cord injury center in Tampa, FL. We have been trying to get that on course for many, many years, as you know. You and I have talked about it before--and this, of course, is not your doing, but the center isn't part of your next year's budget. But that is okay, because we are really not at the point where we need that money anyhow. But that $4 million, as little as it is, is very, very important to us. I am hoping you will be able to help us there.

Mr. Chairman, last year I was part of, as you know, the bipartisan coalition to work up a health care plan. I was just amazed, and maybe I shouldn't have been, but I was amazed at the attitude of some of the Members of my coalition committee when it came to talk about veterans' health care. Why should they be treated any differently and that sort of thing; that is what the hell we are going through.

And I know when we had the national commander here last week to testify, only a few days ago he talked about the special category that veterans are in. And unfortunately, we have too many Members of this Congress who continue to pay no attention to that.

Nobody in our society--I mean, you rate social security, and I will defend it to the death, obviously; and you rate medicare because we put into it because you reach a certain age. You haven't really done anything to deserve it; you reach a certain age, you get it, because we set it up as a contract a long time ago and we should continue with that.

But when it comes to veterans, by God they rate it by what they have done, the hardships and that sort of thing. But we forget that the cost of war continue after the end of that war.

I would ask you, sir, getting back to the eligibility reform--in some of these instances that I still call him ``Chairman,'' I know Bob doesn't mind if I continue to call Mr. Montgomery ``Chairman.'' The need for eligibility reform, how much of that is the fault of legislation? I mean, is it just that we have set up eligibility in such a tight manner that in spite of the fact it catches situations such as these you mentioned, and Mr. Montgomery mentioned, there is no flexibility, there isn't enough flexibility to do what common sense dictates?

Secretary Brown. You actually stated it correctly. It is a direct result of legislation, a patched approach in legislation that has taken place over the last 30 or 40 years. And as a result, we are now seeing it becoming very restrictive in allowing us to be able to take advantage of the advancements that have been made in medical technology and the new techniques that are used in delivering health care in the Nation.

The Chairman. Well, now, I may be wrong, but I note--with all due respect I say this--the budget does not contain a strategic plan, if you will, if you could call it that, that would present the VA's suggestions and recommendations regarding eligibility reform. Isn't that true?

Secretary Brown. Yes, sir. We are now in the process of working on eligibility reform. We are working very hard to try to pull together all the information. As you know, we thought we had a good package last year in the national health care reform, and the veterans' portion of that was outstanding. But since that fell through the cracks, we had to go back to the drawing board. Now we are in the process of pulling together all the information we need, so we can come together with all of the interested parties and try to figure out which is the best way to proceed in the future.

Mr. Bilirakis. Well, you know, these terms are only 2-year terms, unfortunately--although some people would think, fortunately--and we don't know what your term is. God willing, you will be there at least another couple of years. I won't say that I would like to see you there more than a couple of years, as good as you are.

But the point is, time is always a factor here. So I am hoping, sir, that you all would come up with your recommendations as quickly as you can, so that we can maybe organize a task force or, as our Chairman pleases, really concentrate on that area, because an awful lot of wrong is taking place out there that we should right.

Secretary Brown. Thank you. And I do also want to say for the record, I really appreciate the support you have given us over the years.

Mr. Bilirakis. Thank you, Mr. Secretary.

Thank you, Mr. Chairman.

The Chairman. Thank you.

[The prepared statement of Congressman Bilirakis appears on p. 81.]

The Chairman. Mr. Edwards.

Mr. Edwards. Thank you.

Mr. Secretary, thank you for being here--all of you being here--and for your service to our Nation's veterans. Mr. Secretary, I was not privy to the process that the Appropriations Subcommittee went through in listing these rescissions. Could I ask you, have these particular projects been put on some sort of prioritized list? For example, is it possible for this committee to get a list of how these various projects, both those that were rescinded and those that were not, where they ranked on a list to see if there was some logic to which ones they picked out?

Secretary Brown. Yes, sir. And keep in mind that these projects were the ones that we had in the 1995 budget. We felt so strongly about them that we originally tried to get them in the 1995 budget with their own appropriation line. However, since we were not able to do that, we put them in the investment package, that $3 billion, and we were going to pay for them out of that because that is how strongly we felt about it.

We can see exactly what is happening. The demands being placed on our outpatient facilities are just staggering. As a result, we are going to have to move forward.

But to answer your question, yes, they have been prioritized and we can provide you with information to show that they score very high in terms of projects that we need to move forward on.

Mr. Edwards. Okay. Thank you. Thank you very much.

Dr. Kizer, I would like just to welcome you here. I believe this is your first hearing as Under Secretary before this committee, and I welcome you and look forward to working with you, as I know all other members of this committee do.

Could I just ask you your understanding of the fiscal year 1996 budget? Does it allow the funds you would like to have to really accelerate this reprioritizing of resources toward outpatient care? Or maybe, perhaps put a different way, if you had additional monies, what could you put those resources into to help us expedite that process, which I think will allow us to provide more care to more veterans at a lesser cost to the taxpayers?

Dr. Kizer. Thank you, sir, for your kind comments, and I also am appreciative to be here this morning.

With regard to your question, as has already been stated this morning, we think this is a very good budget, and the restructuring or the reorganization proposal that I am working on will complement the budget. The budget does give us a lot of room to do what needs to be done. But, as has already been commented upon this morning, we do have substantive needs that far exceed what is in the budget--that is, capital needs for patient environment improvements, for more ambulatory care facilities, and to address a large equipment backlog. So while this is a very good budget and a realistic budget, given all of the fiscal exigencies that are present today, it by no means addresses all of the needs that exist within the system.

Mr. Edwards. I appreciate that. The reason I asked that question, we may be a small number, but I think there are a number of us in the House that think it perhaps is inappropriate to have $700 billion in tax breaks at a time when we have a $200 billion deficit. My proposed idea, such as not having those kinds of tax breaks and applying most of that savings to deficit reduction, but perhaps saving some of that money for application to needed veterans' health care programs.

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

The Chairman. Chairman of the Subcommittee on Hospitals, Mr. Hutchinson.

OPENING STATEMENT OF HON. TIM HUTCHINSON

Mr. Hutchinson. Thank you, Mr. Chairman. And let me thank the Secretary for being here today. I have kind of a cold, so forgive my voice.

A special welcome to Dr. Kizer and always Hershel Gober, my fellow Arkansan. We are glad to see you again and have you here. In Arkansas we end up on different sides of the political fence a lot of the time. We certainly are united in our support for veterans and in our opposition to Bob Dole's suggestion that we ought to sell Arkansas to balance the budget. There has got to be a better way.

While we are all concerned about the rescission list, one of those concerns I think ought to focus on the fact that they had targeted ambulatory care additions in those rescissions; and so, Mr. Secretary, the VA has stated on numerous occasions that a shift to the delivery of health care services in the ambulatory care setting is a VA priority.

Your fiscal year 1996 major construction submission appears, at least to me, to be a little inconsistent with that goal in that two-thirds of the requested dollars are directed toward two facilities. So how will the construction of those two projects contribute to the VA's stated goal of achieving more ambulatory care facilities? And describe for me the construction prioritization process that resulted in the selection of those two hospital construction projects, please.

