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The Future of the U.S. Department of Veterans Affairs Health Care in South Louisiana

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JULY 9, 2007

SERIAL No. 110-32

Printed for the use of the Committee on Veterans' Affairs





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BOB FILNER, California, Chairman


VIC SNYDER, Arkansas
JOHN J. HALL, New York
PHIL HARE, Illinois
MICHAEL F. DOYLE, Pennsylvania
TIMOTHY J. WALZ, Minnesota

STEVE BUYER,  Indiana, Ranking
HENRY E. BROWN, JR., South Carolina
BRIAN P. BILBRAY, California





Malcom A. Shorter, Staff Director

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public hearing records of the Committee on Veterans' Affairs are also published in electronic form. The printed hearing record remains the official version. Because electronic submissions are used to prepare both printed and electronic versions of the hearing record, the process of converting between various electronic formats may introduce unintentional errors or omissions. Such occurrences are inherent in the current publication process and should diminish as the process is further refined.



July 9, 2007

The Future of the U.S. Department of Veterans Affairs Healthcare in South Louisiana


Chairman Bob Filner
    Prepared statement of Chairman Filner
Hon. Michael H. Michaud, Chairman, Subcommittee on Health
    Prepared statement of Congressman Michaud
Hon. Jeff Miller, Ranking Republican Member, Subcommittee on Health
    Prepared statement of Congressman Miller
Hon. Richard H. Baker
Hon. William J. Jefferson


U.S. Department of Veterans Affairs, Rica Lewis-Payton, FACHE, Deputy Director, Veterans Integrated Service Network 16, Veterans Health Administration
    Prepared statement of Ms. Lewis-Payton

American Legion , William M. “Bill” Detweiler, Past National Commander
    Prepared statement of Mr. Detweiler
Disabled American Veterans, Chuck Trenchard, Adjutant, Department of Louisiana
    Prepared statement of Mr. Trenchard
Louisiana Department of Health and Hospitals, Frederick P. Cerise, M.D., M.P.H., Secretary,
    Prepared statement of Dr. Cerise
Louisiana State University Health Care Services Division, New Orleans, LA, Michael Kaiser, M.D., Acting Chief Medical Officer
    Prepared statement of Dr. Kaiser
Military Order of the Purple Heart, Henry J. Cook, III, National Senior Vice Commander
    Prepared statement of Mr. Cook
New Orleans, LA, City of, Hon. C. Ray Nagin, Mayor
    Prepared statement of Mayor Nagin
Penn, Bill, M.D. Baton Rouge, LA
    Prepared statement of Dr. Penn
Tulane University, New Orleans, LA, Alan M. Miller, Ph.D., M.D., Interim Senior Vice President for Health Sciences
    Prepared statement of Dr. Miller


Ochsner Health System, New Orleans, LA, Patrick J. Quinlan, M.D., Chief Executive Officer, statement
Veterans of Foreign Wars of the United States, Clayton P. “Sonny” Degrees, Jr., State Commander, Department of Louisiana, statement



Southeast Louisiana Veterans Health Care System, Individual Patients Treated FY 2005-FY 2007

Southeast Louisiana Veterans Health Care System, Map Showing the 23 Parishes with Clinics Serving Veterans in:  New Orleans, Baton Rouge, Hammond, St. John Parish, Slidell, and Houma

Southeast Louisiana Veterans Heath Care System, FY 2007 Patients by Parish


Monday, July 9, 2007
U. S. House of Representatives,
Committee on Veterans' Affairs,
Washington, DC.

The Committee met, pursuant to notice, at at 9:30 a.m., in the Supreme Court Building, 400 Royal Street, 4th Floor Courtroom, New Orleans, Louisiana, Honorable Bob Filner [Chairman of the Committee] presiding.

Present:  Representatives Filner, Michaud, Miller, and Baker.

Also Present: Representative Jefferson.


The CHAIRMAN.  Good morning.  The field hearing for the House Committee on Veterans' Affairs is called to order.

We thank you for your attendance, and thank all the Members for being here.  I'm the Chairman of the Committee.  My name is Bob Filner.  I'm from San Diego, California.  Mr. Baker is from Baton Rouge; is that correct?

Mr. BAKER.  (Nods head affirmatively).

The CHAIRMAN.  Mr. Miller from Florida, thank you for coming; Mr. Michaud from Maine, Mr. Jefferson from New Orleans. 

I do have to ask unanimous consent that Mr. Jefferson be invited to sit in for this hearing today.  Hearing no objection, that is ordered. 

And we also ask unanimous consent that all Members have five legislative days in which to revise or extend remarks and presenting statements be made part of the record.  And hearing no objection, that is ordered too.

We are here, as you know, to explore the challenges faced by the U.S. Department of Veterans Affairs (VA) and other healthcare facilities to provide high quality safe healthcare to veterans and citizens of this area.

We know what happened in August of 2005 causing obviously significant damage to an incredible large area in the southeastern United States.

In the three-State area of Louisiana, Mississippi and Alabama, the VA facilities affected included the Gulfport, Mississippi and New Orleans medical centers; New Orleans regional benefits office; and five community based outpatient clinics along the Gulf Coast; and Biloxi VA National Cemetery.

The VA has tried to respond to these challenges.  In many cases, they have done well, but we still do not have a VA hospital that's on the books for planning or that's on the—that's ready for construction.  We have to meet this challenge.

I noticed in all the testimony that I read beforehand there is incredible unanimity on the fact that, given this great difficulty that was faced, there is an opportunity to rebuild in a different, maybe more responsive, more collaborative way and I was extremely interested in the fact that everybody was so optimistic even given the bureaucratic challenges.

