TESTIMONY BY BOBBY L. HARNAGE, SR. NATIONAL PRESIDENT AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, AFL-CIO BEFORE THE HOUSE COMMITTEE ON VETERANS' AFFAIRS HEALTH SUBCOMMITTEE REGARDING THE RECRUITMENT, RETENTION AND PAY OF THE VA HEALTH CARE WORKFORCE APRIL 12, 2000
Mr. Chairman, Ranking Member Guitierrez, members of the Subcommittee: my name is Bobby L. Harnage, Sr. I am President of the American Federation of Government Employees, AFL-CIO (AFGE). As the largest federal employees union, AFGE represents over 600,000 federal employees, including roughly 125,000 Department of Veterans' Affairs (DVA) workers across the nation. We appreciate your recognition of the importance of having experienced DVA health care workers provide veterans with high quality, safe and compassionate health care. Unquestionably, DVA’s ability to recruit, retain and pay fairly and adequately these health care professionals is key to operating a unique health care system for veterans. The primary focus of this Subcommittee’s hearing is on Veterans Health Administration (VHA) clinicians and Registered Nurses (RNs). AFGE would be remiss, however, if we did not call to your attention the many other DVA employees who also are indispensable to providing veterans with specialized health care and ensuring that veterans are treated with respect and dignity. Like RNs and MDs, these employees care for and about veterans. They also do the sometimes dirty, difficult and hazardous work that is essential to the delivery of high quality medical care. Support staff, who clean the wards, transport patients, enter medical record transcriptions, monitor and restock medical supplies, prepare and deliver food, or perform a multitude of administrative tasks, allow nurses and other clinical staff to spend more of their time on direct patient care. Adequate pay and respect for these workers, who are no less professional or dedicated, is also extremely important. Overall, pay and benefits for federal employees need considerable improvement. Our remarks for this hearing, however, will focus on the bills that have been referred to this Subcommittee for review and appropriate action, and how they would positively affect the recruitment, retention and pay of VHA health care workers. AFGE supports H.R. 1216, the Department of Veterans Affairs Nurse Appreciation Act and H.R. 2660, which addresses pay parity for dentists. A decade ago this Subcommittee responded to a national nursing shortage by replacing DVA’s national salary schedule for RNs and Certified Registered Nurse Anesthetists (CRNAs) with a locality–pay system. Under the Nurses' Locality Pay Act medical facility directors were granted the discretion to make locality pay adjustments based upon a local pay survey. Collecting valid salary data has been a continuous challenge for DVA. Unlike Bureau of Labor Statistics (BLS) employees, Medical facility staff are not experts in detecting sample bias or error, or collecting and validating salary data. Comparing the jobs of DVA nurses to non-DVA counterparts has inherent difficulties because nursing duties at the DVA are not interchangeable with the commercial sector. DVA nurses have higher educational requirements and are routinely responsible for care activities not usually required of nurses in the non-DVA facilities. Job matching also requires technical expertise and skills. Another basic problem with the survey process is that it requires DVA to focus on published beginning rates of pay, which may not reflect actual pay rates or middle rates of pay for more experienced nurses. The challenges confronting DVA in obtaining accurate and complete survey data are significant and troubling. These issues, however, are secondary to the problems that arise in the next stage of the process. Medical Directors are the DVA officials who have the statutory authority to determine whether to make an adjustment to their staff nurses’ pay. If the Medical Director determines that no adjustment is necessary then the nurses at that facility receive no annual pay increase. Under the law, the pay adjustment can be a decrease in pay. DVA Central Office reviews all determinations but the Secretary has no real authority to require that any Medical Director raise nurses’ pay at any facility. The purpose of the nurse locality pay system was to enable Medical Directors to act quickly and effectively to prevent nurse pay problems so that each DVA medical facility could recruit and retain the highest caliber of nursing staff. Directors were expected to use their broad authority to provide fair and adequate salaries for nursing staff. In addition, Congress gave the Secretary the authority to place other health care workers under this locality-pay based system. This change for Title 38 employees occurred at the same time Congress was considering broader pay reform for General Schedule (GS) federal employees. In 1990, President George Bush signed into law the Federal Employees Pay Comparability Act (FEPCA) to close the pay gap between private and public sector counterparts over a nine-year period. FEPCA did not create cost-of-living adjustments or COLAs. Under FEPCA, GS employees, including those who work as DVA health care workers, receive (1) a nationwide increase linked to the Bureau of Labor Statistics’ Employment Cost Index (ECI), which measures the change in private sector wages and salaries; and (2) a locality increase, based on a comparison of a range of non-federal and GS salaries in 32 pay areas across the nation. The current Nurse Locality Pay system has some positive features but it also has some flaws, which have not been amenable to redress. This pay system was designed before the Veterans Health Administration (VHA) reorganized into integrated networks, initiated