House Armed Services Committee, Subcommittee on Military Personnel: Hearing on Military Health Care System

Courtesy CQ Transcripts Wire
Tuesday, March 27, 2007;

SPEAKERS:

REP. VIC SNYDER, D-ARK. CHAIRMAN
REP. MARTIN T. MEEHAN, D-MASS.
REP. LORETTA SANCHEZ, D-CALIF.
REP. SUSAN A. DAVIS, D-CALIF.
REP. NANCY BOYDA, D-KS.
REP. PATRICK MURPHY, D-PA.
REP. CAROL SHEA-PORTER, D-N.H.
REP. IKE SKELTON, D-MO. EX OFFICIO
REP. JOHN M. MCHUGH, R-N.Y. RANKING MEMBER
REP. JOHN KLINE, R-MINN.
REP. THELMA DRAKE, R-VA.
REP. WALTER B. JONES, R-N.C.
REP. JOE WILSON, R-S.C.
REP. DUNCAN HUNTER, R-CALIF. EX OFFICIO

WITNESSES:

MAJOR GENERAL GALE POLLOCK, ACTING ARMY SURGEON GENERAL
VICE ADMIRAL DONALD ARTHUR, NAVY SURGEON GENERAL
LIEUTENANT GENERAL JAMES ROUDEBUSH, AIR FORCE SURGEON GENERAL
DAVID MCINTYRE, PRESIDENT AND CEO, TRIWEST HEALTH ALLIANCE
DAVID BAKER, PRESIDENT AND CEO, HUMANA MILITARY HEALTHCARE SERVICES
STEVE TOUGH, PRESIDENT, HEALTH NET FEDERAL SERVICES

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SNYDER: The hearing will come to order. I want to welcome our guests today and folks attending. We obviously have Major General Pollock, the acting surgeon general of the Army, Vice Admiral Arthur, surgeon general of the Navy, and Lieutenant General -- I need you to pronounce your last name for me.

ROUDEBUSH: Yes, sir, Roudebush.

SNYDER: Roudebush. I thought that's what it was.

ROUDEBUSH: Yes, sir.

SNYDER: But you and I had been friends long enough, I thought I didn't want to mess it up here.

ROUDEBUSH: Thank you, sir.

SNYDER: Lieutenant General Roudebush, surgeon general of the Air Force. We appreciate you all being here. This is General Pollock's first appearance before this committee in this role.

And we appreciate you being here today, General. And this may be Admiral Arthur's last time, although the focal (ph) committee not long ago bid goodbye to General Schoomaker, and he returned, like, two weeks later. So this may be your last time here. We certainly appreciate your years of service to your country and to the Navy.

And, of course, we can't discuss the current state of the military health care system without acknowledging the events of the last few weeks, the stories that have come. The reports out of Walter Reed showed our failure to properly care for all of our wounded warriors in the way that we all want. And when I say our, it's a joint problem for this country. It's all of our issue and all of our responsibility.

In order to have an open and honest dialogue, we need to understand both the challenges the system faces and the solutions the Department of Defense and the services have proposed. Our military medics face growing requirements as far into the future as we can see. They will continue to support operations in Iraq, Afghanistan, and the global war on terror. They will also need to support the expansion of the Army and Marine Corps.

While they are doing all of these things, however, the military medical departments are being required to cut costs. They are being tasked to find, quote, "efficiencies," unquote, in the system to the tune of $248 million in fiscal year '08. They are further required to convert military medical positions to civilian ones, frequently reducing the overall number of medical professionals in the process.

We have no doubt that our dedicated military personnel will devote all of their efforts to accomplish their assigned missions. But there is concern that they are not being given the resources they need, not want, but need to fully support our nation's military forces.

And we appreciate you being here. You are the first of two panels today.

I also want to introduce David Kildee, who this is his first time in this staff position sitting here.

And please prepare to fire off red flares, Mr. McHugh, if you and I get in trouble and he doesn't know what to do. So Jeanette will come racing over here to...

MCHUGH (?): I hope you've got a lot of them.

SNYDER: A lot of them.

And with that, I'd like to yield to Mr. McHugh for any comments he would like to make.

MCHUGH: Thank you, Mr. Chairman. And I would ask my entire statement be entered into the record in its entirety.

SNYDER: Without objection.

MCHUGH: I certainly want to add my words of welcome to our distinguished guests.

I think, Mr. Chairman, you said an appropriate potential farewell to the good admiral. But whether it is his last or not, I will certainly add to your comments about our deep appreciation for all that he's done and a word of (inaudible) welcome to General Pollock, who not only joins us in her first hearing as the new surgeon general for the United States Army, but also comes, I am told, by Jeanette James, who was the general's successor as the MEDAC (ph) medical commander up at Fort Drum for the 10th Mountain Division, she is also the first nurse to work her way and earn her way into this esteemed position.

Although, General, very challenging times, we certainly congratulate you on your appointment and look forward to your progress and cooperation and participation in this partnership, as the chairman said, in the days ahead.

Mr. Chairman, I would echo as well your comments about the broad range of challenges we face. You mentioned efficiency wedges, a fine phrase, if you will, for cuts. And it's really just the proverbial tip of the iceberg. If you look at the expected or anticipated savings placed against other costs in the medical system, we're looking at over $2 billion in efficiency wedges and cuts and savings that all mean we've got a great uphill battle to meet the demands of the budget.

Civilian conversions from military positions -- there's funds for an additional 2,700 plus positions for conversion at a time when we've already converted over 5,500. And I think it's appropriate we begin to wonder what affect this is going to have on our ability to continue to provide a robust military health system carry out its mission. And certainly given our witnesses' expertise in their medical professions, we look forward to their perspective on those kinds of things.

And lastly, Mr. Chairman, you're absolutely right. We need to focus all of our abilities and resources on Walter Reed and the larger medical hold, medical holdover system in the medical care system for all of our wounded warriors. None of us, no American, wants to see these brave heroes who have given all of us so much to get anything less than the quality care that we expect them to be treated with.

So with that, we look forward to the panels here today. And, Mr. Chairman, I'd yield back.

SNYDER: Thank you, Mr. McHugh.

What we will do, I'm going to have David put the five-minute clock on. But that's just to give you an idea where you're at. When you see that red light go on, if you've still got more things that you think we need to know, you go ahead and continue.

We'll begin with General Pollock and then go to Admiral Arthur and then to General Roudebush.

So, General Pollock, the floor is yours.

POLLOCK: Mr. Chairman, Congressman McHugh, and distinguished members of the subcommittee, thank you for the opportunity to discuss the current posture of the Army Medical Department. Our investments in medical training, equipment, facilities, and research, which you have strongly supported, have paid tremendous dividends in terms of safeguarding soldiers from the medical threats of the modern battlefield, restoring their health and functionality to the maximum extent possible, and reassuring them that the health of their families is also secure.

Army medicine is an integral part of Army readiness. Army medics are deployed around the world supporting our Army in combat, participating in humanitarian assistance missions, and training throughout the world. Like the rest of the Army, this operations tempo is beginning to take its toll on the people and equipment who are vital to its success.

The toll has been high in terms of cost and human sacrifice. Army medics have earned 220 awards for valor and more than 400 Purple Hearts. 102 AMED personnel have given their lives in Iraq or Afghanistan. These men and women are truly the best our nation has to offer and will make any sacrifice in defense of their nation and most importantly, for the care of their patients.

We recently hosted a human capital strategy symposium to address growing concerns within Army medicine about accessions, retention, and including well-being issues, which have a direct impact on morale. We have established a 180-day deployment policy for select specialties, established a physician assistant critical skills retention bonus, increased the incentive special pay for certified registered nurse anesthetists, and expanded the use of the health professions loan repayment program.

Fiscal year 2006 presented Army medicine with challenges in recruiting health care providers. The Army fell short of its goals for awarding health profession scholarships in both the medical corps and dental corps. These scholarships are by far the most important source of accessions for physicians and dentists. And this presents a long-term manning challenge beginning in fiscal year 2009.

The Reserve Office Training Corps, or ROTC, is a primary accession source for the Army Nurse Corps. In recent years, ROTC has had challenges in meeting the required number of nurse corps accessions. And as a consequence, the U.S. Army Recruiting Command was asked to recruit a larger number of direct accession nurses to fill the gap. This has been extremely difficult in a difficult and competitive market. In fiscal year 2006, recruiting command achieved only 84 percent of its mission for Army Nurse Corps officers.

The Reserve components provide over 60 percent of Army medicine's force structure. And we have relied heavily on these citizen soldiers during the last four years. And they have performed superbly.

But accessions and retention in the Army National Guard and Reserve continue to be a challenge. Working with the chief of the Army Reserve and director of the Army National Guard, we continue to explore ways to improve Reserve component accessions and retention for this important group.

We seek to quickly integrate lessons learned from the battlefield into health care training and doctrine, not only in military medicine, but throughout civilian facilities as well. Army medicine continues to lead the nation in adopting new trauma casualty management techniques. Since 2003, we have provided rapid fielding of improved tourniquets, new pressure dressings, and the use of hemostatic bandages that promote clotting.

I know you are aware that traumatic brain injury has emerged as a common blast-related injury. TBI is a broad grouping of injuries that range from mild concussions to penetrating head wounds. An overwhelming majority of TBI patients have mild and moderate concussion syndromes with symptoms not different from those experienced by athletes with a history of concussion. Many of these symptoms are similar to post-traumatic stress symptoms, especially the difficulty concentrating and irritability.

Through your continued support, we will quickly develop a better understanding of TBI from scientific research, including acute diagnosis, treatment, and long-term rehabilitation. You are well aware of the challenges involved in managing this health care delivery system as highlighted in the recent Washington Post articles about conditions at Walter Reed Army Medical Center. The post series highlighted brick and mortar problems that should have been identified and fixed by our leaders at Walter Reed. But more challenging, the post series articulated soldiers' frustration with a bureaucratic disability evaluation system that truly needs an overhaul.

We have not waited to correct the problems identified at Walter Reed. I have a tiger team out assessing all of our facilities to ensure that there is not another building 18 out there and that any other concerns are identified and quickly resolved. Within two weeks of the Washington Post series, every soldier who had been living in building 18 had been moved out. And the Corps of Engineers was awarded a contract to replace the roof on the building. We'll evaluate future uses of the building before we decide to invest on additional renovations.

We're improving the transition from in-patient care to out- patient care for our warriors at Walter Reed and across Army medicine. We quickly established a wounded warrior transition brigade led by experienced combat veterans to focus on the unique command and control requirements of patient management as opposed to the day to day command of soldiers assigned to the staff at Walter Reed. The leadership of this brigade down to the platoon sergeant level is supported by the line Army so that now the medics at Walter Reed can focus on patient care responsibilities they were assigned to Walter Reed to perform.

We took the painful lessons learned at Walter Reed and implemented an Army-wide action plan for improvement. This plan includes a wounded soldier and family hotline, an 800 number which began operations last Monday on the 19th. As of the 25th, we had received 315 calls detailing 179 issues ranging from medical care to personnel to finance.

We have already researched and resolved 29 of the 56 complaints received about Army Medical Command areas of responsibility. Seven of those calls were for information only. But these issues are quickly elevated to the Army leaders. And calls are returned by an expert in the topic area within 24 hours.