We have appropriated as a Congress $625 million and we have—and this Committee has urged the Secretary of the VA to make the decision about this without any further delay, so we are here.

It's a standard joke, "we're the Federal Government, we're here to help," but we are here to help.  I don't think the Nation responded as it should have quickly enough to the situation after hHurricane Katrina.  We have a long way to go on that.

This is, I think, the first hearing from a Committee to Congress here.  We are going to have several other hearings with different Committees of the Congress.  All the chairmen had met and said we are going to, as a group, make sure we understand what's going on in New Orleans and the surrounding area and do what we can to speed things up in terms of rebuilding.

We have two local Members from the—from the Louisiana delegation here with us.  Mr. Baker has been a hard-working Member of this Committee.  He never lets a hearing or a time go by without saying we have got to do something for New Orleans and for Louisiana.  He's in there fighting all the time and we appreciate Mr. Baker's contribution to the Committee.

And, of course, Mr. Jefferson, as the representative here, never lets me pass anywhere in Congress without saying when are we going to get the hospital, when are we going to rebuild the facilities, so you have—and the rest of the delegation for Louisiana are very hard working and they are trying to do the job for you and we have to support them.

Mr. Baker, thank you for inviting us today and we are looking forward to your opening statement and your expertise on this issue.

[The statement of Chairman Filner appears in the Appendix.]


Mr. BAKER.  Thank you, Mr. Chairman.  I am most appreciative of your courtesies and all the effort made to facilitate this hearing, and I also appreciate very much your courtesy in describing my activities on the Committee.  I had thought you would characterize them quite differently, so I am very—I am very appreciative of your kind remarks of my contributions to the Committee's action.

Let me also add my appreciation to those Members who have traveled great distance to be here today.  Mr. Michaud, the Chairman of the Subcommittee on this matter, as well as Mr. Miller from Florida, who was overseas on congressional business and came back for this hearing, to both of you gentlemen, I certainly am appreciative of the difficulty it is in traveling, particularly to get back to the City of New Orleans and curtail your own personal travel arrangements.

And Mr. Jefferson and I, of course, have worked together for many years in the Congress and I have come to great appreciation for his intellect and knowledge on these matters.

I need to make several things very clear about my motivations and intense interest in the subject matter, and I am extremely pleased to see the number of veterans we have here in attendance this morning.

This is about you.  It is about the healthcare to which you are entitled.  It is about the service you have given to this country and your undying devotion to meet your obligations as they were given to you.

I find it inexcusable that two years after Katrina we are now debating how.  It's not a question of what or who's going to build it or where is it going to be located.  These are unacceptable circumstances.

I do not care where this facility is built, and I want to put it on the record because some are running rampant "Baker wants to build this thing in Baton Rouge."  I do not.  What I care about, I care about getting this facility built in as quick a period of time as is humanly practicable understanding the Chairman and Members of this Committee's desire to have the taxpayers' interest protected at all costs.

Now, there are questions I'm going to ask that some people may not want to talk about.  You deserve those answers and taxpayers do as well.  It's my job as a representative of veterans on the Veterans' Affairs Committee in the United States Congress not to leave a stone unturned or a leaf not examined in the course of this progress and I fully intend to do that.  But I want you as veterans to understand what I'm doing is exclusively what I believe to be in your best interest.  There is no other motive.

If we can build it where it's now proposed and get the doors open in 24 months, hey, I'm ready to go.  But if we can't, we owe it to you to tell you why not and what are our options.

And, Mr. Chairman, I just can't express to you enough my appreciation for you and the Committee Members for coming here today to give us the opportunity to hear our expert witnesses talk about this subject matter and hopefully facilitate coming to a conclusion and a decision that's in the best interest of the United States veterans and taxpayers as well.  I yield back my time.

The CHAIRMAN.  Thank you, Mr. Baker. 

As I said, Mr. Jefferson doesn't let me ever go by, pass him in the hall or on the Florida house without him saying let's get that built, let's get that VA facility built.

Mr. Jefferson, thank you for your very aggressive representation of your district. 


Mr. JEFFERSON. Thank you, Mr. Chairman.  I would also like to thank the Members of Congress who traveled here, to welcome them to my district and to our region.

I'd like to thank the Chairman for his attention and commitment to this issue.  He's been unwavering in his support for us and we really appreciate the many times he's called the Committee together formally to talk about this and the time we've talked informally.  I thank Richard Baker for the help and support he's given us over the years and that he continues to give for our recovery.

Mr. Chairman, I'd like to thank you for this opportunity to speak with the Committee today to address the state of our VA system in south Louisiana.  We all appreciate that the VA has committed to a building a new hospital for our veterans and our veterans in the greater New Orleans area.  They deserve nothing less than top notch facilities and treatment, and we are doing all we can to keep our promises to them.

The proposed partnership between the VA and the Louisiana State University (LSU) Medical Center represents what is in the best interest of our veterans, the healthcare profession of the area, and the citizens of south Louisiana.  A combined facility located downtown will enable LSU Medical Center to continue providing its services to the VA, it will lower operating costs for both facilities, and will be a tremendous boost to our local economy and to our recovery from the devastation of 2005.

The VA Center in New Orleans has always been a reasonable facility, one that has drawn from veterans living along the entire Gulf Coast.  While the population of the City of New Orleans itself may be down, most displaced veterans are in the outlying parishes.  It would be a tremendous disservice to them and to other veterans of the region to use such misleading numbers about our people back home to relocate this hospital in some other place.