Secretary Brown. Thank you. I am so glad that you asked that question.

First of all, let me simply say that we do not believe they are inconsistent. Let me give you a backdrop on that. There is no relationship whatsoever between our efforts to continue to expand the care we provide on an outpatient basis and the two construction projects you are talking about.

I am assuming you are talking about Brevard County in Florida and the Travis Air Force Base project.

The Brevard County project has been on the books for about 10 years, and it scores 9.80 our priority score, which I can explain a little later. But it is based on our efforts to expand care in that area. Florida has one of the lowest bed rates per thousand veterans in the entire Nation. It has 1.72 whereas the Nation's average is 2.49. The supply of VA services should be comparable to the national average, and we must also take into consideration that there is a growing, ever-growing population of veterans moving to Florida who are retired and living on limited, fixed incomes, which would automatically make most of them eligible for care at our VA facility.

Another point, too--it is my understanding that the Air Force has now backed out, but we were moving to try to have a joint venture there with the Air Force. This particular project was based upon the conclusion that there were more and more veterans moving to Florida, and they did not have access to a primary care facility there in the central part of the State. So that is one of the reasons we put that project there. It has a catchment area that would serve about 258,000 veterans. We plan to complete the design in February of 1996, and we would like to complete construction in December of 1999.

With respect to the project which is a joint venture there in Travis Air Force Base--that is a replacement hospital for the hospital that would have been unsafe in an earthquake in northern California. I think that makes it very, very clear. One other point there--this catchment area is larger than 26 States. So our veterans who live in that area--an area larger than 26 States--do not have access to a VA hospital. In both instances, the project is based on need. So that is the reason we are moving forward with those two projects.

Mr. Hutchinson. Mr. Secretary, the GAO, according to figures that I have, estimates that there are 2,000 empty private hospital beds in the Brevard area. Was that reality taken into consideration as you considered the need in Florida?

Secretary Brown. Well, there was a shortage of long-term care, psychiatric and NHC beds in Florida, and that is the reason we wanted to proceed. I am going to ask Mark to give us some additional information on that.

Mr. Catlett. Those figures you cite have been recognized in the study, and as the Secretary mentioned, the emphasis is for a primary care facility. This is a case where we are putting a large number of psychiatric beds and nursing home beds in this facility; this is not tertiary care for this facility. It will be the hub for the outpatient care that we intend to provide in that area. And even with the emphasis on primary care, there needs to be a referral point when there is inpatient care needed, and that is the basis for our decision to continue with this project.

Mr. Hutchinson. All right.

Before my time runs out, I think there will be probably be an ongoing debate about some of those priorities. My understanding also is, though, that the length of stay at VA facilities is continuing to increase, and it is approximately twice the national average. I am thoroughly committed to the VA health care system, but we get all of these articles that are written and the editorials that are written now, calling for privatization and vouchers, and I think this is one of the things that fuels that.

Why is the length of stay continuing to increase, and why aren't we closer to the national average?

Secretary Brown. Well, I am going to ask Dr. Kizer to respond to that; but before I do, let me just simply say, first of all, I think we have to take into consideration that most of our veterans are sicker than the average patient here in America. So when they come to us, they are already sicker, they are older, they have more problems. And so it just required us longer to deal with those particular problems.

I am going to ask Dr. Kizer to give you some additional information on that.

Dr. Kizer. Actually, sir, I would like to see the source of those figures. Information that I have been given during my time at the Department is that while the average length of stay in VA hospitals is longer than the national average, it is decreasing; and so I would like to see the source of those figures.

I would also add that so many of the patients that are treated in the VA facilities have additional social or other problems that complicate their stay. They are homeless, or they have other problems that make it harder to find placement.

We do have shortages of extended-care beds. We have less availability of home care. We lack a number of other options. I am hoping, in part through my efforts to restructure the organization, to provide a wider menu of available options than just a traditional inpatient stay. And again, this is also complicated by the eligibility rules that, in effect, preclude some of the options that are available to private facilities. Our population could benefit from residential care and other options that are often more efficient than a typical inpatient hospital bed.

Mr. Hutchinson. Thank you.

The Chairman. The Chair recognizes Mr. Tejeda.

Mr. Tejeda. Thank you very much, Mr. Chairman.

Good morning, Mr. Secretary and welcome once again. I have a couple of questions.

You mention in your prepared testimony that the VA will be moving forward with its consolidation and integration proposals along with the VISN proposal. Will each medical center that generates savings from the integration be able to retain a portion of those savings to improve direct patient care?

Secretary Brown. I am going to ask Dr. Kizer to respond to that.

Dr. Kizer. Under the proposal that we hope to be advancing in the very near future, the answer to that would be yes in some cases; in other cases, we would be looking at how the costs in that area compare to costs elsewhere.

One of the things that has become obvious in my review of what it costs to take care of the, quote, unquote, ``average veteran patient'' in our facilities is that cost varies substantially from region to region--often not entirely on the basis of risk adjustment, severity of illness or other obvious things. And insofar as those differences in costs can't be accounted for, and we know we have shortfalls in others, then we might look at moving some of those funds elsewhere in the system, but still directed at patient care.

In other cases, I would see, as you say, that savings would be turned back to the VISN to enhance patient care in the geographic area and the patient population served by those facilities.

Mr. Tejeda. Thank you.

Mr. Secretary, will the $2.7 million increase in the National Cemetery System budget enable the cemetery system to keep up with the increased demand, while not sacrificing maintenance or equipment backlog?

Secretary Brown. The increase, the $2.7 million increase in the 1996 budget really is, sir, basically current services. It provides for some growth. We try to make sure we are as lean as we possibly can be, We have kind of broken this down in terms of expansion into two areas.

Number one, wherever possible, we try to expand open cemeteries. The second thing we do, if we can't do that, is look at possibly opening new cemeteries.

And we have about five of them now on the rolls. They are Seattle, Dallas, Chicago, Cleveland and Albany. Of those, we have already acquired the land for three of them, and those are in Seattle, Dallas and Albany.

I am going to ask Jerry if he has anything additional to add to that.

Mr. Bowen. Essentially the budget that we have for 1996 will be a current services budget. We will be able to do the same things that we did in 1995. However, as a result of our streamlining efforts, we are moving seven FTE from our Central Office elements to the field in 1995. We are also going to move some FTE from our area offices to the field in 1996.

The budget does permit us in 1996 to place into service an additional 292 acres at our existing cemeteries, and to develop an additional 100,000 gravesites. So this budget is adequate to meet our needs in 1996.

Mr. Tejeda. And it is adequate again to where you are not sacrificing maintenance or equipment backlog?

Mr. Bowen. Our equipment backlog will increase slightly in 1996. But if I may, let me tell you why we are doing that.

During my teneure here, slightly less than 2 years, I have visited 61 of our 114 national cemeteries. When I talk with our directors, I ask them, if you could have more FTE, if you could have newer and better equipment or if you could have the M&R (maintenance and repairs) projects, which of those would you choose? Invariably they will respond give us the people. We will make the equipment last longer and we will do some of the work ourselves concerning the maintenance and repair projects.