We are also implementing a one-stop soldier and family assistance center at Walter Reed. This center combines case managers, family coordinators, personnel and finance experts, and representatives from key support and advocacy organizations such as the Army Wounded Warrior Program, the Red Cross, Army Community Services, the Army Relief Fund, and the Department of Veterans Affairs. We're also hiring patient advocates across the AMED and establishing an ombudsmen program, first at Walter Reed and then across the Army.

We're revamping the administrative processes of evaluating and adjudicating our soldiers' disabilities. Our goal is to streamline the process to eliminate confusion among soldiers and families. As we make these changes, we must not compromise the quality of medical care received or the soldier's right to a full and thorough medical evaluation.

We will need Congress' support to make some of the necessary changes. As we identify those areas that need legislative change, we will bring them forward for your consideration. We will ensure that soldiers no longer feel that when they leave the resources and attention of our health care system behind when they are discharged from the hospital that people don't care. I am grateful to the Congress for the concern and attention paid to soldiers and their families. And I will keep Congress informed as we improve these processes.

In closing, let me emphasize that the service and sacrifice of our soldiers and their families cannot be measured with dollars and cents. The truth is we owe far more than we can ever pay to those who have been wounded and to those who have suffered loss. Thanks to your support, we have been very successful in developing and sustaining a health care delivery system that honors the commitment our soldiers, retirees, and their families make to our nation.

Thank you again for inviting me to participate in the discussion today. I look forward to your questions.

SNYDER: Thank you, General Pollock.

Admiral Arthur?

ARTHUR: Yes, good morning.

SNYDER: Good morning.

ARTHUR: And, Dr. Snyder, Ranking Member McHugh, other distinguished members of the panel, thank you very much for your kind wishes on my announced retirement in August. It's been an honor to serve for these 33 years and to come and represent the Navy in this committee.

I joined the Navy in the 1970s when we had some significant problems with health care quality. We had a draft service. We had the Berry (ph) plan. We had other plans that brought into our service, not the top health care providers that we have today. We suffered through some of those problems in the '80s. The best of our people stayed and made what I think is the best health care enterprise in the world today. Both Army, Navy, and Air Force systems, I think, have the highest quality we can have.

In our MTFs, you can get quality care that's focused on the patient. I like to say that we never ask our patients how sick they can afford to be because we give the right care every single time. And what a pleasure it's been to have a patient population that's composed of 100 percent patriots.

We have some of the greatest graduate medical, dental, and nursing education programs in the United States ranking in the top 10 for many of our programs. The quality of the care, the quality of the education is extraordinarily high.

We also deliver the best care in the world where it counts the most, in combat service support. We have the lowest disease and non- battle injury rate in history. That is the rate of illnesses and injury in a combat zone that are not due to combat but to other illnesses and injuries. We are also resuscitating people from injuries that in prior wars would have been fatal. The average stay for a casualty who comes back to Bethesda in the intensive care unit is seven and-a-half days. The average time in a hospital is 109 days.

How people that badly injured are able to get off a battlefield and survive their injuries is nothing short of miraculous. It's due to many factors: the quality of care that we have, the surgeons far up front, the nursing staff that are right there on the battlefield. But I would say the overwhelming reason why we have the resuscitation rate that we do is the Navy, corpsmen and by extension, the Air Force and Army's medics who are on the field and give the first level of care. They have either seen a Marine or soldier who has been injured or they have trained another Marine or soldier to deliver that combat care.

Unless a wounded veteran gets to a surgeon with a heartbeat, he will not survive. And it is our corpsmen and by extension the medics who ensure that. They are the best they have ever been.

I want to say a special warm thanks to the Air Force's critical care air transport teams that make it possible to get all of these critically injured patients from the battlefield to Landstuhl and then Landstuhl back to the states. And a special thank you to the Army's wonderful facility at Landstuhl, which we are proud to have one- quarter of the staff as Navy personnel. This was a recent addition to their armamentarium.

I want to especially recognize Landstuhl because unlike Walter Reed, Bethesda, and all of our other facilities back at CONUS, the folks at Landstuhl get to see all of the casualties in their newly injured states. They don't have the advantage of seeing them walk out, see their families reunited, and to see the wonderful cures. They day after day see injured sailors, Marines, Airmen and soldiers and, I think, have extraordinary challenges. My hat is off to the staff of the Landstuhl Army Regional Medical Center.

We do have special challenges, as General Pollock mentioned, especially in traumatic brain injury, post-traumatic stress. When I first took this job, someone gave me a brief that said 15 percent of people who go into combat are significantly affected by the experience. And I said, "That's wrong. One hundred percent of people who are in combat are significantly affected by the experience."

The closer you are to combat, the closer you are to the actual fighting, the breaking in of the doors at Fallujah, the more affected you are. And we have to recognize that this is a debt that all of these young men and women are gaining in combat that we need to repay by paying attention to their needs as they come home.

Traumatic brain injury is an especially difficult entity for us to define right now. We are just coming tot he realization that blast injuries, the concussive injuries, especially multiple concussive injuries, have an affect on brain, on cognitive function that we had not anticipated before and that we have to now define what that is. It is similar to, but not exactly like, the concussive injury in sports players and other people who have a direct blow to the head. These concussive injuries can give you very subtle symptoms that often are not amenable to diagnosis with standard tests.

They can be difficulty with memory, difficulty with mood, inability to make a decision on a menu. And we have veterans who get lost in supermarkets from their traumatic brain injury affects. We need to do a better job of defining it, to following these people, to being able to give them the right treatment based on their symptoms.

As good as we are today, we can be better. I think a unified or joint approach to health care would benefit us all so that we have common financial systems, common logistics, common communication, common doctrine. And we are working toward that, but I think we have a long way to go. And we could certainly do better.

Another area where we are working very hard and I think we are making great strides is with DOD and V.A. interface for our veterans. And one of the examples I would give is the facility at Great Lakes. The Naval Hospital and the V.A. facility at Great Lakes have combined. They've combined their leadership, their clinical staffs, their laboratory, their X-ray. And we now have as close as we can get at the moment a joint facility with the Veterans Administration.

We do have some challenges that I would be happy to discuss.

Dr. Snyder, you mentioned the efficiency wedges. We have other wedges and reductions. And by what other name you want to call them, they are reductions in our funding. For us in FY '08 is $343 million out of a $2.7 billion budget.

We have challenges in personnel. We have program budget decision 712 that you know well, that has asked us to make military to civilian conversions. We are only able to make about 83 percent of those conversions at the moment, despite an intense effort to do so.

We also have the program decision memorandum number four that mandated 901 additional cuts, not conversions. And this year, we will have 489 people that we will cut from our roles beginning October 1, 2007. In addition to those cuts, the budget wedges, efficiencies, reductions will necessarily result in a decrease in our contracting funds, further adding to our challenges with providing the right personnel to staff our facilities and be ready to support combat operations.

We have gone through the quadrennial defense review and its medical readiness requirements review. And in that process, many of our future requirements were minimized, especially in areas of homeland defense and humanitarian assistance. That concerns me.

We also addressed fatigue of our deployers. We have a great number of our corpsmen, doctors, nurses, dentists who are deploying and not just once or twice, but three, four times. And this operational tempo for a very combat trauma resuscitative, intensive war does cause fatigue in our providers.

Mr. Chairman, thank you very much for the honor of being here today. It's been a pleasure to serve. And I thank you for allowing me to give my statement.

SNYDER: Thank you, Admiral Arthur.

General Roudebush?

ROUDEBUSH: Mr. Chairman, Congressman McHugh, distinguished members of the committee, it's really a privilege and honor for me to be here today to tell you about Air Force medicine on the battlefield and at home station. Up front I'd like to note that Air Force medicine is not simply about support. And it's not simply about reacting to illness and injury.

Air Force medicine is a highly adaptive capability tightly integrated into Air Force expeditionary capability and culture. We build a healthy, fit force fully prepared to execute the mission from each of our bases whether deployed or here in the states because every Air Force base is, in fact, an operational platform.

Whether launching bombers from Whiteman Air Force Base or sitting alert in a missile control facility at F.E. Warren Air Force Base, or providing close air support from Balad Air Base in Iraq, we protect our power for our joint forces and provide sovereign options for our national leadership from our bases. Air Force medicine supports that war fighting capability at each of our bases and is, in fact, designed to prevent casualties and sustain our fighting strength. The result is the lowest disease non-battle injury rate in the history of warfare.

But when there are casualties, whether they be Airmen, soldiers, sailors or Marines, your Air Force medics are there with worldclass care. In the deployed arena, our medical teams operate closer to the front than ever before allowing us to provide our war fighters advanced medical care within minutes. Underpinning this worldclass health care for our joint war fighters is our system of joint en route care.

It begins with a Navy corpsman or an Army medic providing life- saving first aid at that point of injury. The casualty is then moved to the next level of care for us at our theater hospital at Balad Air Base, the hub of the joint theater trauma system where life-saving damage control surgery is performed by Air Force surgeons and on occasion, teaming with Army surgeons. The casualty is then prepared for safe and rapid movement in our Air Force air medical evaluation system to Landstuhl, an Army hospital manned by Army, Navy, and Air Force medics.

Re-triage and restabilization is accomplished. And the casualty is prepared for air evac back to definitive care at Walter Reed, Bethesda, Wolford Hall, Book Army, Navy Balboa, or perhaps a V.A. hospital. These capabilities combined to create an average patient movement time of three days from battlefield to stateside care.

That's truly remarkable when compared to the 10 to 14 days required during the Gulf War or an average of 45 days it took in Vietnam. And it's especially remarkable when you consider the severity and complexity of the wounds that our forces are sustaining.

In short, Air Force medicine is a key and central player in the most effective joint casualty care and management system in military history. Having just returned from Afghanistan and Iraq, I have personally observed this capability from that far forward care all the way home to the states. And it's truly life-saving care.

As our casualties move back through Landstuhl and on to our stateside military medical centers, our Air Force casualties are followed closely by their unit through an assigned family liaison officer, a member of their unit, to ensure that the needs of the casualty and their family are met. And if going through the disability evaluation process is the next step for our wounded Airmen, the Air Force palace (ph) heart program ensures the commander, the medics, and the family liaison officer continue eyes on and hands on throughout the disability process.

Our Air Force medical capabilities go beyond home station care and support of our war fighters. Our medics are globally engaged in training our allies, in supporting humanitarian missions, responding to disasters, and winning the hearts and minds in key areas around the globe. And as we focus on care for our war fighters, I believe it's also very important to note that caring for the families of our Airmen is a mission critical factor. Knowing that their loved ones are well cared for back at home gives our Airmen the peace of mind to do a critical job in a stressful and dangerous environment.

The care we provide is a very important factor in building that trust that's fundamental to attracting and retraining an all-volunteer force. This demanding operations tempo at home and deployed also means that we have to take care of our Air Force medics. This requires finding a balance between these extraordinarily demanding duties, time for personal recovery and growth, and time for family.

And it means developing the next generation of Air Force medics. My charge is to ensure that we recruit the best and brightest, prepare them to expertly execute our mission, and sustain and retain them to support and lead these important efforts in the months and years to come.

In summary, the talent and dedication of our military medics ensure an incredible 97 percent of the casualties that we see in our deployed and joint theater hospitals will survive today. For our part in this extraordinary system, Air Force medics have treated and safety evacuated more than 40,000 patients since the beginning of Operations Iraqi Freedom and Enduring Freedom.