Both the Louisiana Recovery Authority and the Regional Planning Commission have declared their support for the downtown location of the VA hospital.  Since the downtown hospital has remained closed, the VA has done an admirable job of ensuring that immediate healthcare needs of our veterans are met.  The network of local clinics and quick deportment of mobile clinics have gone a long way to create the capacity to meet outpatient needs; however, if a veteran requires a procedure that can only be performed in a full hospital, he or she must still travel to Houston or Jackson or some other place.  To force the veterans to make long trips at times of sickness is an unacceptable standards for our Nation.  It's imperative that we move quickly to resolve this problem.  Our veterans have waited long enough for this matter to be well on the way toward being solved.

To establish the VA Medical Center as a proposed downtown site is vital to us in our restoration.  Along with Tulane Medical Center, Xavier, and Delgado, the joint facility would become a part of the biomedical corridor that exists in downtown New Orleans.

Prior to the storm, nearly 10,000 jobs were located in the medical district.  The proposed joint VA-LSU center would add another 3,400 jobs to that total.  Construction of the new facility alone is estimated to create an additional 19,000 jobs.  Once the facility begins operations, the capital investment area will soon follow.

In adding in fiscal year 2005 to this hospital's restoration, the National Institutes of Health (NIH) has sent about $130,000 in grants to our area.  We must ensure that this engine of economic recovery continues to be in place and we respect support from NIH and other support to follow it.

From a practical point of view, it simply makes sense to share—for the VA and LSU to share facilities.  By sharing lavatories, housekeeping, rehabilitation, radiological facilities, these costs, these overhead costs are consolidated between these two hospitals.  Money would be saved in the short and long run and efficiencies would be realized.  In so many ways, this is the next logical step to the partnership that already has existed over years past between LSU and the VA hospital.

I deeply support that our local and State authorities are well along the way to having done their part to provide support for the required—for this required endeavor.  We provided a business plan and I think a sound business plan and approved the initial land acquisition funding of $74 million to the Legislature.  We must now follow up these steps with action.

The VA has committed to building a new hospital in the New Orleans area and we are grateful for that, but we must take this opportunity to build for the future and create a state-of-the-art hospital that integrates seamlessly within the established medical downtown district.  Our veterans should not have to wait a day longer while we debate this policy and while this policy remains unsettled.

I, unlike Mr. Baker, have a parochial interest and a parochial stake in this and I want to see the hospital built in the area that it was built in before.  I think that makes the most sense.  We are here, as he said however, to support our veterans in any way that we possibly can; and we appreciate your service and we think now it's time for us to serve you better.

So thank you Mr. Chairman.  I really appreciate this chance to be a part of this Committee this morning.  Thank you. 

The CHAIRMAN.  Thank you, Mr. Jefferson.

Mr. Miller, thank you for coming from your home district and being here with us this morning. 


Mr. MILLER OF FLORIDA. Thank you very much, Mr. Chairman.  I know that many in this room share my concerns about the topic of today's hearing, and I'm grateful that you and this Committee are holding this meeting to exercise our duty of assuring that the actions of the VA are for the benefit of all our Nation's veterans.

As has already been stated here this morning, nearly two years after Hurricane Katrina, there is still not a clear consensus plan on how veterans' healthcare needs will be addressed in this region, and I am troubled by some of those proposals.

The proposal receiving the most attention has cost estimates approaching $1.2 billion, yet there is very little certainty about where the facility is going to be located.  Taxpayers and veterans both can better be served if VA would take a more fiscally responsible approach and situate a facility that won't be subject to a repeat of what happened to the old hospital.

With a declining population of veterans in the area prior to Katrina, a medical center where veterans are actually located would provide a quicker path to delivering healthcare to those in need.  Furthermore, new hospitals are going up all over this country at one third the cost that is being estimated.

Veterans in southeast Louisiana deserve timely access to healthcare just as veterans throughout the rest of the Nation do.  That is never in question.  However, I question the proposed joint venture, and the significant amount of time that has lapsed with very little progress and that makes me question the plan even more.

Putting a replacement facility in a flood prone area looks like no lesson was learned from the past, and putting the replacement facility back in the same area after years of population shifts looks like VA isn't looking clearly towards the future.

I look forward to today's testimony and hopefully constructive ideas on how veterans in this are can receive timely access to healthcare at a cost that best serves the interest of the veteran and the taxpayer.

I yield back.

[The statement of Congressman Miller appears in the Appendix.]

The CHAIRMAN.  Thank you, Mr. Miller.

Mr. Michaud is the Chairman of our Health Subcommittee on this Committee and he's come all the way from Maine for today. 


Mr. MICHAUD. Thank you very much, Mr. Chairman.  And I can assure you that the weather in Maine is much cooler than it is down here today.  I also would like to thank Mr. Baker and Mr. Jefferson for your advocacy for veterans in trying to get this hospital built as soon as possible, but I also, Mr. Chairman, want to express my thanks to you for holding this hearing today.

This is an important issue for veterans of Louisiana and for our VA system.  Veterans in southern Louisiana have waited too long for a decision to be made on the future of healthcare delivery in this area.

VA has an opportunity to be creative and to benefit the community.  The decisions need to be made quickly and wisely and with good, effective use of taxpayers dollars.

We must always remember that our responsibility here is to our veterans.  They deserve to have access to the best possible care and they must be the guiding principal as far as where this facility goes; and hopefully it will be built sooner rather than later.

And with that, I look forward to hearing our witnesses this morning and look forward to having a dialogue on this very important issue for veterans in southern Louisiana.