Mr. Tejeda. Mr. Secretary, what are your thoughts or what is your position on the use of leasing to provide quicker or more portable outpatient care?

Secretary Brown. I think that is the way to go. We are not necessarily in the business of always looking to build facilities for the VA. Where we can lease, that is what we are doing, and that is part of our plan. We can actually bring them on line much faster, much more efficiently. They are much more flexible for us in terms of expansion or shrinking services as needed based on actual experience. So that is the way to go, sir.

Mr. Tejeda. Just one last question. I heard Chairman Spence on the National Security Committee ask this same question the other day to some of the chiefs who were there.

If you had an additional $1 billion in your budget, how would you use it? Where would you put it?

Secretary Brown. I would, of course, take some of that money and I would put it directly into medical care. We set aside about $767 million there. I would put some there to expand, give us some increased flexibility. As Dr. Kizer mentioned, there are going to be more creative ideas coming out of this whole process under his reorganization plan.

With the rest of it, I think I would respond to the needs. I have been to 37 States, I have visited 144 cities, over 330 various activities, around the country over the last 2 years. One of the things that bothers me most is when I go to these hospitals that were built in the 1930s, and we have 16 men in one room, and all of them get up at the same time and they are trying to take care of their physical needs and they have to go to bathrooms all the way down the hall.

If there are women in the hospitals, we have to bring all the men out of the bathroom and put somebody there to guard it so that the lady can go in and take care of her needs.

I would bring our hospitals up to community standards. Each and every one of them will look very, very nice, when you walk in; it would be open, everything will be clean. That is not to say that our hospitals now are not clean, but they are just old.

And we would have TV in each room, we would have telephones in each room, we would have modern equipment that we now put in modern hospitals. But in many of our old hospitals we did not retrofit them. So those are the kinds of things I would do with the rest of that money. I would bring every one of these hospitals up, particularly many of our older nursing homes.

The thing that hurts me the most is, I went to one hospital yesterday in Delaware, and I visited a nursing home and we see these guys that are 70 and 80 and a couple of them 100 years old, some of them have been there 15 and 20 years. They are sharing the room with five or six other people. I don't think I would want to stay in a room with five or six other people for 15 years.

And then you have to go out to take a bath. I think our veterans deserve better than that. I really do.

You know, a lot of people are talking about, well, maybe if they were not hurt. You know what I think about? I think about the guy that served during World War II, who served for the duration of the war. He could have spent 4 years being shot at every day and didn't get hurt and then he came home and it so happened he didn't do very good in terms of making a living for himself, and now he is able to get into the hospital because he is poor. I think he deserves the best that this Nation can give him. He gave everything that he could give during a time of national crisis.

So that is what I would do, sir, with the rest of that money. I would make sure that these hospitals meet community standards.

Mr. Tejeda. Thank you, Mr. Secretary.

Thank you, Mr. Chairman.

The Chairman. Mr. Everett, the Chairman of our Subcommittee on Compensation and Pension.

Mr. Everett. Thank you, Mr. Chairman. Thank you also for having this hearing. And I want to thank Secretary Brown and his group for appearing here today.

Mr. Chairman, I have a statement that I would like to submit for the record.

The Chairman. Without objection.

Mr. Everett. Secretary Brown, you stated that the VBA had made significant strides in decreasing the processing time for adjudicating claims. What percentage of this decrease was attributable to staff overtime?

Secretary Brown. I asked that same question to Mr. Vogel, and he told me at the time that he was not actually able to break it down. But we did spend somewhere around $9 million in overtime.

But I am convinced that when you combine the overtime with our modernization approach, our reengineering, and a number of other improvements, to include moving more people into the decisionmaking, that it is going to allow us to continue this downward trend we are seeing. So I think it is permanent, and I think it is a combination of things, including the overtime we did, which I don't think we are going to have to do in 1996. So I am very pleased with that.

Mr. Vogel, would you like to add something else to that?

Mr. Vogel Mr. Everett, I think that the Secretary covered it well. There is a dynamic that happens. If we fixed the organization today, the operational mode, and infused a measure of overtime just for this one week, we could see the effect that would have right away. But, in fact, we are being--our people are being much more creative, they are much more responsive. We have more people in decisionmaking modes than we had in the past. So just to attribute our progress to one aspect is impossible to do.

The good news is that we have become much more efficient. We have many, many more people in direct service to veterans, but less people involved in the augmenting and clerical functions that support it.

We are very proud of our accomplishments. We reduced the backlog by 11 percent last year. I told the Secretary I will have it down 18 to 20 percent again this year. That is just the backlog, but we will make the improvements in timeliness as well.

Mr. Everett. Mr. Secretary, what was the basis for the General Services Administration's suspension of the delegation of procurement authority for the acquisition of VBA modernization, Stage 2, the computers?

Mr. Catlett. Mr. Everett, I would like to answer that question. That is a responsibility that I have, and we deal directly with GSA.

Overall, the delegation was restored within the week for Stage 2 modernization. That withdrawal was based on a misunderstanding between staff about the data that GSA was expecting. They are tracking this progress that Mr. Vogel is talking about, as they should in their oversight role, and that information was supplied; and whereas the delegation was withdrawn on a Monday, we had that restored by Friday.

It is just a matter of making sure that our staffs--certainly we don't want to have that happen again, and we are making sure the staff is in touch and making sure the information is provided.

Mr. Everett. In other words, strictly due to miscommunications?

Mr. Catlett. Yes, sir. They were expecting information on our progress sooner than we had provided it, and decided to withdraw the delegation to get our attention, I expect. I have encouraged them also to call us whenever there is a problem among staff in terms of getting the information they expect, because we have had a good working relationship over the last 6 months.

GSA has been very involved with this project, as OMB has, and the support they have given us--we appreciate it, and their roles, we respect; and we are just making sure that the staff, when there is a problem--and in this case, I considered it a minor one, because, as I said, I was able to get them the information they were looking for and by Friday we had it restored.

The progress on that project is continuing. The negotiations and the procurement process is under way as it should be.

Mr. Everett. What importance does VA give to Stage 2 and Stage 3?

Mr. Vogel. Mr. Everett, we believe that Stage 3 clearly will be the completion of the project. Stage 2 will give us an opportunity to image and to use imaging. If you have ever visited one of our benefits offices, we are involved in claims folders, we are in paper processes, we exchange paper between us and the VA medical centers, between ourselves and the Department of Defense and the respective military services departments.

We want to get involved in imaging overall as much as we have been involved in imaging in administrating GI bill benefits at the St. Louis regional processing office. The technology has become very important to us. What it really does is get us out of having to use so many of our personnel to carry paper from one decisionmaker to the next, while providing more personnel to ensure that some value is added on and the decision is made. These things are very important.

It is a signal to our employees, as well, because we had such a very good year in 1994, and they are certainly in tune with what we are doing. It would give our personnel in the field a great deal of confidence and hope that we are, in fact, continuing to modernize and are getting out of the 1940s and 1950s mode of operation.

Mr. Everett. What is the total dollar amount of this procurement allocation?

Mr. Catlett. I am sorry, sir. Could you repeat the question?

Mr. Everett. The total dollar amount of this procurement allocation? What is budgeted?

Mr. Catlett. Are you talking all three stages of modernization, sir?