Globally we've provided compassionate care to 1.5 million people on humanitarian missions over the past six years. And at home station we continue to provide high quality health care for 3 million patients every year.

It's clear that we have challenges. But these challenges represent an opportunity. And we have the responsibility to step up to that opportunity to assure that our processes and our capabilities are precisely what those who go in harm's way both need and deserve and that we take care of their families as well.

Thank you for your support and assistance in meeting this incredibly demanding and critically important mission. I assure you that we will continue to work hard with you in the months and years to come to sustain and improve our medical capabilities for this fight and for the next. Thank you.

SNYDER: Thank you, General Roudebush. What we'll do now is David is going to put the five-minute clock on us. And Mr. McHugh and I follow it pretty closely. And we'll just go down the line here.

But I suspect we'll go at least two, if not a third round. So when we get to Ms. Shea-Porter, your day's not over. We'll come back and start over again.

I would like to start. We appreciate your testimony.

Admiral, you brought up this issue of efficiencies. You had such an artful sentence in your written statement on page two in which you state fiscal year 2008 -- you need to put the clock on now, David -- fiscal year 2008 provides funding challenges in that the efficiency wedge increases in certain assumptions regarding savings opportunities may not be borne out in execution. I thought that was a very artfully crafted sentence that I think if I am an enlisted guy or a junior officer and I read that, I think we're going to get screwed. Something bad is going to happen.

And you brought that up. And I appreciate you acknowledging it's a problem this committee, as Mr. McHugh articulated very well, has been very concerned about. The question for us is what do we do. You know, we usually say we're here to help you do your job. But you all are receiving some mandates, not from us, but from others that are making your mission difficult.

So, I mean, we're here on this committee heading into the defense bill. This is a great committee. We're short some Republican members. They're having a conference, a very important meeting today. But we're all unified in our efforts to help you. So what is our response?

I mean, what do you suggest for us, Admiral Arthur, in terms of how do we deal with this? In fact, you upped the ante. We thought it was $248 million. And you said it's $343 million that we're looking at. That's a lot of pressure on the folks at the lower end of the chores that you want to get done.

ARTHUR: Yes, sir. My figure is we have $147 million in what's called an efficiency wedge, which has no granularity to it. It's a rough figure that health affairs has given us. We have...

SNYDER: I don't know what you mean by no granularity. Do you mean it's not any detail, nobody has come and just said do this?

ARTHUR: No, no. Correct. There is a requirement to fund the private sector care. And funds are being removed from the direct care system to fund the private sector care. Now, the law was created by this forum to prohibit money from going from direct care to private sector care during the year of execution. However, this is a creative way to do it in the palm.

So in the palm this year we have $147 million in an efficiency wedge. And it's interesting that whenever we highlight efficiencies, they are taken off and the efficiency wedge still remains in its $147 million form. We have a reduction in pharmacy services of $127 million, facility renovation and upkeep reductions of 422 million, and a reduction in our end strength, which results in a 900-person cut in our staffing over the next few years. This year will be $47 million.

So the total for us is $343 million out of our $2.7 million budget this year. We cannot maintain the present level of services with a funding cut that is about 16 percent of our total budget.

SNYDER: But, I mean, you're heading out the door. Who's going to get you? But you're being told that you can. Correct? I mean, somebody must think -- I mean, I have no doubt that there's patriots all the way up and down the line in the Pentagon. But somebody thinks that you can do this without that money. Is that a fair statement?

ARTHUR: Well, somebody thinks we can be a whole lot smaller than we are today and get the job done.

SNYDER: Yes.

ARTHUR: And if we are going to make these kinds of cuts, we will be delivering care to active duty only. We will be having pharmacy services that are provided not in our military treatment facilities, but in the private sector care. And this, in my opinion, will increase the bill overall.

SNYDER: Right.

ARTHUR: Because it will force more care out into the private sector where on the margin it is more costly to provide. And the only mechanism that the Pentagon has to influence private sector care is a bill because there aren't the kind of programs and efficiencies that we can enact within the MTFs that we can display in the private sector care.

SNYDER: The point you just made concerns me because on your list was some maintenance monies. Is that correct?

ARTHUR: $22 million in facility maintenance.

SNYDER: I think the Air Force was doing this a few years ago overall. And it's shortsighted budgeting because things that you ignore in maintenance bites you sometime down the line. And, I mean, any home owner knows that. You ignore the small leak, and pretty soon you're replastering walls. So that seems pretty shortsighted.

With regard of the personnel cuts or conversions, is it also fair to say -- I mean, General Roudebush doesn't submit an invoice for the overtime hours he's worked last month. A civilian employee is obligated. I mean, you're obligated to pay those kinds of fees. It does not become a one to one conversion. Is that a fair statement?

ARTHUR: That is fair. And at Bethesda this week I was told of the problem with overtime pay given to the civilians that we've had on conversion because they are...

SNYDER: So it's already an issue?

ARTHUR: They are no nights, no weekends, 40 hours a week, no deployments.

SNYDER: Yes.

ARTHUR: And they take the place and sit right beside a lesser paid active duty member who is doing the same job. This year in FY '08 we will convert 1,036 billets, positions. And if we keep the 83 percent rate that we are able to fill them currently, that means a decrease of 176 more people.

SNYDER: Mr. McHugh?

MCHUGH: Thank you, Mr. Chairman.

I think it's fair to say what happens on capital costs and maintenance costs is Walter Reed. There were contract problems there and continuity of contracts, I understand. But certainly, if you don't have dollars to maintain facilities, including those places where the soldiers are housed while under care, those are the kinds of problems you have.

The good admiral kind of highlighted the concerns he has about the beginning of the military to civilian conversion plan. I want to broaden that a little bit. You know, as I mentioned in my opening comments, we've already converted thousands of these positions, including at this point 152 physicians, 349 nurses, and 208 dental positions. And at the same time, this Congress is actively enhancing the recruiting and retention through the medical health care professional program to try to bring more of these people in.

It just seems kind of at odds to me that we're having trouble, as General Pollock said, finding some health care specialties and yet we're cutting them out. I don't know. Do either General Pollock or General Roudebush want to comment a little bit about the concerns you may or may not have with respect to the military to civilian transition program on the medical health care professions, particularly nurses and physicians?

General, either general?

ROUDEBUSH: Yes, sir, it is a concern. As we attempt to find the right balance within our capabilities -- and there are opportunities where we can, in fact, use some civilian physicians in order to provide the capabilities both for our active duty and our family members. That is not a bad think in and of itself. It is the extent to which we are being asked to go in terms of making those conversions that causes us great concern.

In the Air Force, we've done a thorough review of our deployable requirements and our active duty requirements, identified a body of positions that we thought could make sense to convert and then did a business case analysis on it to see if, in fact, those capabilities were present, were they cost effective and could we acquire them. We can go that far. But we are concerned about going any further than that because it very quickly gets into the issues that Admiral Arthur describes where we can, in fact, or cannot, in fact, meet the mission in some regard. So we do have concerns in that area.

MCHUGH: I appreciate it. And if I may add before we'll have comments from General Pollock, beyond, I would argue -- and I would like your feedback on this -- what the chairman said. And I agree with him totally.

I mean, you have an overtime situation in the civilian sector you don't have under normal circumstances, at least in the military sector. You've also got a deployability, availability to deployability issue, which I think would be a big issue for all of you, certainly, but particularly for the Navy and the -- well, no, all of you, all of you, General, across the board. So, you know, it's kind of a two-edged sword that cuts you both ways, it seems to me.

General?

ROUDEBUSH: Yes, sir. In fairness, though, I could say we have tried to convert those billets that are not deploying billets such as radiation therapists for cancer. We don't have any deploying billets for them, so we will convert them to civilian positions.

MCHUGH: Yes, I understand that. And I appreciate that. And I understand what you're trying to do. But you can only try to do so much.

ROUDEBUSH: Yes, sir.

MCHUGH: And you noted you're able to fill 83 percent. So try as you might, you've got some real problems there.

ROUDEBUSH: Yes, sir.

MCHUGH: That's my point. Thank you.

General?

POLLOCK: Sir, when the original plans were made, we did not take into consideration that we could truly be in a long war. And some of the eliminations that we've done are for staff now that we realize are absolutely critical. You addressed the physician and nurse issues. I'm also concerned about our enlisted soldiers that have been converted to civilians.

MCHUGH: Yes.

POLLOCK: We're unable to get the mental health specialists that we're able to train and use as part of that care team. We have not been able to do the hiring -- even those positions were eliminated -- for a number of the nursing positions because of the national nursing shortage and the challenges that we have in hiring because of the OPM restrictions on how we can hire a nurse.

Very, very difficult for us to bring professional nurses back into our organization. And then when we add the significant pay difference between what a civilian would receive and then the overtime compensation compared to the enlisted or junior officer salaries that are available to them, that's definitely a morale buster.

MCHUGH: Yes. I appreciate your expanding on that. And you're absolutely right. It's a critical issue beyond just the health care professionals. There are other positions that are staffed that are equally important. So thank you for filling that in.

And, Mr. Chairman, I appreciate it. I yield back.

SNYDER: Thank you. I think this line of questions is going to continue here through the day, I think.

Ms. Davis?

DAVIS: Thank you, Mr. Speaker.

And thank you all for being here. You obviously are here at such a critical time in this discussion. On the conversion issue, if I can just continue with my colleagues, are we at really a critical point in this? Should we be rethinking what we're doing?

POLLOCK: We've asked the Army to hold -- and the Department of Defense -- to hold on any additional conversions so that we can do a renewed look because of the issues that we hadn't taken into consideration when we made the original suggestions back in '03 and '04 for who we thought we could convert. Because the reality is although we selected specialties that we thought we would be able to hire in the civilian world, we're discovering that we really can't.

DAVIS: Yes.

POLLOCK: And we'd like to have that reassessed so that we're making better decisions and not breaking health care as a result of a personnel change.

DAVIS: Do you see impacts as well in terms of individuals who might be in a pool, so to speak, to be moving into military health provider positions who perhaps would see the conversions and not consider those positions for the future? Is it impacting folks in that way?

POLLOCK: Ma'am, would you be so kind as to ask me the question again? I'm not sure I followed you.

DAVIS: I'm just wondering by virtue of a lot of the conversions that we've made -- I'm wondering. You mentioned some of the corpsmen, the tremendous role that they're playing, the skills that they've developed. I'm just wondering whether in some ways we're not cutting off those opportunities for them in the future by virtue of what we've done in these conversions, whether that somehow somebody looking at that would say, "Well, why would I bother."

POLLOCK: Well, we certainly have concerns with that because as we decrease the number of our junior enlisted in different specialties, then that also decreases the number of non-commissioned officers. And as you then become top heavy in those NCO ranks, they stop being promoted.

So then again there is one of those second and third order effects that people hadn't anticipated that then people who are then mid-term, you know, mid-career NCOs are going, "Well, if I can't get promoted and I have to go start at the bottom of a new specialty, should I stay in the Army." And that's a concern for us. I've been working with Command Sergeant Major Eddy since I took over the position to start to address these concerns.

DAVIS: Yes. I want to turn for a second to the mental health area because of one of great concern to me personally, but obviously to all of us. And I know that we're going to have testimony in the second panel from TRICARE. But I wonder if you have concerns we're cutting -- there's a 5.8 percent decrease in behavioral health provider reimbursements. And do you see that as having an impact?