So once again, Mr. Chairman, thank you very much and I yield back the balance of my time.

The CHAIRMAN.  Thank you, Mr. Michaud.  I thank you.

[The statement of Congressman Michaud appears in the Appendix.]

The CHAIRMAN.  Just to tell you our procedure, we'll have three panels of witnesses.  There will be testimony of the whole panel.  Hopefully they will each limit their oral testimony to five minutes with their full written statement made a part of our record.  The Committee will have a chance to ask questions of the panel after all the testimony and then we'll proceed through the three panels.

Mayor Nagin, welcome.

Mr. NAGIN.   Thank you.

The CHAIRMAN.  I think we all feel we know you as America's mayor watching you for so many weeks on television.  We appreciate your leadership, we appreciate the strong force you were to the city.  I think the test of your leadership came in by the voters.

Mr. NAGIN.   Yeah.  It continues to be tested every day.

The CHAIRMAN.  And I must say, Mayor Nagin, I don't think the Federal Government as a whole has responded in a rapid enough way and in a comprehensive enough way to the terrible tragedy that you had to be part of.  It's our responsibility as a Nation to see New Orleans as a vital dynamic place again and we are going to do whatever we can on this Committee.

Before you came in, I think I mentioned that various Committees of the Congress are going to be here in the next few months to try to make sure that the plan that the President put forward in that evening newscast almost two years ago is actually carried out.  We have not done the job that you and your constituents deserve and we'll continue to work with you and appreciate your leadership, and the floor is yours, sir.



Mr. NAGIN.   Good morning, ladies and gentlemen.  I am C. Ray Nagin, Mayor of the City of New Orleans, one of America's most beloved and culturally distinctive cities, a city that's in full recovery, a city that has spent 23 months putting itself back together, both our infrastructure and our people.

We are a city that is about 64 percent of its pre-Katrina population.  The metropolitan area stands at about 92 to about 93 percent of its pre-Katrina population, but more importantly, some studies that have been done, the remaining residents who are not back in our city, about 70 percent of them are planning to come back into this region.

So we are planning for a full recovery.  We are building much smarter than we were pre-Katrina.  We are building higher and better and we also have the Federal Government, who I thank you for the investments that have been made.

The Corps of Engineers has been doing some pretty significant work investing billions and billions of dollars.  That's an investment that I think is wise.

If you look around the world, other areas that have challenges with floods have been able to protect themselves better.  And if it wasn't for some flaws in the design of the Federally-built levee systems here in New Orleans, we wouldn't be here talking about these critical issues.

So to the Chairman, Congressman Filner, to the Ranking Member and Congressman Buyer, to Congressmen Jefferson, Baker, and all the other Members of this Committee, I'm not going to read my full report, but I do want to highlight a couple of things and you can take a look at the report a little bit later.

This VA hospital is critical to our future.  It's nestled in the middle of a medical—a legislatively creative medical district that encompasses more than 30 public, private, and nonprofit organizations including several colleges and universities, including LSU, Tulane, Xavier, and Delgado.  Several hospitals are involved to medical schools, nursing schools, medical-related offices and businesses, and associated biotech companies.

The presence of the VA hospital in this districts creates critical synergies and leveraging ability that clustering of these medical facilities achieve.  The VA hospital is also critical because of its economic development.  It will be an economic development engine for this entire region.  And I know you talked about the dollars associated with rebuilding this facility, and all that can be achieved if its done in conjunction with LSU.

Recognizing the importance of this development, the City of New Orleans along with a coalition of regional partners have come together and we all are in full support of them.  A unanimous resolution was approved by our regional partners as it relates to this.

In addition, the Louisiana Chapter of the American Legion with more than a thousand delegates in attendance at its annual meeting last month also unanimously supported the rebuilding of the VA hospital in this region.

The city and its partners have the financial means to expeditiously acquire the necessary land, and we are very confident that we can do that within the 18-month designed time frame that the VA has for reconstructing this hospital.

In closing, Mr. Chairman and Members of this Committee, I would like to once again thank you for the opportunity to discuss our plans and hopes for the re-establishment of these very critical healthcare institutions in a post Katrina environment.  We thank you for all of your support.

I want to make sure that you understand that everything we are doing going forward is in full recognition of the learning that we have from Katrina.  We will not have a repeat of that particular episode.  We are building smarter and better in this city and we need the Federal Government's support as it relates to making sure that, as our population comes back, that we have a critical healthcare system in place and VA is a big part of that.  Thank you.

[The statement of Mayor Nagin appears in the Appendix.]

The CHAIRMAN.  Thank you, Mayor Nagin. 

From the Secretary of the Louisiana Department of Health and Hospitals, Dr. Frederick Cerise, accompanied by senior consultant for Phase Two Consulting, Mr. Michael Romano.  Thank you, Mr. Secretary.


Dr. CERISE. Thank you, Mr. Chairman and Members of the Committee.  Thanks for the opportunity to testify today on the future of the veterans' healthcare in south Louisiana, and let me add my thanks to those of the Committee and the veterans here today for their service to our country.

I'm Fred Cerise, Secretary of the Louisiana Department of Health and Hospitals, a Louisiana State agency for healthcare in Louisiana.

Louisiana and the Department of Veterans Affairs have had a successful relationship for many years as demonstrated by collaboration among the VA, Tulane University and Louisiana State University.

Further, the LSU Sciences Center Health Care Services Division, which operates the system of public hospitals and clinics in Louisiana, and the VA have similar missions to provide primary and specialty care and other related medical services to their populations.

