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STATEMENT OF DENNIS CULLINAN, DIRECTOR NATIONAL LEGISLATIVE SERVICE VETERANS OF FOREIGN WARS OF THE UNITED STATES BEFORE THE COMMITTEE ON ARMED SERVICES SUBCOMMITTEE ON MILITARY PERSONNEL AND COMMITTEE ON VETERANS’ AFFAIRS SUBCOMMITTEE ON HEALTH WITH RESPECT TO DEPARTMENTS OF DEFENSE’s (DoD ) AND VETERANS AFFAIRS’s (VA) HEALTH CARE SHARING MARCH 7, 2002
MR. CHAIRMAN AND MEMBERS OF THE SUBCOMMITTEES: On behalf of the 2.7 million members of the Veterans of Foreign Wars of the United States (VFW) and its Ladies Auxiliary, I would like to thank you for the opportunity to discuss ways in which DoD and VA can promote greater sharing of federal health care resources. This important concept was authorized in 1982 by the enactment of PL 97-174, the Veterans’ Administration and Department of Defense Health Resources Sharing and Emergency Operations Act. The codification of this Act in 38 U. S. C. § 8111 and 10 U. S. C. § 1104 states that “ the Secretary [VA] and the Secretary of the Army, the Secretary of the Air Force, and the Secretary of the Navy may enter into agreements and contracts for the mutual use or exchange of use of hospital and domiciliary facilities, and such supplies, equipment, material, and other resources as may be needed to operate such facilities…” In addition, Title 38 U. S. C. § 8110 mandates VA to serve as the principal backup to DoD in the event of war or national emergency by “maintain[ing] a contingency capacity” within their medical facilities. The VFW recently testified before Congress regarding this specific section of the law. I have taken the liberty to attach a copy of that testimony for your information. Before we address the numerous opportunities for sharing between DoD and VA, we believe it important to note that they are two, separate and distinct entities with different missions: One, to fight and win the nation’s wars; and the other, to care for those who bear the scars from those wars. VA conducts its health care mission as a direct care provider to honorably discharged veterans through the Veterans Health Administration (VHA), while DoD conducts its health care mission as a direct care provider and insurance purchaser (TRICARE) for members of the Armed Forces, retirees, and their dependents through the Military Health System (MHS). As such, they both possess cultural and institutional barriers that must be broken down, or at the very least mitigated, in order to create a healthcare partnership. We know from experience that this is easier said than done. Therefore, we were not surprised to find that this partnership has been slow to develop. This unhurried pace is evidenced by the fact that both systems have been authorized to share health care resources for nearly twenty years and the most recent testimony by the Congressional oversight staff before this task force stated that there were 400 active agreements at 160 facilities and most alarming is only 30 are actually working. Congressional testimony concerning resource sharing delivered by DoD and VA in May 2000, however, stated that there were over 800 sharing agreements in place. As a veteran’s service organization, we find ourselves deeply troubled and perplexed over this discrepancy in data. The question arises, are these agreements that are in place being enacted and what type of accountability or incentive is there to ensure that they are? We believe that increased projected savings and better services for beneficiaries from sharing agreements can only be realized if there is a total commitment from the highest levels of each Department. The respective secretaries must shine a spotlight, so to speak, on DOD /VA health care resource sharing. Their delegates must understand that they have the authority to identify and enact mutually beneficial agreements and in fact, are expected to act. Failure to act on identifiable and beneficial agreements should be met with swift Departmental and Congressional action. Further troubling to the VFW is the finding by Congressional Commission on Servicemembers and Veterans Transition Assistance (Principi Commission) that stated both systems share only $62 million of a combined $32 billion plus healthcare budget while “both healthcare systems face the challenge of adapting to changing health care practices, an evolving patient population, infrastructure built for another era, and increasing healthcare costs in a time of severe budget pressure.” Government Accounting Office (GAO) studies and Congressional hearings have further highlighted and suggested the need to restructure the two systems in order to promote and maximize greater sharing of health care resources and to potentially reduce costs due to duplication and/or under use of those resources. We concur with these assessments in that there is need for improved coordination between both systems. We, however, question what constitutes the standard of success for sharing agreements: Mere cost savings or enhanced beneficiary access and quality care? The VFW cannot emphasize enough our conviction that any sharing agreement between DoD and VA conform to 38 U. S. C. § 8111(c)(1) in that it not “adversely affect the range of services, the quality of care, or the established priorities for care provided by either agency.” Simply put, we will support only that that does no harm to the beneficiary no