Obviously, as you're saying, we're not able to even find the people that we need. And now we're going to be cutting back and in some ways, discouraging people from treating those who really need it right now. Can you comment on that?

ROUDEBUSH: Ma'am, in the Air Force, we have paid close attention to that. First, training our providers in terms of PTSD, what to look for, how to identify it, how to support that individual and treat them as they go through. And in addition, we have brought on 32 additional mental health providers to put in those areas where we have the most returning Air Force Airmen that have been deployed that could potentially require that capability. So we are paying close attention to that in order to maintain the capacity that we need.

DAVIS: You're not necessarily seeing any negative impacts of that decrease at this time?

ROUDEBUSH: Because of the steps that we have taken, we have not seen any impacts.

DAVIS: You're not seeing any.

ROUDEBUSH: However, we continue to watch that very closely because as we get into this sustained conflict -- and I think we're going to be in this conflict for a very long time -- I think the likelihood and the necessity for continuing to both maintain and perhaps increase our capabilities will be very real.

DAVIS: Yes. ARTHUR: Ma'am, there is a military health -- a mental health task force that is looking at this in a very consummate (ph) way from start to finish involving the service members and their families, military and civilian mental health services. It should report out to the secretary of defense on the 15th of May.

Last week I was made the military chairman of that effort after General Kiley's retirement. He was the co-chair before me. So we're going to look at this. I've read the material that they've collected so far. And they are looking at a very broad-based approach to mental health, not just starting at the time when we identify people who need treatment, but before that and building resilience in our service members and their families anticipating some of the stresses of combat and other stresses of military life.

DAVIS: Yes.

POLLOCK: The concern I would have, ma'am, is we have forward deployed many more members of the behavioral health team to assist the folks who are deployed. And then as we have requirements for the soldiers as they've returned or their families, we are dependent on the civilian sector for that support. Mental health has not been a robust practice arena in the United States.

Although there is demand, we've certainly are under-resourced across the country. And many of us could speak to the challenges that we have for a child or adolescent behavioral health care around the nation and how difficult it is.

I remember when I was up at Fort Drum how difficult it could be to move a child perhaps to another state before we were able to get in-patient care if he needed it. This is certainly an area that is a national issue, not just one for the military.

DAVIS: Yes. Thank you.

Thank you, Mr. Chairman. I know I certainly want to address the women in the military issue as well with PTSD. Thank you.

SNYDER: General Pollock, I need to have you clarify your first answer to Ms. Davis in which you -- I forgot how you phrased it. But you have asked to -- you have asked your senior folks to revisit a certain decision on their military conversion. Did I understand correctly? Would you repeat what you said?

POLLOCK: Yes, yes.

SNYDER: I thought you had an October 1, 2008 timeline that you have to meet.

POLLOCK: Yes, sir, we have the 2008 conversions broken into different phases. And I've gone back and asked if we could please relook those to see whether or not we are actually going to be able to hire the folks that we had anticipated that we could when we did that original assessment.

SNYDER: And specifically, whose decision is that?

POLLOCK: That goes up through the Army G-1. And then it also goes to the TMA up to Department of Defense.

MCHUGH: Mr. Chairman, if I may?

SNYDER: Yes, Mr. McHugh?

POLLOCK: Thank you. Admiral Arthur reminded me it's for the undersecretary for personnel and readiness.

MCHUGH: Yes. When Dr. Winkenwerder appeared before this subcommittee in response to a question I had posed, he had said that they are certainly willing. I don't think he made a hard commitment they were. But he said they certainly were willing to reevaluate both the efficiency wedges and the military to civilian conversions. But I don't think a decision has been made on that. And until a decision is unmade, it remains, it seems to me.

SNYDER: Ms. Boyda?

BOYDA: Thank you, Mr. Chairman.

Let me just say my dad was a medic on a submarine in World War II. So I've always had good medical care at home where he thought was he still was, you know, still from 60 years ago. And thank you very, very much for your service.

May I just ask a question? Did you say you have lost 102 of your medic? Did I hear you say that?

POLLOCK: Yes, 102. It's across the health care professions. It's medics. It's physicians. It's physician assistants. It's medical service corps officers.

BOYDA: That was in the Army or it was in the armed services?

POLLOCK: That's within the Army. That's the Army medical department.

BOYDA: I had no idea. I'm sure all of our condolences on behalf of everyone here. After the Walter Reed, I went to both of the V.A. hospitals in my district and then to Irwin Army Hospital there at Fort Riley, came back and reported that there is some really ugly green tile in our V.A.s, but they're clean and they're safe, which is not surprising. When I went to Irwin, the guy -- and I'm going to tear up. The staff virtually teared up at how much they take care of their soldiers, how much of a team they are and the concept that we're just turning these into civilian, you know, jobs just alarms me like no other.

And I'm a freshman here. Can you explain how we got here, how the decision was made, when it was made? I really don't have the background. When was this decision made?

ARTHUR: For the military to civilian conversion?

BOYDA: Yes.

ARTHUR: Every four years we have a quadrennial defense review. And that review takes into consideration all of the policies and all of the plans that we have to conduct operations in DOD. And part of that is a medical readiness requirements review where the department says these will be the requirements over the next foreseeable future for combat operations and here is how the medical piece will fit into that support.

They calculate what operations they will have, what number of casualties, what kind of casualties. And then they plot what the support will have to be to ensure that those casualties are well trained. They take into consideration the garrison care, that is the corpsmen, the doctors on the submarines, the ships and with the Marines every day. And they roll it all into a figure, and they tell us that this is what we require of your medical department.

BOYDA: Who is they?

ARTHUR: The undersecretary of defense for personnel and readiness through his plans, analysis and evaluations program, the PA&E, as we call it.

BOYDA: Does that come back through Congress then for any kind of funding or any kind of -- again, I'm trying to figure out -- and it doesn't sound like -- it's just...

ARTHUR: No, it does not.

BOYDA: And when was this one done then?

ARTHUR: This one was done just within the last year. They have taken minimal casualty requirements for future war fighting scenarios, minimal deployment and redeployment, almost no humanitarian assistance, disaster relief or homeland security.

BOYDA: So this conversion -- I hate to (inaudible). But this conversion that we're talking about that's going to be finished on October of 2008 was actually directed in what year?

ARTHUR: Yes. This past year. Well, actually, there are two components. There is the program budget decision 712. And that was several years ago. And we are on the track to convert that number of billets that we had in many ways agreed to.

BOYDA: So this conversion started when, again, if you would?

ARTHUR: In FY '06 and will continue to FY '11.

BOYDA: I guess what I'm trying to ask is -- and I just sometimes continue to be appalled at some of the decisions that we're making. This move to convert actually happened while we were at war?

ARTHUR: Yes, ma'am.

BOYDA: Well, did they start looking at doing this maybe a few years back?

ARTHUR: No, this was in the last two or three years.

BOYDA: And I'm going to have to go to an ag hearing meeting. So I'm going to go to a different subject right now. And, you know, we hear that funding for TBI research has been cut back. Can you address that? Do you know anything about that? Is that true? And is there something that Congress can do to -- sometimes what you read in the paper doesn't actually reflect reality. I know that shocks us all.

POLLOCK: I'm glad that someone else thinks that, ma'am. What I'd like to do is provide you a written response to that question. I'm new enough in the job that I can't remember all of those numbers for the research. And I'd like to make sure that what I provide you is correct.

BOYDA: Are you concerned that funding has been cut? Is that something that's on your list of things to worry about? Or if you'd like to get back, that's fine.

POLLOCK: Yes, I am concerned about it because with the fact that TBI and PTSD are seeming to be connected in some analyses, I think it's very important that we continue that research so we know exactly how to provide the care so we can return these men and women to their absolute highest level of functioning.

ARTHUR: This is a newly emerging entity, a new realization for us. And unless we get the research correct, we're not going to get the longitudinal studies that tell us whether we're doing the right thing or not, we're not going to be able to follow the members and their families.

BOYDA: Data are good.

ARTHUR: Yes, ma'am, data are plural.

BOYDA: Thank you very much. And thank you for your service, Admiral.

ARTHUR: Yes, ma'am. It's an honor.

BOYDA: And General. And congratulations. And good luck with your challenges ahead.

POLLOCK: Thank you.

BOYDA: Thank you.

SNYDER: Ms. Shea-Porter? SHEA-PORTER: Thank you, Mr. Chairman.

I'd like to pursue that direction that my colleague was going in. My husband was stationed at Fitzsimons Army Medical Center in Colorado when it was a major medical center. And I was there as well. And I saw the incredible work they were doing through a lot of casualties from Vietnam. And I'm sitting here today. And I, too, am trying to figure out how we got to this point where we decide to gut the system as I knew it and wind up with this other system that we're using.

And what I would like to know when they made the decision to privatize these jobs, was there much input from all of you. Were you asked to give your opinion about all this? Or was it a unilateral decision?

ARTHUR: Yes, we were. And, yes, it was a unilateral decision. We made many inputs. And they were carefully considered and rejected. Some of our inputs had to do with the cost of the civilian conversions, the cost of the people and the overtime, as Dr. Snyder was saying. Some of it was the culture of the military. And that's a difficult thing to quantify.

But as I said in my opening statement, I was here in the '70s and saw a very different culture. Every single one of the senior providers in the military now are here because they are volunteers. And they do not work for money alone.

It is not a reimbursement system. They work to give the right care to each of our veterans and their families every day. That keeps the best of our people in.

And I am concerned about people who will come in for a contracted fee and look at the bottom line, the money, work 40 hours, no nights, no weekends and they will sit right next to someone who makes half as much and the morale impact on that. We have the kind of quality health care we have today because the system has evolved over the last two or three decades. And I'm afraid that some of these conversions, while we will get some very good people, we will also get people who are not invested in our military families but in the paycheck that comes from their contracted services.

SHEA-PORTER: I share your concern about that. And it's especially poignant to me today because a couple of days ago I got a call from a relative I'm very close to. She lives in North Carolina. And she told me she was in South Carolina because she had been diagnosed with breast cancer. They use TRICARE, and they couldn't find physicians who would provide appropriate care for the funding.

And I want to pay tribute to all who have worked in the military health care system. I remember how dedicated they were, and they are to this day. And I find it deeply disturbing. And I thank you for your candor about that. And I think as a nation it's ironic that we talk about supporting our troops, and then we sit here and we find out what that translates to if they need medical care.

I did want to talk about the mental health issue for another moment. We have known for a long time that when soldiers go into combat or have any kind of adverse situations there will be some mental illness and post-traumatic stress syndrome. What has happened in the past couple of years as we've been receiving these troops with these brain injuries and post-traumatic stress syndrome that kept us from addressing it at such a heightened level until now?

In other words, if you could talk to me about two years ago. Was this an issue that you were addressing? Were you looking at these troops and their families and saying this is a crisis? And if you did, who did you talk to in terms of, you know, what department, and what was the response?

ARTHUR: Well, yes, ma'am, we did address that. I think all three services addressed it several years ago. And I think we're actually doing pretty well. For the Navy and the Marine Corps, which we serve in the Navy, we have embedded people in our OSCAR program.

We have mental health providers, technicians, psychiatrists, psychologists embedded into the units that go into combat. They go into combat with them. And instead of being sent for evaluation to some other unit or location, they are treated in theater with personnel that are assigned to their battalions.