The two systems have much in common: Both are public healthcare systems, both provide a high volume of outpatient care, and both have healthcare practices that include management for individuals with chronic diseases.  Additionally, physicians from Tulane and LSU regularly rotate between the two systems.

After Hurricane Katrina, Louisiana Health Care Redesign Collaborative was created through a legislative resolution to respond to healthcare issues in the New Orleans region.  The backbone of the redesigned system of care put forward by that collaborative is the "medical home" along with—consistent with recommendations for improved systems of care put forth by a number of professional societies.  This model is very similar to the VA's current operation.

Louisiana is moving forward with its redesign work in the area of healthcare.  In the recent legislative session, funding was allocated to pilot the medical home system of care, health information technology, and quality initiatives.

The VA had been recognized for its work for a number of years.  In July of 2007, Business Week magazine called the VA healthcare the best medical care in the U.S.  In 2004, an article in the American Journal of Managed Care stated that, "today, the VA is recognized for leadership in clinical informatics and performance improvement, cares for more patients with proportionally fewer resources, and sets national benchmarks in patient satisfaction."

The VA also provides an avenue for healthcare research.  In New Orleans alone, the VA has 29 active research projects and is home to the Mental Illness Research, Education and Clinical Center.

Given the similar mission and goals between the State and the VA, a joint partnership between the two entities makes sense.  What's been proposed is to move from three separate patient facilities that existed in New Orleans prior to Katrina to a single shared VA-LSU inpatient facility with a more dispersed network of clinics.  Sharing of common physical plant requirements, certain high-end clinical services will create hundreds of billions of dollars in operating efficiently for our taxpayers and improved health benefits for all those who have served.

The State's commitment to this partnership has been unwavering.  On February 23rd, 2006, Governor Blanco was present as Jonathan Perlin, the VA Secretary at the time, and LSU President Lee Jenkins signed an LOU allowing LSU and the VA to enter into negotiations to jointly plan and build a shared hospital in New Orleans.  Extensive detailed planning ensued.

But in a particular area, the U.S. Department of Housing and Urban Development (HUD) approval for spending Community Development Block Grant (CDBG) dollars may delay the rebuilding.  Governor Blanco proposed self financing the State's share to ensure that the State can continue to meet the extra high costs.  The funding was approved by the State legislative.

Governor Blanco recently signed Act 203 which allocates an initial $74 million for land acquisition, acquisition of land.  The Legislature also will provide the $226 million down payment for the new academic medical center in downtown New Orleans to replace the old Charity Hospital, and the remainder of the project will be financed through general revenue bonds.

In addition to these investments, the State's also committed $38 million to a cancer research institute which will be established in downtown New Orleans.  The presence of the existing LSU and Tulane Health Sciences Center combined with the VA and the new cancer center will create a medical district that not only will provide state-of-the-art healthcare to our citizens but also will drive economic development in New Orleans.

There is widespread support for this endeavor including the Regional Planning Commission for Jefferson, Orleans, Plaquemines, St. Bernard, and St. Tammany Parishes, the Downtown Development District of New Orleans, the Unified New Orleans Plan, the Louisiana Recovery Plan and the Louisiana State Legislature.

Hurricane Katrina was a tragedy for the New Orleans region and for our country.  Together, we have the opportunity to create something new and innovative in the wake of this terrible disaster.

A shared inpatient facility with a dispersed network of clinics organized to better serve our citizens is not a simple rebuilding of our old systems but a creation of a new model that makes sense for those receiving care and responds with clinical and financial accountability to the taxpayers supporting this care.

I urge you to recognize the opportunity to do something truly innovative for our citizens in supporting this endeavor.

Thank you for the opportunity to testify this morning.

[The statement of Dr. Cerise appears in the Appendix.]

The CHAIRMAN.   Mr. Romano, you have a statement or—

Mr. ROMANO. No, sir.

The CHAIRMAN.  Thank you very much.

Dr. Michael Kaiser is the Acting Chief Medical Officer of the LSU Health Care Services Divisions.  We welcome you and thank you for your collaboration with VA in the past and look forward to it in the future.


Dr. KAISER. Thank you.  Good morning, Mr. Chairman and Members of the Committee.  My name is Michael Kaiser.  I'm a pediatrician and Acting Chief Medical Officer of the LSU Health Care Services Division which consists of seven acute care hospitals and extensive outpatient clinics operated by the State of Louisiana.  These include our rebuilt LSU Interim Hospital campus in New Orleans, which was effectively destroyed by Hurricane Katrina.

Similar to other local public hospitals across the country, this facility functioned as the core of the safety net for the uninsured and was the predominant site for the clinical training of physicians and other healthcare professionals.

The now-closed Charity Hospital sits across the street from the VA Hospital, which also suffered catastrophic damage in the storm.  Following Katrina, nothing has occupied our time and attention more fully than the restoration of a public hospital and its clinics to serve the people of this region and the future healthcare professionals who train there.

Of necessity, LSU has focused on both the present and the future.  In the nearly two years since Katrina, we have moved from emergency facilitates in tents to the opening of a small, interim hospital and a growing number of primary and specialty care clinics in several locations.  Our capacity is not yet up to the level of need in the region, particularly in the availability of psychiatric services, some medical specialties and dispersed primary care clinics, but we have made significant progress.  Other major additional steps will be taken in the months ahead.

As we continue to work—as we continue work to address the immediate and critical needs of our community, LSU has kept a steady focus on the longer term.  The region desperately needs not only additional healthcare resources but also ways to develop and deploy those assets through a better and more efficient system than was possible before the storm.

