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American Federation of Government Employees

American Federation of Government Employees


The American Federation of Government Employees, AFL-CIO, which represents more than 600,000 federal employees who serve the American people across the nation and around the world, including roughly 150,000 employees in the Department of Veterans Affairs (VA), is honored to submit a statement regarding the VA’s Fiscal Year (FY) 2008 budget for the Veterans Health Administration (VHA).

AFGE commends Chairman Michaud for his unwavering commitment to secure adequate funds to treat the physical and mental health needs of our veterans, and his support for assured funding legislation. AFGE agrees that it is time to give veterans more predictability through an assured funding process for VA health care.  The evidence of a broken discretionary funding process is overwhelming: a $3 billion shortfall two years ago, widespread hiring freezes and hospitals operating in the red last year, while this year, the VA is operating on its twelfth continuing resolution in thirteen years.

AFGE members working in VA hospitals and clinics see first hand both the costs of war and the costs of a discretionary VA funding formula. They take tremendous pride in being part of the best health care system in this country. At the same time, they express growing anxiety, sometimes bordering on desperation over the lack of resources and staffing they need to do their jobs.


Adequate funding goes hand in hand with adequate oversight. Congress and the public must be able to determine whether these precious dollars are being spent cost effectively and in the best interests of veterans. Unfortunately, there is far too little transparency in VA spending at the present time, as recent Government Accountability Office (GAO) studies have shown.  First, GAO found that the VA fails to track health care dollars used for illegal cost comparison studies.  More recently, it concluded that the VA does a poor job of budget forecasting. Thus, it is no surprise that in the first quarter of FY 2006, VHA treated nearly 34,000 more returning OIF and OEF veterans than it had predicted it would treat for the entire year. Its mental health track record is no better: last year, GAO found that millions of dollars budgeted for mental health strategic initiatives had not been spent.  

Stronger oversight and reporting requirements for VA spending are greatly needed.  For example:

  • The quarterly reports provided by the VA pursuant to new requirements in the 2006 VA appropriations law do not appear to provide much of a vehicle for oversight.  AFGE members continue to report “borrowing” between medical accounts. Along these lines, the proposed budget does not adequately explain why 5,689 food service jobs suddenly fit better in Medical Services than Medical Facilities.
  • Despite clear reporting requirements in federal law (38 USC § 305), it appears that the VA has suffered no consequences for repeatedly filing incomplete reports on contracting out by medical facilities

More transparency is needed in other critical VHA areas to improve forecasting of future need and ensure the best use of precious health care dollars. For example:

  • VISN budgets: it is very difficult to determine how much VHA spends on FTEs that do not provide direct patient care.  We are especially concerned about the enormous growth in VISN budgets. One of the original goals of the VISN reorganization was to reduce the need for management positions, and each VISN was expected to have 8 to10 FTEs. Yet currently, total VISN employment is nearly three times that amount (638 FTEs).  Seven of the 23 VISNS have 30 or more employees.  
  • Bonuses: AFGE is very concerned about the diversion of precious patient care dollars to excessive management bonuses.
  • Patient capacity: AFGE encourages the Subcommittee to conduct oversight of VHA practices for determining patient waiting lists and bed capacity. AFGE is concerned that waiting list statistics are often presented in ways that understate the actual delays that veterans are experiencing.  Second, it is a common practice to keep a hospital unit officially open even though there are no available beds. 


As a proud and longtime supporter of the Independent Budget (IB), AFGE’s overall concern with the President’s budget proposal is that the proposed funding levels for VHA fall short of the IB’s recommendations, which forecasts veterans’ needs using sound, systematic methodology.   We also concur with the IB’s recommendation to restore eligibility to Category 8 veterans. AFGE rejects doubling of co-pays, new user fees or any other policies that shift costs to moderate income veterans and shrink deficits by pushing veterans away. 

Despite the Administration’s contentions, this proposed budget is not gimmick- free.  Even though drug co-pays and user fees are not part of this year’s medical care budget, the Administration acknowledges that these dollars could affect its 2009 appropriations request.  Another familiar gimmick is to follow a strong first year budget with a decrease in funding over the next four years; According to the Center on Budget and Policy Priorities, veterans’ health care would undergo large cuts between 2008 and 2012.

Fee basis care: One of the most harmful byproducts of underfunding is excessive reliance on contract care.  Federal law and good policy dictate that fee basis care should be provided to veterans in limited circumstances, for example, to increase rural access when other means are not available. AFGE is concerned that the proposed FY 2008 budget continues a dangerous trend toward increased reliance on fee basis care, in lieu of hiring more VA medical professionals and timely construction of new hospitals and clinics.  The number of outpatient medical fee basis visits estimated for FY 2008 represents a 27% increase in three years. Veterans deserve a better explanation of VA’s growing reliance on fee basis care, in the face of constant accolades in the medical community about the quality of VA health care. AFGE also has concerns about the potential of VA’s newest fee basis initiative, Project HERO, to waste scarce medical dollars by increased use of contract care.  