Mr. Everett. Right.

Mr. Catlett. All three stages are around $100 million, sir. We have completed Stage 1 and that procurement has been made. Stage 2 we expect this spring; it is the smallest of the three. As Mr. Vogel indicated, Stage 3 will be awarded next summer, the summer of 1996. The total of those for the hardware and installation is around $100 million.

Mr. Everett. Thank you very much.

Mr. Chairman, I have additional questions I would like to submit for the record.

(See p. 360.)

The Chairman. Mr. Doyle, before we have to take a recess.

Mr. Doyle. Thank you, Mr. Chairman.

OPENING STATEMENT OF HON. MIKE DOYLE

Secretary Brown, it is a pleasure to have you here today. I am one of the new Members on the committee, and also was the--my age saw the Vietnam War end about 2 or 3 months before I was going to be drafted, and I was thankful for that.

My father served in World War II, with a 100 percent service-connected disability, and was taken from our family at far too young an age due to his injuries in World War II. So I have a healthy respect for what the veterans' hospital system has done for my family.

I represent a district in Pittsburgh where we have one of the highest veteran populations in the country, and I have three VA facilities servicing my district. I have recently had the opportunity to tour those facilities, in Oakland, Highland Drive, and just very recently, the new state-of-the-art facility we have in Aspinwall; and I can tell you, it does make a difference when you talk about having a facility that is updated and new. I was just there meeting with a lot of our veterans there, and it does a lot for their spirits and their morale and also for the people serving them there.

When I met with some of the directors, one of the things that came across as I spoke with directors at the VA hospital system is this need to decentralize the system and give them some more flexibility to do some things within their budgets. So I was very happy to see this Veterans' Integrated Services network that you are working on. I think it is a step in the right direction.

I have had directors tell me that sometimes because of this restriction they have on FTEs--and I am just learning this process--but apparently it doesn't distinguish the difference between a nurse and a doctor or someone that is doing janitorial services; and FTEs--you know, it is a swap--and that sometimes they found themselves going out of the system, outside contracting work at actually a higher expense than what they could have done it at within the system, but they didn't want to use an FTE slot because they were so restricted in how that process worked, and that actually they could be more efficient and do more with their budgets if they just had some flexibility.

So I think what you are doing here is a step in the right direction; it is what your directors in the field are looking for, so that they can be more efficient and do more for our veterans with their budgets. And I want to commend you and offer you my support as you move in that direction.

Secretary Brown. Thank you very much, sir.

The Chairman. Mr. Secretary, we will recess for a short 10 minutes and be right back. We apologize.

Secretary Brown. Thank you, Mr. Chairman.

[Recess.]

The Chairman. I might have been too premature, Mr. Secretary. We don't have anybody to ask questions yet.

Here comes someone.

The committee will please come to order. Let me say, I know, Dr. Kizer, that you have to leave in a little bit, but I want to welcome you aboard--I neglected to mention at the beginning, but I have heard nothing but very good remarks about you--and I want you to know that and the record to show that. We welcome you.

Dr. Kizer. Thank you very much, sir.

The Chairman. Mr. Buyer.

Mr. Buyer. Thank you, Mr. Chairman. And Jesse, thanks for coming over.

Secretary Brown. Sure, Steve.

Mr. Buyer. I have some specific questions, and I think Sonny was right when he brought up the questions in regards to the reduction of the COLAs. We can't satisfy my heart here this morning, but just to let you know where I come from, I am one that was not in support of the Americorps. I think of how it undermined volunteerism and the problem of how it would pay people to do something that millions of people do in our society anyway, and it bothers me that when the Administration bumps up Americorps really as a jobs program, it has a perverse effect in undermining what we seek to do in recruitment and education and training of veterans with the GI Bill. So I just want to let you know that.

And bumping up Pell grants. It is difficult for me to justify in my mind why, really, to go back to Indiana and go to the VFW and American Legion and talk with my veterans--veterans that are going to take a hit--we are going to bump up some other things. I think that President Clinton had a very good theme a couple of years ago when he opened up in his State of the Union address in regards to deficit reduction and he talked about shared sacrifice, and I am sure he has talked about that with you often at Cabinet meetings, and hopefully still does, because I think the theme is correct.

But it is very difficult. I found it difficult when I went back to talk to farmers, when I said, well, you are going to take a $3 billion cut in USDA, but they are bumping up food stamps by $7 billion. It is difficult to try to justify some of those things.

So help me here right now. Why did the administration propose the half-cut in COLAs, try to explain that to me. Believe me, I am one that thinks that, you know, there is no constitutional right to COLAs, okay? But help explain this one to me, please.

Secretary Brown. Well, as you know, these are merely extensions of the provisions that were already in law. Most of them would have expired in 1998. There were three of them that were scheduled to expire in 1996: the C&P rounddown, the DIC limitation of the COLA, and the one that you mentioned in the GI Bill.

Now, the thought here was that deficit reduction is very important, and since we wanted to see what we can do in order to be able to show we were doing our fair share, or doing--I don't want to call it ``fair share,'' because quite frankly, I tend to agree with you, if I had my way, veterans would not have to take any cuts. We should be given more.

But in this instance, these were already on the books, and it was felt that it would not pose a tremendous hardship on veterans to extend three of them.

Mr. Buyer. I guess in your answers to some prehearing questions, I will highlight--what bothers me is--and we are going to struggle with this on the Armed Services Committee; I serve on the Personnel Subcommittee, and as we struggle with force structure issues and recruitment and the Marine Corps, former Marines have some concerns right now in accessions and recruitment.

In your response here you said, in comparing the Montgomery GI Bill benefits of the 2-year to 3-year enlistees to those available to individuals who do not participate in the military, but choose the Americorps program. A 2-year enlistee who completes his term of service is eligible for $328.97 per month for 36 months, which works out to around $2,960.73 per academic year. Someone could serve in the Americorps and get $4,725. Add to that health care and child care, which a veteran is not going to receive.

So I want to let you know, Jesse, that this one doesn't sit right with me, and we are going address Americorps. You don't have to address Americorps; we are going to address that, because I am one of them that was very uncomfortable in extending benefits that far exceed the veterans', and especially those who have walked the walk. So I want you to know where I come from on that issue.

The other question that I have really deals with that $70 million in conversion money that got shifted over to the VA. The SMOCTA, the Service Member Occupational Conversion Training Act, placed over 13,200 veterans at an average obligation of 5,505 per veteran process.

Tell me, do you think this is a good program? Do you think it is going to extend, or do you think the Secretary, with the vets, can pretty much handle it?

Secretary Brown. I think it was an outstanding program, and I think we still have a little bit of that money left. We actually wrote to the Department of Defense to see if they would make those funds available to us, because we believe that it was very, very beneficial to our veterans.

I am going to ask Mr. Vogel to comment on that. But before I do, I just want to say one last point about these extenders. I want you to know that I am not totally committed to this. I mean, I am willing to sit down and talk about what else we can do. I just want to make sure that we don't end up hurting our veterans. I don't want to see any major cutbacks on basic programs, for instance, like we had with DIC. It was a major cutback when we actually made it impossible for a remarried widow to come back onto the rolls.