LSU has long worked toward fundamental improvements in its delivery system, such as through its award-winning disease management program, but the convergence of the need to rebuild and the heightened support today for both a reformed delivery model for care to the uninsured and for the financial and reimbursement reform necessary to make that new model possible present realistic opportunities for our long-term agenda for change.

The potential collaboration between the VA and Louisiana's State public hospital system is one propelled by unintended opportunity, but it is a core part of our strategic vision.  We have a chance to jointly design and cooperatively operate a new facility that meets the needs of both institutions and the patients they serve while at the same time achieving significantly enhanced efficiency, cost savings and quality healthcare.

The proposed collaboration is a logical step for reasons that extend beyond the destruction of Katrina.  The adjacent VA and Louisiana-operated public hospitals have a long history of working together.  Prior to the storm, the New Orleans VA purchased over $3 million of clinical and other services from LSU.  Many physicians worked at both the VA and the Medical Center of Louisiana at New Orleans facilities and many medical residents, both from LSU and Tulane, rotated to both hospitals.

For the past 18 months, I have chaired the planning efforts with the VA.  First, the Collaborative Opportunities Study Group, co-chaired with Mr. Michael Moreland, Director of the VA Hospital in Pittsburgh, looked at the possibility of a feasibility of building together and sharing services.  Once proved feasible, the Collaborative Opportunities Planning Group (COPG), co-chaired with Mr. Ed Tucker, Director of the DeBakey VA Hospital, has been studying what services should be shared and the details of building together.  The COPG continues to meet weekly in order to present a final report to the Secretary by the end of September 2007.

The creation of a VA-LSU campus in downtown New Orleans will create benefits for both partners that exceed what either can accomplish separately in different locations.  We have a rare opportunity to develop a whole that is greater than the sum of its parts.  There are enormous benefits to the community of a downtown medical complex.  It is a synergy created by working together that will enhance the services available to all our patients.

The Louisiana Legislature in its just completed 2007 Regular Session approved outlaying of $1.2 million for the new academic medical center which matches the cost estimate for the facility contained in the business plan completed by the Adams Group, a national hospital consulting firm, and overwhelmingly approved by both houses of the Louisiana Legislature.

The construction of the new academic medical center is being managed by the Office of Facilities Planning and Control which is an agency within the executive branch of Louisiana government.  Acquisition of land identified for the new medical center and the VA facility is already underway with contracts having been issued to complete title and appraisal work.  Once the VA firmly commits to building of the downtown site, the City of New Orleans and the State of Louisiana are prepared to immediately proceed with land acquisition for the VA.

From this point forward and given the preparation of both partners, the process of building a new hospital complex together can proceed as quickly as choosing to build separately.  Significant groundwork has been laid for long-term mutually beneficial collaboration and we are poised to see it through to completion.

Thank you for your interest and for the opportunity to share LSU's perspective on these critical matters.  Far from being an obstacle to healthcare reform as some have feared, the creation of a revitalized academic medical center complex in the city will be a catalyst for that reform.  Particularly if LSU and the VA work together, it will also sustain a reformed system in the long run by supporting a viable, mission-driven system dedicated to improved access, the highest quality medical care and innovative healthcare education in a rebuilt community.

[The statement of Dr. Kaiser appears in the Appendix.]

The CHAIRMAN.  Thank you, Dr. Kaiser.

I think, for the record, you meant $1.2 billion with the same Legislature.  I heard million, but I assume you meant billion.

Dr. KAISER. I sure did.

The CHAIRMAN.  I thought we were getting away cheap. 

Dr. Alan Miller is the Interim Senior Vice President for Health Sciences at Tulane University.  Welcome, Dr. Miller.  I just would say that your testimony would have been far more compelling had you included San Diego as a bioscience giant.

Dr. MILLER. I have to talk to my consultants.


Dr. MILLER.  Mr. Chairman and Members of the Committee, thank you for the opportunity to speak to you about the importance of fully restoring accessible healthcare to our region's veterans and about Tulane's historic and present role.

Almost 23 months have passed since Hurricane Katrina.  We have seen enormous progress in some areas; in other areas progress has come at a distressingly slow pace.  Our primary focus now is the timely re-establishment of the highest quality care for our veterans.

The VA has been a valued Tulane partner for nearly 40 years and during that time our faculty, residents, and medical students have worked side by side with the VA providing patient care, educating future physicians, and performing cutting edge medical research.

I'd like to focus my comments on three areas:  Provision of care before Katrina, the VA's and Tulane's roles in re-establishing medical care post Katrina, and the importance of the VA in medical research and the future of biosciences.

Prior to Katrina, Tulane provided approximately 70 percent of the patient care at the VA with more than 75 faculty serving joint appointments.  Well-educated and trained physicians are essential in assuring access to quality healthcare.

Tulane's mission of healthcare medical education, and research is intimately intertwined with that of the VA.

Before August 2005, the VA Medical Center provided training for approximately 140 residents.  120 of them were from Tulane.

The VA's integration with the health science centers at Tulane and LSU provided a critical synergy that was a key strength in the region's overall healthcare and a vibrant environment for bioscience research.

The VA's swift response after Katrina allowed for a successful and safe evacuation of hundreds of patients and employees.  Tulane faculty, residents, and staff were integral to the evacuation and in re-establishing a presence in the community immediately following the storm.