matter the cost savings that may be generated. Further, any savings realized as result of a sharing agreement should be immediately reinvested into their respective health care systems without offset from congressional appropriation. This is vital in that there would be no need to emphasize sharing or restructuring if both systems were flush with adequate appropriations every fiscal year. For all their differences, we believe there are a number of areas where DoD and VA can work together to improve cost sharing as well as the range of services and the quality of care provided to our nation’s Armed Forces, military retirees and veterans. In fact, they already are in certain areas. The VFW supports expanding and enforcing these existing types of agreements while encouraging both agencies to continue to identify new sharing agreements extending to every military branch and ranging from proven models such as: shared staffing; buying or selling services; joint ventures such as the Alaska VA Healthcare system which boasts a VA/DoD hospital shared with the 3rd Medical Group, Elmendorf Air Force Base; joint purchasing of pharmaceuticals and medical/surgical supplies; education and training to include Graduate Medical Education; consolidated procurement; joint research groups such as the Persian Gulf Veterans Health Coordinating Board which has evolved into the Military and Veterans Health Coordinating Board; and advanced technology such as the Government Computer-based Patient Record project. In addition, we are aware both departments are considering the process and means of realigning their assets to enhance the way they do business; VA with its Capital Asset Realignment for Enhanced Services (CARES) and DoD has been authorized a future round of Base Realignment and Closure (BRAC). The VFW believes that these programs provide an important and timely venue for DoD and VA to consider new means of sharing agreements. This is especially relevant in the area of joint ventures. It is imperative that interagency communications exist at all levels and phases of the restructuring processes and careful attention should be paid to changes occurring within each department as a result. We also note with interest that both the National Defense Authorization Act (NDAA) and the VA-HUD Appropriation Act Conference Reports for fiscal year 2002 contain prescriptive language in the area of VA-DoD health care sharing. While the NDAA extends sharing agreements in graduate medical education and separation physicals, VA-HUD calls for DoD and VA to find “no less than three demonstration sites where DoD and VA will fully integrate operations, pharmacy services, billing and records, and treatment.” We respect and support Congress’ actions to get things moving faster, however, forced integration for cost reasons should not be thrust upon the two agencies to the detriment of beneficiary care and access. As this task force considers new and innovative ways to improve health care delivery for our nation’s veterans we would recommend you focus your attention on what we believe could provide a viable and significant alternative funding source (other than appropriations) for VA – Medicare Subvention. The subvention concept would allow VA to collect and retain Medicare dollars while at the same time providing Medicare-eligible veterans with the option of having VA provide for their non-service connected health care needs. It is important to point out that many Medicare-eligible veterans, principally among the military retirees, would prefer VA health care to care provided by the private sector. Unfortunately, current law prohibits Medicare from reimbursing VA for the medical services it provides to eligible veterans. This, in spite of the fact that these very same veterans may go to the private sector providers and take their earned Medicare dollars with them. This situation deprives veterans of the VA health care they earned and desire while denying the system desperately needed additional funding. DoD recently completed a three-year pilot program on Medicare subvention and GAO found that “enrollees in [the pilot program] said they were better able to get care when they needed it. They also reported better access to doctors in general as well as care at military treatment facilities. Enrollees generally were more satisfied with their care than before the demonstration.” We note that the cost for this program was higher for DoD. VA, on the other, hand already possesses and can provide health care services at lower cost than DoD thereby providing expanded access to more veterans and cost savings to the Medicare Trust Fund. The VFW has made Medicare subvention one of its top legislative priorities. This past August, our National Convention approved VFW National Resolution #622 calling for a change in law that would authorize VA to collect and retain all Medicare dollars. I have attached a copy of this resolution for your use. Once again, we are thankful for the opportunity to participate in today’s important hearing and we hope we were able to contribute sensible recommendations to you as you seek to make sound policy for the next generation of our nation’s armed forces, military retirees and veterans. This concludes my testimony and I would be pleased to answer any questions you or the members of this subcommittee may have at this time. Back to Witness List |