I don't want to see that. So I am willing to sit down and talk with you and members of the committee on trying to figure out a way that we can kind of work this out.

Mr. Buyer. Mr. Chairman, was this included in the armed services budget? You said you asked--did you write Secretary Perry and ask him? I don't recall.

Mr. Vogel. There was a question about whether or not the funds had to be obligated or made available beyond one fiscal year. We had to get a clarification on that congressional action, which in fact freed up some monies to be used essentially until they are exhausted. Otherwise, we would have shut the program off in October without having expended all of the money. Now we are going to carry it on through. That is what the Secretary is referring to.

We have had conversations about the availability, and this is really in the preliminary stages, of conversion monies that may in fact be available through labor sources for displaced civilian employees in defense industries to try to see whether or not some of that might be available for those who wore a uniform and were members of the actual military force during the downsizing and the conversion. But those discussions are rather preliminary. But I would be pleased to keep you informed of progress on that.

Mr. Buyer. All right. Thank you, Mr. Secretary.

Thank you, Mr. Chairman.

The Chairman. The gentleman from Illinois, Mr. Gutierrez.

Mr. Gutierrez. Thank you very much, Mr. Chairman.

OPENING STATEMENT OF HON. LUIS V. GUTIERREZ

Mr. Secretary, welcome once again here. Last year we had a--I went out to a hearing in San Juan, Puerto Rico which our department was advised about and then Chairman Montgomery of the Veterans' Committee wrote a letter and was well-advised about, and we got back a report about the outpatient care and about how in San Juan there was going to be some $30 some million that we put in the bill last year so that we could do, because of all of the overcrowding, there is really only one major center in San Juan for all of the veterans.

Just in case, for the edification of the Members, everybody in Puerto Rico is eligible for the draft and we are all American citizens, even the Island of Puerto Rico, while it is a colony, we are all American citizens there, and there is a high percentage of veterans living on that island. That is just in case, Mr. Chairman, because since the U.S. Immigration and Naturalization Service was telling different corporations that we were permanent residents of this country, I just thought we should make that absolutely clear to everybody.

So we went out in Puerto Rico, we had that hearing out there, and I would just like to ask you, I understand there was some flaw in the Appropriations Committee last year that really screwed up the money for the VA Hospital in San Juan. Can you tell me a little bit about that, and answer the question, if you might, does it make sense to you that the Congress should invoke in the name of deficit reduction to cancel these projects, one of which was canceled yesterday in the Subcommittee on Appropriations, projects like these that are improved--that are targeted to improve outpatient care, which is a less expensive form of treatment than inpatient care?

Secretary Brown. I would agree with you. No, it does not make sense.

With respect to the funding, as you know, we were prepared to move forward on that project, and it was actually in the 1995 budget. There was a mixup in terms of how the appropriation took place where they actually put all the money into one area.

In order to move forward, we were just going to notify the Congress and actually move--I think it was about $7 million, and then get authorization later to go ahead. So we were prepared to move forward on that project because it is one that we think is beneficial to our veterans.

But, as you have pointed out, at this point, if these rescissions are final or if they become final, then it makes it a moot point.

Mr. Gutierrez. Thank you, Mr. Secretary.

Mr. Secretary, in the last budget request of the National Cemetery System, we have--we talked about the much-needed cemetery in Illinois and specifically the Chicago area, and I know you came--your staff came out to a hearing that was conducted by the oversight subcommittee headed by Congressman Evans in Chicago, and we had a hearing there, and we know that it was listed as the number one priority for cemeteries in terms of the whole district, and I know that you came out and were very emphatic about it. And then we told all of the veterans in Chicago 2 years ago that it would be built by 19--it would be in operation by no later than 1999, 1998, 1999. That would be it.

It would be in operation, we were going to do it, the money was there, that we were ready to go with it. It is my understanding that there is no money in the budget to carry forward on that cemetery in Chicago, and I hope I am wrong, but could you explain to us if what we told the veterans in the City of Chicago who have no cemetery because all of them are full to the max and who is a number one priority, what is it that we are going to do to get them that national cemetery.

Secretary Brown. Okay. Everything you have said is true in the reverse. We do have money for that project, as I have mentioned in response to an earlier question. We have funds available and plan to move forward on five cemeteries, they are Seattle, Dallas, Chicago, Cleveland, and Albany.

Now, we actually have the land acquired for Seattle, Dallas, and Albany, but I don't see any problem whatsoever at this point with Chicago. I think that is going to move forward; you are absolutely right, it is needed.

We wasted too much time trying to get that land up there in north Chicago at Fort Sheridan, and we couldn't get that because of circumstances that developed. The economics just did not work out. The Army wanted $37 million and we only had about $6 million. So we identified that site, as you know, in Joliet, and it will allow us to develop and move forward and have gravesites that will last us until when?

Mr. Bowen. The 940 acres would provide space beyond the year 2075.

Mr. Gutierrez. When will it be completed, the cemetery? What is the schedule for completion?

Mr. Bowen. Right now, sir, our effort is to acquire the land. The completion date, is contingent upon when we can acquire the land and obtain construction funds. We do not need land acquisition dollars. We have the dollars.

Mr. Gutierrez. When is it scheduled for completion?

Mr. Bowen. We have no firm scheduled date for completion.

Mr. Gutierrez. Well, we gave a schedule for completion last year when we had hearings here, and if my memory serves me correctly, it was 1999 it would be completed and done and ready to go. So I would just urge everyone to try to keep on that schedule, and if there is no monetary problem that we do that, because I think it is very important.

Let me just a question to Chairman Stump. Mr. Chairman, wrapping up my time here, can we have hearings in this committee on the actions taken by the Appropriations Committee in terms of over $200 million that were taken away from the budget in rescissions and what kind of impact that specifically is going to have? Because I know we had the national veterans organizations come in here, we had them all, you know, the American Legion.

I think we should call them all back and say things have changed. There is $200 million less and we should conduct some hearings so that we can exert our authority. I know we are not the appropriators, the cardinals of the institution, but I think we have a big responsibility in terms of defending the interests of veterans, and I am just asking the chairman if we could have some hearings on that, because I think that is rather important.

The Chairman. I will assure the gentleman we can and we will in the 1996 construction budget; we have already had a request for a hearing regarding the cemetery in that area.

The gentleman from New York, Mr. Quinn.

Mr. Quinn. Thank you, Mr. Chairman. And welcome.

OPENING STATEMENT OF HON. JACK QUINN

Mr. Secretary and the team that you have brought with you today, I want to compliment you and the team on your efforts with this latest budget go-round and you know that you have a lot of support here. I think in the last year or two we know we have a lot of support from your end of things. So I appreciate your efforts. Thanks.

I have a question for which we might have to rely on, using your term, the money man, Mr. Catlett, in a minute here or two about the PT Phone Home Program. As you know, that project, not for my district, because the phones are already in, but I think for all of the other members in veterans hospitals around the country, you said earlier with the question Mr. Tejeda asked, what would you do with an extra billion dollars. I couldn't agree more with your response that we spend some of that money to bring hospitals up to current standards, with the phones at the bedsides of the veterans in the hospitals all across the country, and I saw that happen in Buffalo last year. We will talk about medicine and we will talk about doctors, but believe me, when a veteran can call his family members, children, wife, whatever, husband, that maybe is the best medicine we can provide for them while they are away and in the hospital.