formula changes to resource allocations, and tried to survive years of flat line budgets. AFGE believes these changes exacerbated the inherent problems in the nurse pay system and have contributed to a crisis in the legitimacy of this pay system. Problem: Medical Directors Have Broad Authority to Deny Nurses a Pay Increase Under the nurse locality-pay system, DVA Registered Nurses do not receive either the nationwide or locality component of the annual pay raise under FEPCA. Since FEPCA’s enactment, GS workers have received a pay increase every year (although these increases were not as large as required by the full implementation of FEPCA). Unfortunately, thousands of DVA nurses have not received annual increases. Medical Directors have wide latitude in deciding whether an adjustment is necessary to prevent a recruitment or retention problem. Indeed, even when a local survey indicates a significant gap in the rates of pay between DVA nurses and their private sector counterparts, a Medical Director has the authority to deny nurses any annual pay increase. This is possible because under the law if a Medical Director simply declares that there is "no retention or recruitment problem at the facility" then no pay raise is required. Both the DVA nurse pay system and FEPCA as federal employee pay systems are designed to balance the desire of federal managers to be able to compete for applicants in all labor markets and front line workers’ needs to maintain a fair and adequate standard of living. Permitting Medical Directors to have unfettered discretion to deny nurses a pay increases when survey data indicates that the facility is not offering competitive pay calls into question the fairness and legitimacy of this pay system. It also deprives nurses of annual increases that are necessary to maintain their economic purchasing power. Even when DVA nurses received pay increases, these raises lagged behind those given to GS workers. For example, in 1996, the average pay raise for nurses was 1.2 percent; compared to the 2.4 percent average increase received by their GS co-workers. In 1997, the average pay raise for nurses was again 1.2 percent, compared to the 3.0 percent average increase received by their GS co-workers. In 1998, the average pay raise for nurses was 2.2 percent, compared to the 2.9 percent average increase received by their GS co-workers. In 1999, the average pay raise for nurses was 3.0 percent, compared to the 3.6 percent average increase received by their GS co-workers. From 1996 through 1999, DVA nurses on average were denied a cumulative pay raise equivalent to 4.5 percent because of the current pay system for nurses. This loss of pay affects the pocketbooks of nurses now and when they retire. The VHA’s nurses’ pay system should reflect that VHA is a unique and unparalleled health care system. It provides care and treatment that is not easily obtainable in the commercial sector. This subcommittee has prompted and supported VHA preeminence in the treatment and rehabilitation of disabled veterans (including those with spinal cord dysfunction, blindness, amputations, mental illness), care for homeless veterans, and treatment of Hepatitis C Virus. VHA needs employees whose training and career focus is dedicated to serving only veterans and providing them with specialized treatment for their distinctive injuries, disabilities, illnesses and medical conditions. Accordingly, the VHA particular pay system should not only attract talented health care workers entering their profession but also continue to give them repeated incentives to develop their nursing and medical expertise in treating veterans. Logically, VHA should be placing a premium on staff who devote their careers, competence, skills and experience to treating veterans. Denying experienced nurses any annual pay increase flies in the face of this logic. The rationale for an annual increase for valued employees is more compelling as VHA undergoes restructuring. VHA is reducing beds, downsizing its staff who provide acute, subacute and psychiatric inpatient care, putting greater emphasis on cost-cutting measures and increasing outpatient surgery and treatment. At the same time the medical needs of the aging veteran population have intensified and are more complex, even as the overall population declines. With fewer RNs and fewer support staff caring for frailer, sicker veterans (who typically have multiple physical and mental illnesses), patient care can be at risk. Thus, the need to respect, appreciate and pay fairly seasoned nursing staff escalates. Unfortunately, many Medical Directors have exercised their discretionary authority to deny dedicated nurses a pay increase. To their credit, when AFGE called attention to this problem, the VHA leadership and Central Office staff tried to address it. For the past few years the Under Secretary for Health has used his bully pulpit to issue information letters to Medical Directors urging them to pass along the GS increase. We appreciate these efforts and they have made some improvement. But even this year Medical Directors denied nurses in Lake City, Florida and Gainesville, Florida any pay increase, even after the Under Secretary sent out his most strongly worded letter. Unfortunately, these persuasive letters are of limited value because by law it is the Medical Director -- and not the Secretary or Under Secretary for Health – who is vested with the authority to determine whether and how much of a raise will be given. How would H.R. 1216 address this problem? The intent of H.R. 1216 is to guarantee DVA nurses (and any other health care employees for whom a Medical Director has discretion over whether or not to pass on an annual increase) the same GS increase plus locality pay given to virtually