So I think that's a very effective way to do it. When they come back, there are debriefings. There are debriefings before they go. The senior leadership is involved. And I think we are seeing a low rate of PTSD compared to what it could be if we weren't paying attention to it.

We also have the reassessment six months after they come back. And it's not because we want to wait six months. It's because that six months is required to get some of the manifestations of post- traumatic stress and the decompression that they need to really manifest some of the post-traumatic stress symptoms.

So we see them. We evaluate all of those assessments. We get them to see mental health providers whenever it's needed. And they can self-refer as well.

So I think we're doing a pretty good job. Are we hitting everyone? I'm not sure you can always say that we will hit everyone because it may take a long time for some of these symptoms to manifest.

ROUDEBUSH: And, ma'am, it's broader than just the PTSD. The PTSD is a critically important piece of this. But as we look at what that means to the family caring for an individual and to the broader community looking across all the behavioral health issues with suicide, for example, being a critical concern always as well as family stress, deployment stress, those sorts of things, and the fact that TBI and PTSD have some overlap.

And as Admiral Arthur pointed out, there are areas where we do not have all the information and the data that we need to fully elucidate that. So I think we are moving in that direction. But I think the ongoing research that is required and the attention and the focus on this is a very good thing to help us move that forward and be sure that we do cover this and the whole spectrum of stress, if you will, across the force and the families that we're able to address.

SNYDER: Mr. Jones?

JONES: Mr. Chairman, thank you. And I'm going to be very brief. I'm sorry I was late getting here because I'm very, very interested in this issue and wanted to hear you, the first panel and look forward to hearing the second panel.

I guess most of the questions since I've been here have been asked that I might would have pursued. But something just came to my mind. And talking about family stress.

And I want to give you an example, Admiral Arthur and only because this touched me so greatly and so dearly. Four or five weeks ago I was invited to go to Camp Lejeune, which is in my district, and read a book to six-year-old children at the Johnson Elementary School. And they had 10 little children there in front of me.

I'm sitting in a rocking chair, probably where I deserve to be anyway, and reading Dr. Seuss, quite an interesting book because I couldn't pronounce half the words. But the teacher told me not to worry about it. The children wouldn't know if I was right or wrong with what I said.

So anyway at the end, I let the little children make statements or ask me questions. And, of course, everything from have you seen the zoo in Washington to do you know the president to, you know, where do you work. But one thing that really bothered me towards the end two or three children mentioned that their father or their mom was in Iraq. And again, these are six-year-old children.

But the last child said to me -- and I never will forget it -- my daddy is not dead yet. A six-year-old child, my daddy is not dead yet. And, Admiral, I guess my question to you -- how far down does the Navy and the Marine Corps, Army, Air Force -- how far down do you go to try to figure out what services you can offer to the family? I'm not saying that child has a problem. But that was such a deep statement that I heard. My daddy is not dead yet.

You cannot go into every family. You cannot evaluate every child. But where in the world, if this is a problem -- not saying this is an emotional problem. But this is a six-year-old child that's thinking that my daddy is not dead yet.

How do you reach the family? I mean, does the family in that kind of situation -- and not saying there's a problem. I don't know how to evaluate what I'm trying to ask you. And I'm sure you can't make any sense out of what I'm trying to say.

ARTHUR: Well, Congressman Jones, it's good to see you again.

JONES: Yes, sir, my pleasure.

ARTHUR: I think that six-year-old does have a problem. There is nothing more fundamental to a young person's life than the knowledge that the family unit will be there. The insecurity about the death of a parent is fundamental to the development of this young man or woman.

We have all sorts of family services. And they go right down to the children. We involve the teachers in the schools in classes about what is post-traumatic stress, what should they look for in the children, how should they help the children cope, especially on Camp Lejeune whereas DOD schools -- excuse me -- all of or the majority of the children there of active duty Marines are cared for on the base, especially with those brand new schools that are beautiful.

JONES: Yes, sir.

ARTHUR: And they pay particular attention because all of their mothers and fathers are subject to deployment. We have in the Marine Corps the key volunteers that I think you know very well. They are the spouses of men and women who are deployed. And they are very, very active working with the family unit. So I think they are well supported.

But that said, you can never get away from the fact that everyone in that school is going to know someone whose mother or father was either very seriously injured or killed in this combat. And you can't get away from that.

JONES: Sure.

ARTHUR: So I think the key is to be proactive. That said, we are having a lot of our staff of our military treatment facilities deployed. I went to Cherry Point last month. The commander of the base said, you know, we've got longer lines in the pharmacy and longer waits for clinics.

And I said, yes, sir. Twenty percent of your hospital staff is deployed today. And they're not on vacation. They're deployed in direct combat service support for their Marines in theater. And saying you can go 40 minutes for an obstetrical appointment to Craven Medical Center is not the kind of service that I think our Marine families deserve.

JONES: Mr. Chairman, before I close -- my time is about up -- I could not say enough about the services provided at Camp Lejeune and Cherry Point at the hospital. It's outstanding. I would agree with you that the family support is excellent, I'm sure across every base, Army, Navy, Marine Corps, and Air Force.

And I would also say that the DOD schools as long as there is a military in this country I hope that the Congresses of the future when I will not be here will always remember that those schools are an integral part of the quality of life because I've seen so much good at those schools and at Camp Lejeune and the one I visited.

ARTHUR: Yes, sir.

JONES: So I appreciate your comments.

ARTHUR: If I could say one more thing.

JONES: Yes, sir.

ARTHUR: My daughters went to those schools at Camp Lejeune. And they could ride their bicycles to school and leave them in a bike rack unlocked in front of that school and know that they would be there in the afternoon when they returned.

JONES: That's very important.

ARTHUR: It's a wonderful culture.

JONES: Thank you, sir.

ARTHUR: Yes, sir.

SNYDER: Congressman Jones, I've been talking with the staff. And at some point this year I hope that we will have a hearing of this subcommittee on the specific issue of childcare and DOD schools, both domestically and internationally because it is so important.

JONES: Thank you, Mr. Chairman.

SNYDER: We're going to start our -- let's see, I think everybody's been around once. We're going to start our second round here. I had said earlier facetiously that General Roudebush when he submits his voucher for overtime -- it turns out staff corrects me. He has submitted a voucher for overtime. We owe him $2,873,000. I wanted to get into specifically this -- that's not true. For the record, that's not true, General Roudebush. I made that up.

General Pollock, I want to direct this question to you, General Pollock and Admiral Arthur. But when your predecessor was here March 8th, he specifically stated -- it was before the full committee -- quote, "I'm concerned about '08 and '09 we'll have an efficiency wedge that at least as I sit here now I cannot see efficiencies gained to recover that. I have grave concern if we're going to be able to meet those budgetary cuts in those outyears." That's the end of his quote.

And when I think about efficiencies, I think about, you know, energy efficiencies in the home. It turns out if you have a front loading washer, that's much more efficient than a top loading washer. And yet the household doesn't notice anything different.

I can also do energy efficiencies just by dropping the temperature down three degrees. But that's not an efficiency. That's just a cut in service. And I think the concern in this committee is not that you're going to end up with efficiencies. It's just going to be a cut in service that somebody's going to see something different in their lives.

So my specific question to you, General Pollock and you, Admiral Arthur, is as you look ahead for the next calendar year from this day until one year from now, if nothing has changed from the mandates you have received from above in terms of civilian conversions or these efficiencies, what specific services to our military families and our men and women in uniform do you foresee you will not be able to provide in the same way that you do now?

POLLOCK: Unfortunately, sir, that's an issue that my staff is already working with. The equivalent for us over the next calendar year is the budget equivalent for one of our large MEDACS. So basically it means we're going to take an entire MEDAC out of the ability to contribute to the health care of the men and women and their families in uniform. There is no way that I can salami slice that. So it will truly be we will need to make a decision about what we are going to stop doing.

SNYDER: So it is not an efficiency. It is a flat out cut in service at a time our nation's at war?

POLLOCK: Sir, it will be a cut in service.

SNYDER: Admiral Arthur?

ARTHUR: I echo that. If you recall the words of Portia, the lawyer in the Merchant of Venice, she said, "You may have your pound of flesh, but draw nary a drop of blood." There is no more flesh to be gained without drawing the blood of the services that our family members and our active duty will have.

Our cuts are equivalent to one of our large family practice hospitals like Camp Pendleton and Camp Lejeune, Pensacola, Jacksonville, Bremerton. And we will have to have a serious conversation about what services we can provide at 16 percent less funding than the year before.

SNYDER: As a follow-up to that, Admiral Arthur, you both equated it to the closing of a large unit. But it's not going to be the closing of a large unit. It's going to be sprinkled through the system in a way that this committee, this Congress, you all are going to have trouble following, I would think, in terms of what the cuts in services are. You know, every military family that has a delay in an appointment, instead of one week, it's a month or whatever it is.

Instead of having a service at their normal military treatment facility, they're going to have to drive 25 miles at a civilian facility. That's very difficult to follow, is it not? How are you going to follow this impact?

ARTHUR: Well, it is. And I would say we are -- with the magnitude of these cuts, we are beyond the ability to take salami slices. We are going to have to, in my opinion, close significant service locations.

ROUDEBUSH: Sir, if I might add with that.

SNYDER: Sure.

ROUDEBUSH: There are several ways to get at that. One is the diminution or the loss of services. And actually, that requirement never goes away. So those services will be provided, but it'll probably be in the private sector where it could be even more expensive in some regards. But the other way that we try and mitigate that and taking risk is with our sustainment accounts, our care of our facilities, our buying our equipment.

SNYDER: Through seed corn?

ROUDEBUSH: Yes, sir. And we push things downstream.

SNYDER: Yes.

ROUDEBUSH: And particularly now with MILCON, those dollars being in such short supply, we're taking care of older and older facilities. So it's a bow wave of obsolescence. It's a bow wave of risk because we all work as hard as we can to keep those services up to the last inch before we have to say OK, we're going to have to send that care downtown. So it drives us in a direction that has impact in a variety of ways.

POLLOCK: Sir?

SNYDER: Yes.

POLLOCK: If we cut services and have to send it out to the private sector care, we also lose our ability to ensure the continuity of care. We lose our ability to evaluate the quality of care that our patients are receiving there. Whereas inside the Army now we're using HEDITH (ph) measures, which are national criteria to ensure that we're providing the absolute best that we can.

And our goal is to not meet the HEDITH (ph) measures, but to grossly exceed them so we can clearly demonstrate that our care is superior to that available in the private sector. But we're unable to even measure that right now in the private sector.

SNYDER: I wouldn't (ph) be forth moving (ph), Mr. McHugh. Of course, I'll be a little bit of a devil's advocate. The military is always going to have some substantial amount of care done in the private sector. And if that's a problem, you need to figure out how it's not a problem because we are going to have to follow the quality and the continuity of care that is done in the out-patient civilian sector, even care that sometimes is mandated on top of you that you just as soon not...

ROUDEBUSH: Well, sir, if I might speak to that. We have good allies in the private sector.

SNYDER: Right, right. That's right.

ROUDEBUSH: Our partnership with our TRICARE managed care support contractors is as good now as it's ever been.

SNYDER: Right.

ROUDEBUSH: And we need to continue to make that grow and get better.