Long term care:  The Administration has once again failed to propose adequate funding for institutional long term care. There are insufficient resources in the community to shift large numbers of aging and disabled veterans to noninstitutional care. Some veterans must remain in institutional care and need beds that are currently in short supply. In addition, AFGE questions estimates in the proposed budget that predict declines in operating levels for rehabilitative, psychiatric, nursing home and domiciliary care.   


The following examples illustrate how underfunding and financial uncertainly adversely impact the delivery of health care to veterans:


  • PAY: Budget-driven pay policies hurt nurses and veterans alike. Despite widely recognized problems with recruitment and retention, RNs in every VISN report problems with the locality pay process established by 2000 nurse legislation.  Managers regularly contend that they lack the funds to provide nurse locality pay increases even after conducting pay surveys.
  • STAFFING: Poor pay policies directly impact staffing levels, which in turn hurt patient care and patient safety in many ways, for example, not having time to check orders or do blood drawers or IV placements promptly. Staffing shortages in the hospital supply department further impede the RN’s ability to access oxygen tubes and other life-saving equipment in emergency situations.  RNs in a VISN 23 facility report that their polytrauma unit is short-staffed, requiring nurses to give less time to each veteran and forcing them to limit the number of veterans admitted to this state-of-the-art new treatment facility.  A facility in VISN 16 was recently forced to place geropsychiatric patients in a more costly medical unit with one on one nursing care because of a loss of psychiatric ward beds. 
  • CONTRACT NURSES: Turning to contract nurses as a stopgap solution wastes scarce dollars and impacts quality. A facility in VISN 9 is about to spend more than a half million VA health care dollars on contract nurses because of difficulties in recruiting and retaining in-house staff (at a lower cost) and too few staff in the personnel department to bring in new hires.
  • FLOATING: Another frequently used stopgap solution that hurts patient care and lowers nurse morale is rotation of nurses between units because of short staffing.  Nurses are then forced to work in areas where they feel less competent.
  • MANDATORY OVERTIME: Despite provisions in 2004 legislation to reduce mandatory nurse overtime, hospitals continue to rely on mandatory overtime to address staffing shortages.
  • PATIENT SAFETY EQUIPMENT: AFGE urges this Subcommittee to ensure that all VA hospitals have the funds to purchase patient lifting equipment that reduces the incidence of nurse back injuries and patient skin tears.

Physicians and dentists:

In every VISN, physicians and dentists report difficulty getting adequate market pay increases and performance pay awards, despite clear language in 2004 physicians pay legislation.  Facility directors have contended that they lack the funds to increase pay and give awards, even before they convened any panels to set market pay or conducted evaluations of individual physician performance. Management also cries “budget” in refusing to reimburse physicians for continuing medical education, again despite clear language in Title 38 entitling full-time physicians to up to $1000 per year.

On call physicians are routinely scheduled for weekend rounds and are not provided any compensation time for weekend work. Primary care panel sizes are at maximum levels regardless of the complexity of various cases. Physicians with heavy workloads must also cover large patient loads of other doctors on leave as there are no additional physicians available.

The results of these ill-advised policies are widespread shortages of specialty physicians throughout the VA, and shorthanded primary care clinics with enormous patient caseloads.  In turn, these shortages require increased reliance of costly fee basis care by non-VA providers.

Delays in diagnostic testing:  Short staffing causes significant delays in medical testing. According to a recent report from a VISN 20 facility, veterans face significant delays in obtaining sleep studies because the sleep clinic lacks adequate staff to review the results. As a result, it takes five to six months to get reports read (over double the wait time a year ago.) The facility is also experiencing extensive delays in getting the results of bone density studies because the Imaging Department has only one part-time employee to read the scans.

Mental Health: Due to a chronic shortage of psychiatrists in many facilities, new veterans entering the VA health care system must wait several months to see a psychiatrist.  While there has been an increase in hiring of new social workers, the level is still below that of ten years ago.  Heavier caseloads prevent social workers from spending more time with patients and providing other support such as visiting patients at homeless shelters. 


AFGE greatly appreciates the opportunity to submit our views and recommendations to the Subcommittee on Health.  We look forward to working with Chairman Michaud and other members of the Subcommittee to ensure that the VA budget adequately meets the health care needs of our veterans in FY 2008 and beyond.  We believe assured funding, increased oversight and carefully measured use of contract care are essential to meeting that goal.