all other federal workers. It is to create a floor for nurses’ pay. This change would not restrict the ability of Medical Directors to increase salaries more than the GS percentage. Under H.R. 1216, the Secretary would still have authority to increase nurses’ pay above the GS nationwide and locality pay raise if needed. This authority could be delegated to Medical Directors but, as with other delegations of authority, the Secretary would retain ultimate authority. H.R. 1216 restores common sense to "recruitment and retention." The current law provides a perverse opportunity for medical directors to cut costs by not rewarding its most experienced nurses. It is unfair and inexcusable that nurses should be penalized for their loyalty as employees and willingness to devote years of service to caring for veterans. Nurses, like their GS co-workers, deserve an annual pay increase. Requiring the DVA to pay nurses the same nationwide and locality pay raise given to GS employees is consistent with the DVA’s budget submissions for the past several fiscal years. In FY 2001, the DVA requested $63.5 to support pay raises for RNs under the nurse locality pay system. The FY 2001 request takes for granted that nurses would be receiving that same percentage of the combined nationwide and locality increase as was requested for GS employees. Therefore, requiring the DVA to provide nurses with the same total percentage increase as their GS co-workers will not undermine or disrupt the DVA’s budget. Problem: Medical Directors Have Authority to Impose Negative Pay Adjustments By law DVA is prohibited from being the "pay leader" in the community. As such when Medical Directors review the survey data they have obtained and they determine that it is valid and shows that DVA is paying nurses more than their non-DVA counterparts, Medical Directors adjust nurses pay negatively. In effect this is a pay cut. The nurses in Louisville got a negative pay adjustment of –7.7% in 1998. That followed a –2.6% pay adjustment in 1997. These negative adjustments occurred at a time when federal employees were required to pay more for their own health care benefits under FEHBP. Even after two years of increases (in 1999 and 2000) after these negative adjustments, these nurses have yet to see a real dollar increase in their pay. Their retirement benefits have also been eroded as a result of these negative adjustments. I have written to Secretary West urging him to take action to address this egregious problem. We have worked with DVA headquarters staff and at the local level to remedy such negative pay adjustments. AFGE members and staff have tried to identify legitimate ways for DVA to revise its regulations to prohibit negative pay adjustments. But at each turn we are confronted by two facts. The law does not allow the DVA to be the leader in pay. And, DVA regards the law as vesting all discretion over pay determinations for nurses with the Medical Director and the Secretary has virtually no authority to overturn such drastic pay decisions. The contractor hired by DVA to study the nurse pay system also was troubled by negative pay adjustments because of the significant potential for errors and bias in the survey data and the fact that pay cuts are "very rare in non-government organizations, except in widespread economic depressions." The negative pay adjustments to the nurses in Louisville, and in Bay Pines, and Danville, occurred in recent years during times of sustained economic growth for our nation. The contractor urged the DVA to provide "guidance" to medical directors to discourage negative pay adjustments unless very convincing statistical evidence can demonstrate that such a drastic measure is required. We are concerned that "guidance" will not be sufficient to rectify this problem as long as law gives the Secretary no meaningful authority to overturn negative pay decisions. How would H.R. 1216 correct this problem? By guaranteeing nurses the full percentage of the GS pay increase negative pay adjustments will be prohibited in reality and under the law. The Need to Maintain Flexibility to Pay Nurses Higher Percentage Increases than the GS Pay Raise The intent of H.R. 1216 is not to deny Medical Directors or the Secretary the flexibility to respond to current or future demands to recruit nurses at higher salaries. Many facilities are experiencing nursing shortages, as evidenced by their regular use of fee-basis or agency nurses to fill shifts for extended periods. According to the Division of Nursing of the U.S. Department of Health and Human Services, if current trends continue, rising demand will outstrip the supply of RNs beginning approximately 2010. DVA will shortly be competing in an even tighter national nursing labor market. H.R. 1216 gives BLS needed lead time to take over the collecting of salary survey data that has proven so difficult for DVA. Conclusion The intent of H.R. 1216 is to create a floor – not a ceiling – for nurses’ pay raises. We realize that the technical drafting of this bill may not fully meet this intent and we would welcome the opportunity to work with the subcommittee and your staff to ensure that H.R. 1216 is modified in markup to address these unintended problems. The value and respect given to DVA’s health care workers ultimately reflects on and comes back to the commitment, value and concern the agency has for veterans. When DVA fails to acknowledge and enormous contributions of nurses, physicians and other health care workers make to high quality medical research and care for veterans it also does a disservice to the veterans under their care. AFGE urges this subcommittee to support H.R. 1216 and H.R. 2660. Thank you. This concludes my remarks. I will be happy to answer any questions. Back to Witness List |