The VA's outpatient clinics have reopened and visits are up to 75 percent of its pre-storm.  Through its partnership with Tulane, the VA is now providing new patient care at Tulane University Hospital and Clinic as it strives to keep up with the rapidly expanding population.  Over 40 Tulane physicians and 26 residents are currently providing services and training at various VA locations in the area.  Tulane is actively recruiting new physicians to accommodate the increasing need in the area, many specifically to support the VA's clinical mission.

As we look down the road, 5, 10, 20 years or longer, it's clear that the VA will be a cornerstone for healthcare, research and the biosciences industry in our region.  Over 8,000 people are currently employed in bioscience and healthcare related fields.  Although New Orleans ranks behind bioscience giants like San Francisco, Boston, San Diego, and the Research Triangle, we outrank other up-and-coming centers including Nashville, Birmingham, and Louisville.

In fiscal year 2005, New Orleans accounted for more than $130 million in NIH awards representing 82 percent of all NIH funding in the gulf coast region.  That includes New Orleans, the Mississippi and Alabama coasts, and the Florida panhandle.  Tulane itself accounted for 46 percent of all NIH awards in that region.

Prior to Katrina, the New Orleans bioscience district was actively building a framework for entrepreneurial success.  Key pieces included critical Tulane, LSU, State of Louisiana partnerships.  Construction will begin this fall in the downtown bioscience district on an $86 million cancer research facility and a $60 million BioInnovation Center.

The synergy generated by those projects and collaborations, each within a few blocks of each other, will create a rich, dynamic teaching and research environment that will rival any in the country.  A strong VA Medical Center is a crucial component of this burgeoning bioscience hub.  It is hard to imagine the district without the VA and the VA being built anywhere but in the district.

I want to thank each of you and your colleagues in Congress for demonstrating a strong commitment to the region's veterans by appropriating more than $600 million for a new state-of-the-art VA Medical Center.  The State too has now done its part in providing funding for a public hospital to be built in tandem with the VA.  This leverages the Federal investment providing substantial cost savings and demonstrating good stewardship of taxpayer dollars.  In addition, the investments by the city, State, and other institutions in the emerging bioscience district provide unique opportunities to create a vibrant and inter-reliant collaboration.

It is our hope that the VA and the City of New Orleans move quickly to begin the process of land acquisition, planning and construction so that we may re-establish the full spectrum of care for our veteran population.

Once again, I thank you for allowing me to speak to Members of this Committee.  With your help, we will continue to bring back healthcare in our city and region not just back to where it was but to an even better future.

[The statement of Dr. Miller appears in the Appendix.]

The CHAIRMAN.  Thank you, and I thank all of you for your commitment to the healthcare of this area.  I'm going to just ask one question of you before my colleagues, if I can, in order to give you a chance to go further than your statement.

Virtually everybody who has testified in written testimony thinks that the hospital should be relocated where it is, where it was.  I'm sure you heard Congressman Miller, who will have his very penetrating questions in a few minutes, but he represents a train of thought in the Congress that says why put it right back where it was.

You said we are building smarter, better.  Can you just give us the arguments that we need, as a Congress, to make sure that we can answer those questions?

Mr. NAGIN.   Well, the best way I can explain this is, when Katrina hit us, the storm surge overwhelmed the levees because they were poorly designed.  All of those design flaws, as best I can determine being a nonengineer, have been corrected and there have been other enhancements that have been put in place to make sure that if another Katrina came this way we wouldn't have the catastrophic flooding that we've had during Katrina.  That's the first point.

The second point is that every citizen that is getting a building permit and every business that is asking for a building permit post-Katrina, if they had at least 51 percent damage, they have to elevate their foundations to take into account the new Federal Emergency Management Agency (FEMA) flood plain maps that are in place.

So that's probably the biggest arguments that I will make; and then we've had several teams from around the world, the Netherlands, and to look at exactly what's happening in other parts of the world that are even more vulnerable from a standpoint that they are even further below sea level than we are and their techniques and engineering that can ensure that New Orleans and this region is safe going forward.

The CHAIRMAN.   Thank you, Mayor.  I just wanted you to get ready for the—

Mr. NAGIN.   Oh, I understand.

The CHAIRMAN.  For the questions that Mr. Miller is going to have.

Mr. NAGIN.   Where is Mr. Miller from? 

The CHAIRMAN.  Florida.

Mr. NAGIN.   Florida.  Okay.  Good.  Let's talk.

The CHAIRMAN.  All right.  Mr. Baker, you have the floor, and I look forward to your questions.

Mr. BAKER.  Thank you, Mr. Chairman.

Dr. Cerise, I'd like to just start with the questionnaire that was forwarded to the Governor by Secretary Jackson sometime back which outlined about two pages of questions which were pertinent to the financial capability of the State to engage in this project.

I did not speak to the Governor about the report and response.  These are press attributions only, so I say that in this context.  It appeared that the response was we are just going to go ahead on our own.  I was not clear as to what we are going to go ahead on our own really means.  Does that mean the LSU-Charity replacement facility will be constructed with total State dollars and that they would move ahead in that fashion or can you clarify for me what that intent was in response to the question?

Dr. CERISE. I think the—the Governor's concern was that, as we are hearing today, the concern over the claim for getting this project accomplished, so a great desire to make this partnership work because—

Mr. BAKER.  Let me interject there.  The time would be extended by entering the questionnaire?  I'm trying to get to the reason for not responding and then saying we are going to go ahead on our own any way.

Dr. CERISE. I think the—in fact, I know the responses have been drafted and the Governor will respond to that questionnaire; however, there is a concern.

We have been in conversation, or the State, not me personally, been in conversation with HUD on these Community Development Block Grant dollars and the ability to commit those dollars to this project and that process has proved to be a prolonged process.