This is a program, for those Members that don't know about it, that is a great effort--communication workers of America volunteer their time putting in the wires and making sure the hospital is fit. In the Buffalo situation last year, we were able to combine some work the hospital was already doing with computers when we ran some lines. It just seems to me it is a win/win situation for everybody.

My question is, having taken the platform for a minute to talk about the program, the question is that it is my understanding the money for PT Phone Home, whatever amount is there, was available through the minor project construction account.

And my question is, how does that account look for 1996? Can we compare amounts of money that we had last year and will have for next year so that I can get a handle on where it is going to be in the coming year?

Secretary Brown. Well, let me say as a matter of policy, Mr. Quinn, that I agree with you. It is a wonderful project. I am so thankful for the volunteers who spend time and their efforts in our VA hospitals. We have about 92,000 of them come to our hospitals each and every day to help our veterans and they contribute somewhere around $165 million of their services to us.

This particular project, and I am going to ask Mark to respond, it is going forward like rapid fire, all over the country, and we are going to support it. Any project will be funded. We will find the money, and I am making a commitment, we will find the money if all the other pieces are there. There will not be any projects that are turned down simply because we don't have the resources, because it is, as you pointed out, so very, very important, and it is cost-effective to us.

They are providing all of the expertise, and in many cases they are also providing the materials. So we would be foolish not to take advantage of that while it is made available to us, Mark.

Mr. Catlett. Mr. Quinn, I don't have the specifics here, we will get those to you right away, but the schedule that we are working towards is completion for the Nation by the end of 1996.

[The information follows:]

Under the Medical Care appropriation, the Veterans Health Administration expects to spend $23 million in fiscal year 1995 and $5 million in fiscal year 1996 to complete the installation of bedside telephones at all VA Medical Centers. The Congress provided $5 million of the $34 million which we will spend in fiscal year 1995. The $28 million will complete the installation of bedside telephones in the remaining 77 medical centers by end of 1996.

Mr. Catlett. We certainly have an excellent minor construction budget and as have you and the Secretary have noted most of the funding is not Federal appropriated dollars that is making this happen which is a great feature of this program.

So, as Jesse said, we will have, with the excellent minor budget that we propose, any funding that we would need. We will provide those details to you. But overall by the end of 1996, we are to have this completed throughout the Nation.

Mr. Quinn. Thank you. I would be interested to have that information and I will share it of course with other members of the committee and the Chair Monday.

I think it would also be helpful for us to share that information with some of those volunteers, namely the communication workers of America and at the same time the management of some of those phone companies, Mr. Secretary, as you mentioned, who come up with the hardware, the actual telephones and the wiring and the volunteer hours.

If we put a price tag on it and we tried to in our situation last year, it's literally hundreds of thousands of dollars for that one particular hospital. So it is absolutely a win/win. I know with the communication workers when I talked to Frank Fozio a couple of times on the telephone, he is always concerned that he doesn't see a line item in the budget for the money. I told him I would be giving him a call later today or Monday after our discussion today. I think I will hold off, Mr. Catlett, until I have those budget numbers from you, if it is okay, in the early part of next week.

Mr. Catlett. We will have them to you this week.

Mr. Quinn. That would be super.

Secretary Brown. Mr. Quinn, I just wanted to thank you for your help and your support of veterans.

Mr. Quinn. Happy to do it.

Thank you, Mr. Chairman.

The Chairman. Mr. Ney, Mr. Cooley.

OPENING STATEMENT OF HON. WES COOLEY

Mr. Cooley. Thank you, Mr. Chairman. And thank you, Mr. Brown, for being here today.

As you probably know, I am the only Korean veteran to be elected to the 104th Congress and I also have a small disability in which I lost part of my hearing in the Korean conflict.

I am looking over your budget figures and I look at the expenditures of $257 million, an increase of $5 million over last year for research. I think that the prosthetic research is quite vital to the American veterans because basically no one else is doing that. But I wonder at the expenditure of funds if we really need to be spending money on aging, mental illness, heart disease, diabetes, cancer, and AIDS research when we have other Federal agencies doing the same thing. If maybe some of that money couldn't be rechanneled into some of the things that we discussed earlier about the possibility of helping veterans at the service level and rechanneling some of those funds, maybe not into these research areas, but back to basics.

Could you give me some comment on that? Because I find that we are duplicating at NIH and everywhere else, every one of the things that you are working on as well, and wouldn't it be better to spend our money, our veterans' money, on veterans and not doing research. In your statement here you don't talk about veterans' health care, but that of the entire population. Well, this seems like a duplication.

Secretary Brown. Yes, sir. I understand your question, but I don't think I agree with your conclusion. VA is kind of a unique entity within our society.

We have 172 hospitals and I think about 126 medical schools around the country, and we are affiliated with about 106--104 of them. Research helps us attract quality people into our system. Many doctors are not necessarily interested in hands-on care. But if we can attract them into our research effort, many of them stay, and they become hands-on clinicians. They actually end up working with the patient and improving quality of care. They become part of our team in providing quality care through their sophisticated research that is going to benefit our veterans, but not only veterans, but people throughout the Nation.

For instance, the CAT SCAN was invented by VA. Not too long ago VA came out with a study saying VA is doing something a little bit different from many of the other research institutions around the country. Most of them want to get into the real sexy stuff, the high-tech stuff. VA tends to focus a lot of its attention in clinical areas. For instance, not too long ago they came out with a conclusion that you can't treat people of different races and different ages with the same medication to control hypertension. So that not only benefited our veterans, but it also benefited the entire country and people around the world.

So research is very important in allowing us to attract quality people into our institutions which end up serving our own purpose.

Mr. Cooley. Well, the thing is that I am just questioning if the Department of Veterans Affairs should be spending these monies. Is it possible that the committee could receive a breakdown of the $257 million in research money is going into these particular areas?

Secretary Brown. I think the answer to that is yes, but I am going to ask Dr. Kizer to respond.

Dr. Kizer. Sir, if I might respond, one of the things I plan to do is to look in depth at how we make the decisions to allocate our research funds, what our commitments are and what was the process of deciding that. In many cases research relates to health problems of the patients we treat. For example, about 7 percent of all of the AIDS patients in the Nation are treated at VA facilities.

I believe we are the single largest provider of AIDS treatment in the Nation. Many of our patients are diabetics or they have other conditions such as you mentioned before. So doing research in these diseases, particularly clinical, applied types of research, is directly germane to the care that is provided in our facilities.

But having said that, I also have had some of the same questions which I think that you are raising. Over the next several weeks I hope to undertake a more thorough review of exactly how we decide on the research projects that we fund. I will be happy to get back to you after I have completed this review to share with you the results and then perhaps to further address some of the concerns that you have.

Mr. Cooley. I am specifically interested in how much money we are putting into the prosthetic research, because I think that the Veterans' Administration is probably the leader in that area and that maybe we ought to be putting some more in there, because that is a vital part of bringing people back to normalcy, if we can use that term, when they have severe problems involved in this process.