SNYDER: And better.

ROUDEBUSH: But as that care goes into the private sector, there's also the issue of currency. Our providers need a caseload. They need the complexity. They need to take care of patients in order to stay current up on the step to be able to go do the deployed mission as well. So it's important that we keep that care in the direct care system for a variety of reasons.

SNYDER: We'll go to Mr. McHugh. And then we will go to Mr. Kline, who has joined us.

MCHUGH: I'll be happy to pass to Mr. Kline.

SNYDER: Mr. Kline? And then we'll go to Mr. McHugh.

KLINE: Thank you, Mr. Chairman. I understand we've already discussed the conflict this morning. I am very much disappointed that I couldn't be here for the first hour of this hearing because it's hard to imagine a more pressing issue right now. And because I did miss the first hour, I'll try very hard not to trod on old territory.

Admiral, I'd like to go, if I could, to you. And I understand you discussed it very briefly. But let's talk about corpsmen. The Marine Corps is increasing its end strength significantly. And as I understand, as part of this process, the Navy is looking at reducing the number of corpsmen. Is that correct?

ARTHUR: That is correct. We have the program budget decision that this year is going to reduce 283 corpsmen. They will be gone by October 1st. We are also looking at the Marine Corps' requirement to increase approximately 800 staff, which includes some corpsmen. So we're hoping those will balance. However, we're not including the Marines' families in that calculation. So I think we're still going to be left with...

KLINE: I'm sorry. Explain the balance again. We're cutting?

ARTHUR: Yes, sir. The program decision memorandum number four has required that we cut 901 staff over the next couple of years. The contribution in FY '08 starting October 1st will be 283 corpsmen. And this was calculated based on the Navy coming down about 30,000 people.

At the same time, the Marine Corps is increasing 28,000 people. And we are trying to work with the Marine Corps to offset this program decision memorandum so that we can properly fill the health service needs of those additional Marines, which turns out to be about 700 or 800. We have yet to have a firm figure on that.

KLINE: And what would the Marines do to make this offset? I mean, what do you mean you're working with the Marines? They don't have any corpsmen.

ARTHUR: The program decision memorandum which took 900 staff from us is done. It is in the budget. And those people, the money are gone. So we have to work with the Marine Corps as they increase their staffing by 28,000. The Marine Corps must put in a requirement back to the defense health plan to increase the staff. They are two separate entities, I am being told. One is a cut. It's done. The other is an increase, which we now must properly debt through the system and argue for the corpsmen and doctors, nurses, dentists to support the Marines and, I hope, also their family members who will come with them.

KLINE: Well, it is Washington. Thank you. I yield back.

SNYDER: Mr. McHugh?

MCHUGH: Let's talk go back to the comments I was making about physician losses, 162 that have been lost in the military to civilian conversion but take it from a different perspective. Two of you noted that you're having trouble recruiting in the doctors and into the other health care professions. I mentioned what the Congress has done with respect to trying to make increases for the health profession scholarship program.

We've increased the loan repayment program for officers from $22,000 to $60,000. We've increased the HPSP scholarship grant from $15,000 to $45,000, increased the monthly stipend, which was at $579 a month to no more than $30,000 a year intended, of course, to try to facilitate those recruiting. Other than addressing the issue from the conversion part, which I think is an important component of that challenge, do you have any suggestions what this Congress can do to help you to be more effective in recruiting health care professionals into your ranks?

ARTHUR: Sir, I think there are two facets. One is the recruiting, to get young men and women to come into the medical and dental professions and the nursing professions. I think those scholarships and other programs are terrific. I hope in the next few months to be able to announce a program in the Navy to do a medical enlisted commissioning program where we take some bright young corpsmen and put them through medical or dental schools.

I think another important facet is to retain the talent that we already have, to craft the bonuses and shape the organizational rank structure to keep the gray hairs, if you will, the people that have the most experience in combat service support and trauma management and have the highest degree of medical skill.

We are seeing paradoxically the highest retention rate that we've had in some time in our general surgeons. And we are seeing that, I believe, because the quality of the service, the kinds of service, and the rewards they get from the service on these casualties is so great that they will stay in just for the satisfaction of the practice.

MCHUGH: General Pollock?

POLLOCK: Sir, the retention bonuses and being able to correct them and level some of the disparity between a military salary and a civilian salary so that we can keep the people that have already developed the foundation of military health care and not lose them to the civilian world because they're being very aggressively recruited. And as we look at the multiple deployments and the year deployment for the Army, the year away from their families knowing that they'll face that year again, it's very, very difficult to retain them.

MCHUGH: General Roudebush, your testimony didn't mention you were having recruiting problems. Two years ago General Taylor suggested, in fact, stated that there were some challenges in that regard. What did you do that's been so successful? Great leadership, I know. But beyond that?

ROUDEBUSH: No, sir. The concerns remain. The HPSP program is a major source for us. And thank you for the increased authorizations within that pay structure. And now we're working -- because those are Reserve pay dollars that, in fact, support that to work to be sure that there are dollars available to move into that. We have continued to work both on scope and quality of care to retain the individuals once, in fact, we do recruit them. But we still have concerns and difficulties in recruiting fully qualified.

The additional bonuses and the authorities in that regard, I believe, will be helpful as we work through that. But we are no less concerned relative to our ability to do that. And certainly, within the realm of nursing, a very competitive environment to recruit nurses.

And I would also suggest that there are also issues within the Reserve realm in terms of being able to recruit reservists of all varieties, whether physicians, nurses, in order to do that as well. And we look forward to working certainly with Congress on incentives that will make that both more attractive and more fulfilling for Reserve duty as well because they are an important part of what we do.

MCHUGH: Thank you. Just while I've got a yellow light, I made a comment earlier that Secretary Winkenwerder suggested that the efficiency wedges in the military to civilian conversion targets were certainly could be revisited. Are you aware of any revisitation happening in that regard, yes or no?

ROUDEBUSH: In terms of within the department revisiting the efficiency wedges, I am not aware of any ticular (ph) activity. I will tell you with the mil to civ conversions certainly all the way up through our secretary, Mr. Wynne, we are concerned what that means in terms of the '08 activity, particularly because we have to certify by virtue of congressional requirement that there will be no detriment to neither access or quality of care. So for us to be able to certify at the secretarial level, we do have some concerns and will be addressing that, sir.

MCHUGH: That's another issue we'll get to. OK. Yes or no, any formal reevaluations (inaudible)?

POLLOCK: Sir, I've been involved in some discussions that they were willing to relook it. But I don't know what specific steps would be required at the DOD level. As a point of clarification on the earlier question, the original mil to civ conversions that the Army faced was an Army decision because of the op tempo they wanted to move more people into the line and away from the fixed or the garrisoned organizations.

So thinking that they would be compatible with conversion to civilian support so that they would have the military strength in the line organizations. But again, some of the decisions we need to relook because what we thought we could hire and what would be available across America have not borne true.

SNYDER: Ms. Davis?

DAVIS: Thank you. I think we're all familiar with unintended consequences. And we really need to look at that.

I wanted to just share one of the concerns that I would have from a number of the families that I've met with. At what point do we think that this begins to effect retention? As we know, families feel that the medical benefits that they get are fabulous. And, you know, they rave about them. And they're very important to them.

But when a mom, you know, can't see the pediatrician or doesn't feel that the pediatrician even understands what it's like to go through multiple deployments or really relate to the military family because it is a civilian conversion, that begins to change their ongoing decisions. And so, I think we just need to be aware of that and make sure that we work to do what we can for those families so they feel that they are being taken care of. Because otherwise, that benefit, you know, to the other person who gets a vote in all this doesn't seem very important any more.

I appreciate it. I know you understand that.

I wanted to ask you about the article in the New York Times Magazine the other day by Sara Corbett. I don't know if you happened to see that about women in combat and women in theater and the impacts of PTSD on women, particularly as primary care givers, but also some of the instances that were cited in the article, abuse to women in theater and how that is being dealt with and how the services are providing the kind of care and support that the women need and being certain that they get that while in theater and then they certainly get that when they return home. Could you speak to that?

POLLOCK: Ma'am, I have not seen that article. But we have looked at the gender differences to see if there are gender differences for PTSD, for example. And they're comparable. They're in the 15 to 20 percent reported rates. And there's been some discussion because women traditionally have been more willing to talk about their emotions, they're more willing to discuss how they're feeling and where they are at any one particular time.

But that's still relatively new for us to look at. And it will require more attention and more research as well.

ARTHUR: I also have not read that article. But I can tell you that there is a lot more that we need to know about women in combat, especially direct combat. This is the first conflict where we've really had substantial numbers, I think, especially as they come back with significant injuries.

And this was brought to me by one woman who asked me how am I going to hold my baby with this plastic arm. And I was immediately embarrassed that I had not thought about those special circumstances that we really need to account for. So there's a lot that we don't know and that the current cohort of women in combat are teaching us.

ROUDEBUSH: Ma'am, I have read the article. And I understand there are some concerns about it. But the issue, I think, is a very pointed and a very valid one.

Certainly, in terms of sexual assault and harassment, we have all taken steps to put advocates and a response system both at home and deployed to be able to attend to that and to be able to address those needs. But there is also, I think, the commander's accountability and responsibility to set the tone, set what is acceptable within a realm. And I think the attention is certainly moving that in the right direction.

Relative to PTSD, there is no gender immunity. And we need to be as concerned regardless of gender. Every individual who is exposed to that needs to have those resources available. So we are certainly attending to that.

DAVIS: Yes. I appreciate that. I think we're all concerned that, you know, for years health studies were done on men and perhaps didn't take in the special dynamics that would affect women. And I think in this same regard, I appreciate your talking about the research because we need to be proactive. We certainly need to be helping our commanders in the field to have a high level of consciousness.

But at the same time, you know, there is a lot that perhaps we don't know. And so, I would hope that as we see some dollars and, you know, perhaps siphoning those off in some way, you know, to be certain that, you know, have we thought about this and make certain that we're really addressing this issue.

ARTHUR: Yes, ma'am. I can -- sorry, General. I can tell you from my initial read of the draft of this mental health task force report that I'm reviewing now this is given a significant amount of diligence in that report and looking at not just what are we doing, how can we do it better, but what should we be doing, what's the model and taking into consideration the entire family. So women's health is highlighted in that report.

ROUDEBUSH: And given the fact that our combat service support are at risk in these theaters. There is no front line necessarily. Everyone is certainly at risk.

DAVIS: Yes. You know, the other thing that we haven't talked about is that even our health care providers, in many cases, are susceptible to burnout and trauma as a result of treating trauma patients. And we need to be thinking about them.

ROUDEBUSH: Ma'am, we need to take care of our medics because every time you put a hand on a wounded individual, you are now part of their life. And there is a cost to that. It can be compassion fatigue. It can be burnout.

As we bring our folks back, we have to pay very close attention to their recovery and their reconstitution, their ability to deal with that because in a microcosm, they are giving and giving and giving in a very fulfilling way to be of service. But it still comes at a cost. And we need to be attentive to that.

SNYDER: General Pollock and Admiral Arthur and General Roudebush, the article that Ms. Davis called to my attention last week is from the New York Times Magazine March 18, 2007, the Women's War by Sara Corbett. And without objection, Mr. McHugh, let's include this as part of our record. And I have no expectation that you all read everything that's in the press out there about men and women at war and their families. But if you would respond for the record to this.