And so what the Governor was saying is look, I don't want this prolonged process to have a negative effect on the state and the VA discussions so that this hospital formation can go forward; and so I'm committed and the Legislature approved that the ability of the State to go this without the HUD dollars, not ignoring the HUD questions, not—because she fully feels and we fully feel we can answer those questions adequately and, as I said, they are drafted and put forward, but the State cannot afford—we don't know how long that would play out, this discussion with HUD.

And so for that purpose, she opted to make a commitment from the State for the funds for the academic medical center because there's broad support for this academic medical center.

Mr. BAKER.  Let's stop there for a moment.  That's presuming there is a definitive decision by someone that the VA facility will be built as a collaborative because, otherwise, you are going to construct two State facilities with State money while waiting on the VA-State relationship to be ironed out or the CDBG money to be ironed out.

Isn't that somewhat of a risk that you would invest State dollars in—up front unless you have absolute assurances the funding stream will be available to you at a date certain?

Dr. CERISE. Sir, when you say two State facilities with State dollars—

Mr. BAKER.  The LSU-VA hospital facility and the replacement, whatever it may be called, for the Charity system, that are to be on the collaborative campus with the VA facility which you are now saying you are going to go ahead without.

Dr. CERISE. What the Governor is committing to is a single replacement facility hopefully in conjunction with the VA because we think it makes great sense long-term; but if not in conjunction with the VA—

Mr. BAKER.  Well, that gets me back to my point.  How do you design that collaborative facility without a collaborator?

Dr. CERISE. The collaborative work is ongoing right now.  What she was trying to answer is a concern that the State was going to—was moving too slowly to keep up with the VA's time frame.

Mr. BAKER.  Okay.  I'll give up and let me go to time frame.

As originally reported by the collaborative group, there was a study, a report that was issued in which the time line for commencing architectural services was in mid 2006.  That time line carried on for an operational opening of end of 2011, 2012, basically a six-year clock.

As I view it now, we—we don't now have an architectural firm appointed for the three collaborative interests because we don't have a collaboration.

I would assume that with the announcement by the VA that the original site of some 30 plus acres is now insufficient and additional acreage will have to be acquired and that that would push back that time line of a commencement date to at least, let's say, the beginning of 2008.

Is that an unreasonable assumption based on where we were today in the uncertainties of funding?

Dr. CERISE. I'm going to ask Dr. Kaiser, who has been working on that collaborative who has more detailed knowledge to address that.

Dr. KAISER.   Mr. Baker, both the Department of Veterans Affairs and the State of Louisiana have selected architects.  They have not been announced just because of your questions exactly, so it's unclear if we're building collaboratively with the VA or if we are building separately.

As soon as the Department of Veterans Affairs makes their decision about the location, then the architects have been selected, could be announced, and could go to work.

Mr. BAKER.  So we could assume if everything went swimmingly that by September we could have architects at work designing a facility?

Dr. KAISER. Yes, sir.

Mr. BAKER.  Okay.  Well, that would mean we would then be 2012, 2013.  I think this is the point that has not been made clearly to the veterans.

Some have assumed that if we don't take the deal as it's outlined, where it's proposed, in the terms in which it's proposed that they are going to be without healthcare.  Even if you take it the way it's been prescribed, you are without healthcare for the next six to seven years any way.  Now, is that an acceptable time window?

I look up, drive up and down the interstate between Baton Rouge and New Orleans and see hospitals and healthcare facilities being built all the time in two or three years or less.  I have not yet had an adequate explanation from HUD, the VA, or anybody else why this process is so doggedly long.

There are extraordinary uncertainties about how we are going to go forward.  And I again make the point to veterans:  If you are worried about healthcare, the collaboration makes it extraordinarily more complicated to get the facility opened and operational for your purposes.

And my question will be of a lot of the veterans who are here today:  How long is long enough?  Is it five years; is it six years; is it seven years?  When does it get to be too long?  I think it's too long right now, but let me move on.

Mr. Chairman, my time has long since expired.  I am more than willing to yield to other Members and come back for additional rounds, but I'm at your direction, sir.

The CHAIRMAN.  We will come back to you, Mr. Baker.  Mr. Jefferson?

Mr. JEFFERSON. Thank you, Mr. Chairman.  I really have lots of questions to be answered that cannot be answered by you at the table.

I think you tried to make the point and I want to ask, maybe help you make the point that our State has done all that it can, that it has been asked to do any way, to position itself in the event this collaborative is struck, this agreement is struck between LSU, Tulane, and the VA.  Is that not what you have been discussing with us this morning?

Dr. CERISE. That's correct.

Mr. JEFFERSON. And the criticism that was coming forth from some Members of Congress was that the State had not itself made a sufficient commitment and that it would not make a sufficient commitment to be a good partner; and this has been cleared up, has it not.

Dr. CERISE. That's correct.

Mr. JEFFERSON. One of the questions for a detailed budget, a detailed plan, has that been delivered through the legislative process and through administrative action.

Dr. CERISE. The Legislature has made the commitment of three issues:  The $74 million for land acquisition and planning, $225 million or $226 million, which is the balance of the down payment for the State's portion of this, essentially making the State commitment to build the State's share of this center in New Orleans.  And so the commitment to acquire the land and to build the State facility there in conjunction with the VA.

Mr. JEFFERSON. I want to make it clear.  It won't be the State's responsibility to build this facility all by itself, and there has to be some planning, some cooperation here.  But the deadline, the time line for building it—

When I went to a meeting in Mr. Filner's office and the Members of the Committee and othe