Dr. Kizer. Well, we can certainly get that information to you, and that is one of the specific areas that I intend to review, particualrly how prosthetic research balances out with other areas that we are funding.

Mr. Cooley. Thank you very much.

The Chairman. Mr. Kennedy, Mr. Schaefer, Mr. Flanagan.

OPENING STATEMENT OF HON. MIKE FLANAGAN

Mr. Flanagan. Good morning, Mr. Secretary. Thank you for bringing this distinguished panel here.

Mr. Chairman, before I begin, I have a statement and some prepared questions for the record, which I would like to submit, and in the interest of time, I will just ask one of the questions.

The Chairman. Without objection.

Mr. Flanagan. Thank you.

I will once again revisit the horrors of the cemetery condition in Chicago. Mr. Gutierrez has very adequately brought the problem before us again today, and while Lou and I agree on virtually nothing, if you look at our voting records, we certainly agree on this, and that is our love for the city and our need for the cemetery.

Chicago, the statistical area that we are talking about, is between 8 and 10 million people, ranging between 17 and 20 congressional districts. And if my intensity of this seems a little significant, it is because the last national cemetery there, I believe, was closed after the Civil War. We haven't had a place to inter veterans in that area in 100 years. We need a cemetery. Promises have been made in the past, and I am mildly concerned that in your budgetary criteria you have allocated or put aside enough money to maintain the interment sites, and actually, as we have heard earlier today, are going to develop an equipment backlog in this area of the veterans affairs.

The money you have said is laying there to acquire the Joliet site. The history of it, I think, is a little longer involving the Fort Sheridan site, and I am concerned that short shrift was given to the Sheridan site and continues to be.

Mr. Bowen and I have talked on two occasions now, and Mr. Weller has introduced very important legislation to try to solve this problem, as has Mr. Crane in the past, Mr. Porter, and other Members have taken a very deep and concerning interest in a very specific way.

I wonder if I can ask Mr. Gutierrez' question again; when can Chicago look forward to having a cemetery for that area?

Secretary Brown. We can't give you an answer right now, but I can tell you, we don't have a problem there. There is no problem. We will build that cemetery. We are in the process of acquiring the rights to the land, and we are going to move forward.

There is absolutely--I see no real major problem, I really do not. And if something should develop, we will certainly be in touch with you and Mr. Gutierrez whom I have spoken with a number of times. He has been out on the lead on this issue, and we will make sure you receive that information. But I don't see a problem.

Mr. Flanagan. Well, I appreciate your concern, and the level of concern of Mr. Bowen as well. And we have talked about this again and again in a timetable, and been assured again and again, and yet you still are reluctant to get even an approximate date. And I am not trying to ask you to give me one now or anything like that, because I realize it is impossible in the context of what we are talking about.

Secretary Brown. Yes.

Mr. Flanagan. But I just wish to make it very clear to you the problem that many of these congressional districts and these millions of people have in not having a place to be interred in Chicago.

Secretary Brown. I agree with you, and I am saying for the record, we don't have a problem there. That is the least of our problems; of course, unless someone takes the money out of the budget.

Mr. Flanagan. Well, it is the greatest problem for the elderly vets in Chicago, I assure you, Mr. Secretary.

Thank you, Mr. Chairman.

[The prepared statement of Congresssman Flanagan appears on p. 78.]

Mr. Gutierrez. Would the gentleman yield?

Mr. Flanagan. Yes, Mr. Gutierrez.

Mr. Gutierrez. Mr. Secretary, you have been very generous in coming out and holding hearings with the veterans in Chicago, and with me specifically, and obviously Lane Evans' oversight committee that held a hearing on this. And I just think that somebody has already issued a statement on your behalf.

At the November 6, 1993 field hearing, held under Congressman Lane Evans' oversight committee, we heard from your representative, and I am just going to quote from him quickly and then we can move on: ``Let me emphasize that VA Secretary Jesse Brown has taken every opportunity to express his support for a national cemetery for veterans in the Chicago area. We hope to complete this project and be able to dedicate a new national cemetery, a national shrine for this area's veterans by November of 1997, just 4 years from now.'' That was the statement of the representative of the Veterans' Administration at the oversight hearing.

And I think that is why we are--I wanted to share that with you, because I know you didn't say that there at that hearing and that sometimes people misspeak at hearings. But if we could just have a definite time--not right now.

If you could just respond to us and say this is the track that we are on so that we can go back to the veterans and tell them here is what is going on today in 1995.

Secretary Brown. Give us a chance to work on it.

Mr. Gutierrez. Thank you very much, Mr. Secretary.

The Chairman. We have about seven people, and the Secretary has to be at another meeting by noon.

Mr. Evans from Illinois.

Mr. Evans. Thank you, Mr. Chairman.

Mr. Secretary, the VA's Readjustment Counseling Services is one of its best services, it has treated thousands of veterans, helping to make that transition back to civilian life. It has strong bipartisan support in Congress.

What is the budget request for the VA Readjustment Counseling Service and the anticipated caseload during fiscal year 1996?

Secretary Brown. We don't have that, Mr. Evans, but we will get it for you.

Mr. Evans. All right. That will be submitted as part of your testimony in the record?

Secretary Brown. Yes.

Mr. Evans. I understand Mr. Montgomery raised the issue of the GI bill with the COLA only being about 50 percent in terms of the cost of living that veterans need to go to school on the GI bill. Why are you proposing that and what impact do you think this might have on the use of the GI bill in the next fiscal year?

Secretary Brown. The reason we are proposing it primarily is because it is an extension of present law, is an extension of the 1993 OBRA provisions. And we felt that in order to make a contribution toward deficit reduction, this would be an area where we would not have to end up eroding any benefits, the basic core of benefits. There were 11 of them.

Of the 11, 9 were scheduled to terminate in 1998; 3 of them were scheduled to terminate in 1995, and they are the rounddown of the COLA, the DIC, and the GI bill. So that is it in a nutshell. I do want you to know, as I have already said, we are willing to work with the members of this committee on that issue.

Mr. Evans. What would an average GI bill monthly payment be for a veteran on the GI bill, with the 50 percent reduction and the cost-of-living adjustment?

Secretary Brown. We can get that for you.

Mr. Evans. All right. I think all of us are concerned that it is not going to be a viable program if it doesn't keep at least pace with inflation, or with regular inflation, much less with the increases that we see in tuition in the last few years, so I would appreciate you getting back to me.

Secretary Brown. We will.

[The information follows:]

The average GI bill monthly payment for a veteran will be $411.36 in 1996 with a 50ÿ20percent reduction in the cost of living adjustment.

The Chairman. The gentleman from Georgia, Mr. Bishop.

Mr. Bishop. Thank you very much, Mr. Chairman.

Thank you, Mr. Secretary, for all that you do for veterans. We sincerely appreciate your sensitivities.

Moving to your budget proposals, as you know, there is a tremendous backlog in dealing with the processing time for disability claims, and looking at your proposed budget, could you sort of give us in a nutshell how you can reconcile the mission to deliver timely benefits with the 200-day processing time for disability claims, and is there anything in the budget that specifically will help to address that backlog and the time lag in dealing with the disability claims?

Secretary Brown. Yes, Mr. Bishop. We are very concerned about our timeliness, but for the purpose of your question, I have to break that question down between timeliness and the Veterans Benefits Administration and the Board of Veterans' Appeals.