And, General Roudebush, you can have another bite at the apple, too, if you would like, to respond to the record. And hopefully you can work your way through the approval system of OPM in a way that it will be timely in giving to this committee and might be helpful.

Mr. Jones?

JONES: Mr. Chairman, thank you.

General Pollock, I'm very interested -- it might be in your printed testimony. You might have discussed this before I got here. It's one of the more difficult specialties to entice graduates of med schools in the area of orthopedic surgery. Is that a problem in trying to recruit those who specialize in orthopedic surgery?

POLLOCK: Well, we recruit very few who are board certified in orthopedic surgery. Generally we educate our own. And as the other offices have identified, our training programs are often in the top 10 in the nation. So the men and women that we train as orthopedic surgeons are truly phenomenal.

JONES: Right.

Admiral Arthur, it seemed like several months ago I had the privilege to visit the hospital at Cherry Point. And in talking with those in the leadership at the hospital and knowing of all these cuts that you're going to have to deal with and we in the Congress are going to have to deal with, there was a concern. And I don't know if this has taken care of itself or not. And you can answer this.

That as we began to save monies, instead of being open 24 hours a day, we'd be open 12 hours a day. There was concern down at Cherry Point that the fact that there would not be a facility open at night from -- I don't know what the time was. I can't remember. But let's say 12 to six in the morning, particularly with Marines out training, should someone be injured.

Is this happening at more bases than not, that instead of being open 24 hours or having some type of urgent care type facility? What is the policy? And I would ask all three this question. And it can be a very quick answer, if you want to.

ARTHUR: We are looking at what services we can provide based on the projected staffing that we're going to have. At Cherry Point, as I mentioned before, 20 percent of the staff is currently deployed. And we're trying to downsize a bit because, as you know, it's been BRAC'd. We've got Carteret and Craven, which are our main sources of care there. And if an emergency were to occur that requires a surgeon or higher level trauma care, Cherry Point is not the place to bring them, whether it's daylight or nighttime.

JONES: Sure, I understand.

ARTHUR: They should go to those other facilities. My concern is OB care and those other family issues that as we downsize that facility -- and the Marine Corps has plans to increase the number of aircraft in squadrons on that base -- that we provide those families of deployed Marines a timely access to family level care. And we're working through the issues of the network. I know our TRICARE contractor is being very, very diligent there in helping to expand that network to support the families.

JONES: General?

ROUDEBUSH: Sir, over the last 15 years we have closed a significant number of small hospitals because they were both inefficient and, frankly, not busy enough to maintain the kind of currency and competency and there was care available in the community. And in working with our managed care support contracting partners and our community partners we've been able to provide that care in those circumstances.

And relative to the emergency response, we work that in partnership with the communities in which our bases are part of those communities. So it is a collaborative association. And on base in many circumstances, the fire department also has an EMS capability. And we leverage that as well where that's available.

POLLOCK: Across the AMED as well, sir, we have looked at the volume and the competency of the staff that would be there and made the decision in a number of locations to not call them emergency rooms any more because they do not have the capacity that justifies being called an emergency room. But for many folks, because we've grown up talking about well, if you needed care quickly, you went to an emergency room, what we need is access to care when we define we need it. And that's the expectation of the patients.

And that is one of the challenges that we face because they become very frightened when they understand that how they perceive access to emergency care is changing. So it's very important that as we make those decisions we have a very aggressive communication and education plan so that people understand that for what they would need the care is available. We're not eliminating that care.

JONES: Thank you.

Thank you, Mr. Chairman.

SNYDER: I have three more questions which we may be able to move through fairly quickly. And then we'll go to Mr. McHugh and then to Ms. Davis.

And starting with General Roudebush and going down the line, do you have a precise number in your mind about the number of medical holds and medical holdovers that you all are currently following in the Air Force now?

ROUDEBUSH: Yes, sir. In the Air Force, we're following 52 active duty and 256 Reserve medical hold, if you will. However, the definition for medical hold for us is somewhat different than the Army. So there is a small distinction there.

For us our medical hold individuals are those that are at the end of their term of enlistment or service and they have an issue that needs to be attended to before they transit either into the V.A. system or into civilian life. And we work through that before we, in fact, go ahead and either separate or retire.

SNYDER: Admiral Arthur?

ARTHUR: Yes, sir, we have 134 Navy, Marines and one Coast Guard that are involved in OIF- or OEF-related injuries. We have an additional 203 who are in medical hold for other reasons such as cancer and prolonged illnesses. So most of the OIF casualties are housed at the wounded warrior barracks at either Camp Lejeune or Camp Pendleton.

SNYDER: General Pollock?

POLLOCK: Sir, we have approximately 1,000 active duty medical hold soldiers and about 3,200 medical holdover. And so, it depends on where they are in the country. Some of them will be co-located at an installation or at one of the CBHCOs.

SNYDER: No, I understand that, General Pollock. I just wanted to get a sense of the number.

And then the question for Admiral Arthur and General Pollock. This specific issue of there has been some activity in Congress about the events of Walter Reed leading to a proposal to change the BRAC decision with regard to Walter Reed. My own view is that that, I think, would be a mistake. But I wanted to hear you all's perspective since it impacts on both your facilities.

General Pollock?

POLLOCK: Sir, I think that it's very important that we continue with the BRAC. But we must be fully funded in order to do that. Fully funded in order to do that is about $400 million. And that would allow us to truly develop the worldclass facilities that are essential at both the Bethesda campus and down at Fort Belvoir.

And it will also be important that we have relief from some of the requirements and legislation that have prevented us from investing in facilities once it's identified as a BRAC location. So we'll need the funding to ensure that we sustain Walter Reed at a high level throughout that entire transition period.

SNYDER: Admiral Arthur, do you have any comment?

ARTHUR: Yes, Dr. Snyder. I agree with what General Pollock said. We have an opportunity to create a tremendous national asset with the Walter Reed National Military Medical Center juxtaposed to the National Institutes of Health, the National Cancer Institutes with the USUHS, Uniformed Services University of Health Sciences on the property as a great medical school and to build the facility that the national Capital area needs in that location as well as to plus up the Fort Belvoir facility. And this is our opportunity to create a much better facility than either of the two could be as stand-alones.

SNYDER: And my final question is the bill that passed out of the full Armed Services Committee last week and will be on the floor this week that will be called the wounded warriors bill. Have any of you have had a chance to look at it and have any thoughts or criticisms about it. Would you share that with us today?

We'll start with you, General Pollock.

POLLOCK: One of the concerns that I do have and I've shared with the line Army is it's important that we not discriminate against the different warriors. Not all of them are combat injuries. And the ones who are not combat injuries deserve the same level of care as the others. So I just would like to remind you that it's a warrior medical assistance process because we certainly don't want to only take care of our wounded soldiers.

I think that I would like to provide some of the feedback from the staff in writing as your response. And we can do that for you quickly, sir.

SNYDER: Is there anything specific in the legislation, other than the terminology, the title of the bill, a provision that you think specifically discriminates between those who are combat wounded and those who maybe have picked up an illness or something overseas? Excuse me. Go ahead.

POLLOCK: Well, the concern that we have is so many people now -- and now the Congress included -- is using the phrase wounded warrior.

SNYDER: As is the military. Your point is...

POLLOCK: And that's why I said I started with the Army leadership.

SNYDER: Well, your point is a very good one.

POLLOCK: Just trying to make that point, sir, so that we don't cause yet other second and third effects.

SNYDER: I get your point.

Admiral Arthur?

ARTHUR: Only small things that we have looked at so far. One of them is case management. We have a very robust program for case management that isn't only centered on the nurse case managers, but on social work, on administrative staff who are non-medical who support the families and deal with the pay and records issues.

So some of the issues surrounding the case manager and the requirement to be an active duty service member who does that we might want to have reviewed because I think we've got a robust system that's contracted civilian. It's active duty. And I think the purpose of the bill is to ensure that every service member who needs one has appropriate case management, which should include the medical and administrative needs and the family needs involved in their care.

SNYDER: General Roudebush?

ROUDEBUSH: Yes, sir. We, too, use a case manager approach also in our Reserves. We have at the command level case managers who are managing reservists in their communities, if you will, getting their care. So we think the case manager approach is a very good one. And we look forward to working with you to identify both the ratio and the location for medical and administrative family support in terms of case managers.

And also the training activities are identified in the language are good, particularly with the disability evaluation system being sure that our folks that are dealing with that are properly trained. And we'll look forward to that.

And if I could add one comment on the BRAC.

SNYDER: Yes.

ROUDEBUSH: The focus has been on Walter Reed and Bethesda, and very appropriately so. But Malcolm Grow Medical Center at Andrews is a key player in the national Capital area, both in terms of the implications and the execution of the BRAC as well as meeting the needs for Andrews Air Force Base and the key missions that they support. So I just want to be sure that as we pay appropriate attention that that's not lost as we move through.

SNYDER: Thank you. Yes. I thank you for that comment, General Roudebush. Mr. McHugh?

MCHUGH: Well, actually, Mr. Chairman, you took my intended question on BRAC. And I'm glad you did because I think we heard valuable input. And the funding is an absolutely critical component of this, including, by the way, over $470 million if you factor in the cost increases that have been effected by inflation and time, as happens in our economy, of course. So we've got an important role to play there.

Let me just state -- and if any of the members want to comment -- that we've had a kind of challenging history, if you will, between the services and this Congress with respect to military to civilian conversions, particularly as they relate to required -- beginning in 2006 -- required certifications. And we've had some ups and downs and starts and stops and fits.

And suffice to say that right now we're by law have a freeze on military to civilian conversions prior to an expected submission of report that was due in January. I believe it was January 17th. And we're still waiting on that.

Was it you, Admiral, that spoke about you're working on that certification? Can you fill me on a little bit more about what's happening there?

ARTHUR: We are working on that. It's very difficult to certify cost, quality, and access prospectively because quality and cost can be a retrospective look at the lagging indicators, if you will.

MCHUGH: Well, you owe us a retrospective look as well because we required recertification.

ARTHUR: Yes.

MCHUGH: Correct.

ARTHUR: I would say that in clarification these conversions cannot be made until the certification is done. However, the military billets that derive into that process are cut on October 1st. So our military billets are gone by recertification.

MCHUGH: You mean PMAT (ph)?

ARTHUR: Pardon me?

MCHUGH: You mean the PMAT (ph)? I'd say yes, there is a definitional difference between how the services and how you had been instructed that versus how we do. I agree with that. And I don't think that's a call you made, but it's a call I'm very unhappy with.

ARTHUR: Yes, sir.

MCHUGH: Because common sense should tell those who made that interpretation for you that Congress intended that to be outright freeze. And if you're losing the billets, you're losing the people. I mean, that's a conversion.

ARTHUR: No, sir. The billets are gone October 1st.

MCHUGH: Yes.

ARTHUR: And even if we were to convert, we don't get the conversion money until third or fourth quarter.

MCHUGH: I understand. But that wasn't your decision.

ARTHUR: No.

MCHUGH: It was somewhere else.

ARTHUR: Correct.

MCHUGH: The conversions or the certifications are something we're waiting for. So we're going to get them, right?

ARTHUR: It is at the secretary of the Navy level at the moment.

MCHUGH: OK.

How about the Army? Do you know, General?