In the Veterans Benefits Administration, we are extremely happy about what has occurred. In 1994, our backlog was 452,000. In 1995, it was 386,000; and in 1996, 296,000. And we expect to reach our goal of 250,000 in 1998. And that is where we want to be at 250,000, because we have about 13,000 people out there, and that will keep them busy all year-round and we will be able to get the cases out.

So we really do not have a problem in timeliness at the regional office. Where we have the big problem is that if a veteran files an appeal, because at the Board of Veterans' Appeals, the processing time there--give me those numbers, please.

At the Board of Veterans' Appeals, which is what I am really concerned about, in 1991, our average response time was 139 days. In 1992, it was 240 days. In 1993, 466; 1994, 781. In 1995, it dipped a little bit, to 745.

Mr. Bishop. Is that the number of days?

Secretary Brown. Yes, sir. And you can see why we are very, very concerned about that. While it dropped down a little bit and we received some help from the Congress in the last session, we have one-man decision authority and there were some other things that we are doing. But we are very concerned about that.

I have asked a special panel to look at it, that consists of the service organizations. We even brought in people from the private sector and other government agencies to help us look at it and try to see how we can streamline that case management. So we are working very, very hard on that, and I hope that we will continue to have this moving south to try to stabilize it.

The other problem is that we still have more cases coming in than going out. So in order to make any headway at all, the first thing we have to do is to have the same amount coming in and the same amount going out, and then once we get there, then we can begin to see a little light. So we are working very hard on it and we are open, of course, to any suggestions that you can help us with.

Mr. Bishop. That is the biggest complaint that I get from my veterans, is the tremendous lag time in having their appeals adjudicated. And many times, they call the office saying that I will be dead before I ever get a decision one way or the other.

Secretary Brown. And some of them are right. If you think about it, some of them are right. It could be as much, in some cases, as 5 years. You take a guy, a World War II veteran, 72 years old, and if he has to wait 5 years, there is a good chance he will be dead. And the bad thing about it, if he dies and we allow his case, we can only pay his widow 1-year retroactive accrued benefits. So we recognize a decision delayed really is a bad thing.

Mr. Bishop. Is a decision made?

Secretary Brown. That is exactly right. So we are going to try our best on it.

Mr. Bishop. You anticipate $170 million in our medical malpractice claims for 1996. What steps have been taken to mitigate the need for malpractice claims?

We have had some complaints about treatment from veterans that they have received and some claims of malpractice in our VA hospitals. How is that being addressed?

Secretary Brown. This has a little bit different twist in terms of malpractice. What you are referring to is the Gardner decision, which was appealed to the Supreme Court. In that decision, we had been interpreting regulations since the beginning of time, that in order for VA to assume responsibility for something that happens to an individual while in a VA hospital as a result of treatment, that it had to have happened as a result of an accident or negligence, basically.

Based on the Supreme Court decision, they said no, that is not how it should be interpreted. Any veteran, basically where the condition is increased as a result of treatment, if it is not the desired result, then it should be service-connected. So this is a direct result of that decision. The first year is $170 million, and then I think the 5 years is $1.8 million?

Did I explain that right, Mary Lou?

Come on up here.

Ms. Keener. To respond directly to your question; as I heard it, you are asking what, if anything, we were doing to reduce the number of claims that we see in hospitals, whether they are 1151 claims or tort claims? Actually, I think that the answer to that question lies in with some of the things that Dr. Kizer is doing or intends to do in the area of quality assurance. Perhaps Dr. Garthwaite could respond to that.

Dr. Garthwaite. Surely. Every medical center's goal is to reduce all variation to zero. It is like running an airline. You want no crashes sustained over time, and I think our goal in health care is no mistakes sustained over time.

Unfortunately, all health care systems are run by human beings who use a lot of judgment. We have instituted a national system of continuous quality improvement which looks at all of the processes to see if we can improve our processes to avoid instances of poor quality. We review on a regular basis all of the untoward events in the hospital, at least all of the major untoward events, and look to see if there are system problems or people problems and then we try to deal with those based on what we find.

Secretary Brown. Let me just follow up on that. First of all, did I explain that Gardner thing right?

Ms. Keener. Yes you did, Mr. Secretary. I assume; however, that your cost reference was to $1.8 billion rather than $1.8 million.

Secretary Brown. After that came into effect, Mr. Bishop--and I know you are a lawyer--so after that was brought to our attention, we did send out guidelines to all of our hospitals saying, this is what you will do in terms of people who come into the hospital. Is that right? You would tell them exactly how and what to expect? Did that go out?

Ms. Keener. Guidelines from the Benefits Administration went out regarding the manner in which pending claims are handled.

Secretary Brown. Mr. Bishop, let us get back with you on that. I think I recall what we did----

Ms. Keener. I think what the Secretary is referring to in conjunction with the Gardner decision, is that Dr. Kizer did send out guidelines to the field regarding informed consent to all providers within the system.

Mr. Bishop. That is not so much----

The Chairman. If the gentleman would please--other Members have sat here so we can get through this--before the Secretary has to leave, we will get right back to you.

Mr. Secretary, if you would identify the lady that just spoke, for the record?

Secretary Brown. Mr. Chairman, this is Dr. Garthwaite. He is our Deputy Under Secretary, and the lady that spoke is our General Counsel, Mary Lou Keener.

The Chairman. Thank you, Mr. Secretary.

I want you to know that people hope you are a little bit wrong in your statistics as relating to age and death.

The gentleman from Pennsylvania, Mr. Fox is recognized.

Mr. Fox. Thank you, Mr. Chairman. It is a pleasure to have before us this morning these honored special individuals who represent our veterans so ably, and Mr. Secretary, I am very happy to have you here today.

Secretary Brown. Thank you, sir.

Mr. Fox. One facility that serves my district is Coatesville Hospital. I wanted to hand over a newspaper article to you that, unfortunately, occurred, I guess, this week, a veteran choked to death at the hospital. And if you could have someone on your staff investigate it for me. I don't know whether it is a problem.

Following up with Congressman Bishop's questions on suits, obviously, we want to keep our veterans healthy.

To the extent that you can get back to my office and let us know, or the committee, everyone here, just what is being done over here, I don't know whether it is an isolated case or if we have a problem. There is an allegation of staff shortage, and if there is, I would like to know about it so we can work with the committee to address that.

Secretary Brown. Yes, sir, we will.

(Subsequently, the Department of Veterans Affairs provided the following information:)

The Secretary has responded directly to Congressman Fox in response to his April 11, 1995 letter (copy attached).

Mr. Fox. That is in Bucks County, Pennsylvania.

Secretary Brown. Yes, I have been there.

Mr. Fox. I have had questions from veterans in my area. Just another one brief area that I wanted to take your time on; what are the qualifications for inpatient or outpatient care with regard to the percent of disability, the percent a veteran is disabled?

Secretary Brown. If you are service-connected, you are basically entitled to inpatient and outpatient care for that service-connected disability. If you are nonservice-connected--and you correct me if I am wrong, Dr. Garthwaite--if you are nonservice-connected, (1) there is a judgment made if you may need