POLLOCK: I know it's with the undersecretary, sir.

MCHUGH: All right. So they're out of your shop?

Is that the same for you as well, General?

ROUDEBUSH: Yes, sir.

ARTHUR: Yes, sir.

SNYDER: OK. Thank you.

Thank you, Mr. Chairman.

SNYDER: Ms. Davis?

DAVIS: Thank you, Mr. Chairman. And I know we have more panels, so I'll try and be brief.

I wanted to just address the issues around the Guard and Reserve and the fact that we have so many men and women returning to communities that may be somewhat remote and with difficulty of receiving the kind of follow-up care that they might need. How do you see that that's being addressed? And do these conversions effect that at all?

ROUDEBUSH: Ma'am, I can speak for the Air Force. For our reservists, our Guard and Reserve, we keep them on status. They are put on MPA days, which keeps their full benefits and entitlements coming while we work through with them in their communities the health care issues that are identified. So we use case managers at the MAJCOM (ph) level that deal with these folks on a daily or weekly basis to make sure that they are getting the care that they need and that their circumstances are properly adjudicated and come to a good conclusion. So for us...

DAVIS: Was there a tendency at the beginning to not have them return to their home communities? And I know their families were...

ROUDEBUSH: No, for us in the Air Force that's the way we have worked it by policy. And that also puts them back in their support realm where their commanders can attend to them as well so that we have that support structure in place. But that is the Air Force policy to do that and has been.

ARTHUR: Navy and Marine Corps do very much the same. We send them back to their home units. And we have case managers in the Navy and Marine Corps who follow each and every member.

DAVIS: Do you feel that the support is there, they can get the care that they need?

ARTHUR: I think it is because we have the case managers who keep track of each patient and know when their appointments are. If they need to be kept on active duty because of continuing medical issues or surgery that's needed, we do that. So we only let them go back to their home stations when they are stable and healing and we're following their progress prior to a medical board.

DAVIS: OK. I guess part of the concern would be in defining whether they're going to stay in the service or not and what that transition period for the V.A. is.

ARTHUR: Yes.

DAVIS: And I appreciate that issue. And just quickly, I think you spoke to the need to anticipate the needs of the service members and so that we're embedding some of the behavioral health providers in units. I know that in San Diego -- and I think that we're going to hear from Mr. McIntyre shortly.

But what they're doing with the special forces there is to embed a nurse with the unit because they felt that actually they weren't getting some of the care, that that had been a problem. Do you see that? Or do we have special forces units, for example, that, in fact, have missed out in some ways on some of the care that they should be receiving?

ARTHUR: The special forces units, the Seals in the Navy have made a decision that their health care providers are going to be from the Seal units. They will train their own health care providers. So they don't use Navy corpsmen far forward. They use Seals that they've specifically trained to be paramedics.

I applaud Mr. McIntyre's efforts to get that nurse embedded with the units. I think it's very innovative. And I think it speaks to the integration of our TRICARE contractors with our military treatment facilities and the dedication of, especially Mr. McIntyre and his focus on supporting the war fighter and their families. He saw an opportunity and supported it as well to support the comprehensive combat casualty care center that's just been opened at Balboa, which is a collaboration between Balboa, Camp Pendleton Naval Hospital, the Veterans Administration, and TriWest as the TRICARE provider.

DAVIS: So hopefully we'll see more of that kind of activity?

ARTHUR: Absolutely. Put the patients closer to home so that they can be properly supported.

DAVIS: OK. Thank you very much.

Thank you to all of you.

Thank you, Mr. Chairman.

MCHUGH: Mr. Chairman?

SNYDER: Thank you, Ms. Davis.

Mr. McHugh?

MCHUGH: If I may, just for the good of the order, a little housekeeping here. The staff has identified on the New York Times Web site an addendum, a correction to one of the cases that existed in the article that you have very rightly, and I think appropriately, included in the record. I think just for procedural sake -- and I don't think it in any way changes the overall challenge presented by the article. But this correction as appearing on the Web site ought to also, without objection, be included.

SNYDER: Without objection, we'll include that in the record also.

MCHUGH: Thank you.

SNYDER: So that you all can respond to the article plus the addendum in total.

Anything further, Mr. McHugh?

MCHUGH: No, thank you.

SNYDER: OK.

Ms. Davis, anything further?

MCHUGH: God bless you.

SNYDER: We want to thank you all for being here.

General Roudebush, I appreciate you letting me use you as a pawn today in my discussion about the tremendous service that all our men and women in uniform and their families give in terms of well beyond what most of us perceive as the American work week.

And, General Pollock, I neglected to mention that I spent a couple of unexpected nights at Tripper Army Medical Center some years ago and probably received the best advice I have ever received in my life from a cardiologist there. And I appreciate your service and also you stepping forward at a challenging time in the position that you're in. We appreciate you being here today.

And, Admiral Arthur, our gratitude to you for your 33 years of service to the Navy and to the country. And I look forward to seeing you again, perhaps not testifying before this committee, but we appreciate your efforts and everything you've done for the Navy.

ARTHUR: Thank you.

SNYDER: And, Mr. McHugh, why don't we say we will pick up here in precisely five minutes and give everyone a chance, including our next table of witnesses, a chance to bust for the restroom if they need to. But this will be in military five minutes, not congressional five minutes. So we really will be back here.

Let's resume our hearing.

And, gentlemen, we appreciate your patience and appreciate your attending the first session. These issues are obviously very important, not just to this subcommittee, but to the American people. And we appreciate you being here.

Our second panel is Mr. David McIntyre, Jr., who is the president and CEO of TriWest Health Alliance, Mr. David Baker, the president and CEO of Humana Military Health Care Services and Mr. Steve Tough, the president of Health Net Federal Services. And we will begin with Mr. McIntyre and go down in that order.

And as I instructed the first panel, we will have David put the light on, but that's just to give you an idea of the time. If there are some things after the five minutes that you need to tell us, don't let the red light stop you from sharing those with us.

So, Mr. McIntyre, we'll begin with you.

MCINTYRE: Good morning, Mr. Snyder, Ranking Minority Member McHugh, and Congresswoman Davis. Thanks for the invitation to appear before you today. It's an honor to be here to talk about how our organization in collaboration with TRICARE regional office West and our West region military treatment facility partners are doing whatever it takes to make good on the promise of TRICARE for those that reside in the 21-state region, more than 2.8 million beneficiaries.

Together we're taking a concerted proactive approach towards ensuring that these most deserving individuals have access to quality care and dedicated customer service, that which they have earned. I request that my written statement be accepted for the record. It details much of the work that we've accomplished with regard to communication and education of both beneficiaries and providers, our robust behavioral health initiatives, our comprehensive formalized program to partner effectively with the direct care system, a program we call JASUP (ph), which is affording facilities in our region to do a make, buy business case and much more.

Our overall environment in the West region is one of success. It's come from collaboration and as a result of the partnership that we together have built and maintained in our ongoing effort to leverage the strengths of our colleagues for the benefit of our joint military family customers. It's on these successes that I would like to concentrate my oral remarks today.

Our provider network, which exists to serve as a resource and in some cases, a safety net for the military treatment facilities, has grown, and we continue to enhance its ability to serve our beneficiaries. Our 18 owner organizations also serve in the local West region communities as our network subcontractors. I'm pleased to announce that our network is growing 1 to 2 percent a month, and we are now to 117,000 providers across the 21 states. And it's an example of the power of progress inherent in this collaborative focused partnership.

Seeking to make sure that the network reaches into the communities where there is a substantial presence of Guard and Reserve we have called on the 21 governors of our region to join with us in thanking the doctors that are part of our network today and encouraging the others to reach out and support their fellow citizens in the state, much like, Mr. Chairman, the concept that you put in the AMA News a year or so ago. To date, 15 governors from our states have stepped up and done exactly that. Working together we've been able to grow the network, particularly in the outlying communities, to make sure that the Guard and Reserve have a robust network on which to rely.

In the OB area, an issue of focus for this committee a couple of years ago, we placed substantial effort along with TMA to try and get them to change the rates so that in no state did we have OB rates that were below Medicaid as it related to TRICARE. Seven of those states of the nine were in our region. I am pleased to say that the folks at TMA did a great job with the involvement of this committee in addressing that issue. And we've now grown that network by 71 percent in our region as a result of the policy change.

And we thank you on behalf of all of the families in our region for your work, especially your leadership personally, Mr. Chairman, in this area.

In spite of all these successes, we are seeing challenges, as mentioned by Congresswoman Davis, with behavioral health. A 5.8 percent cut in reimbursement rates is absolutely unsustainable in terms of making sure that the providers rise to the occasion in our region and come alongside those that have increasing demand in this area. I think, like OB, we have a problem because of the anomaly of Medicare and particularly given the growth of demand that we're seeing in this area.

For the Guard and Reserves, we continue our aggressive outreach. As many units within our region were activated and mobilized overseas and to our borders, we joined forces with TRO-West to vigorously pursue numerous opportunities for educating and growing the beneficiary base. We've also done a couple of innovative things with the Guard and Reserve. We put DVDs out to all the families.

We're in the process of releasing the second version that's aimed predominantly at children and their parents. We've embedded the combat stress team concept in the California Guard as a test. As Congresswoman Davis was talking about, that's being met to much success. And we also have an integrated project in Hawaii that links med surge and behavioral health together.

As was mentioned previously, we now are focusing on those that are at the sharpest point of the spear. And that's the special operations teams. I've had the ability to visit with the head of the Navy Seals and to talk about the challenges that they face and their families face in making sure that they don't drop through the cracks. These are folks, as we all know, who bear a disproportionate burden because they are often called at night and leave the next day.

Their families don't know where they're going. They don't know when they're coming back. They don't know how long they're going to be gone.

The Seals tell me that they're suffering nearly a 40 percent casualty rate. And they're on average on their ninth deployment. It's very important that all of us continue to look for those gaps in the areas that we together can plug and make the system sharper for all. And I'm excited about the work that we're doing together in our region in that area.

Lastly, in response to the Walter Reed situation, we freed up $1 million a couple of weeks ago, reached out across our region to ask how we might be of assistance to our military partners. One of the things that I'm most excited about is something that we're starting with the Navy and the Marine Corps in the West. And that's what I would call an integrated care management prototype.

We are actually taking the concept that we're in the process of working with the Seals and embedding that together with the Navy and the Marine Corps in our region up and down the West Coast. We have a seat at the care management table. That allows us not to drive where a patient goes because that's not our decision. It allows, though, for us to look as a team end to end on what the needs of that patient are and where it's possible that we might be able to place them in the private sector network if there is not capability and capacity available in the V.A. system.

And so, we're very excited about that. It's just starting underway this last week or two. And we're looking forward to doing our part.

At TriWest, we believe that the successful delivery of services is a cooperative approach, a joint effort among all the stakeholders in our region: our company, our owners, our TRO-West leaders, our civilian and military medical partners and you. By working together with our beneficiaries' best interests in mind, we can make this program more effective.

I'd last like to offer one thought on the budget as I close. And that is we do have challenges. And I think that it's fair to say that none of us, not you, not the services, not ourselves anticipated the kind of demand that we're looking at. While I know it was politically complicated last cycle, I believe that it's time to reopen the question of whether there should be mandatory home mail delivery of pharmaceuticals.

That's not a change in the benefit. It's a change in the delivery of a product for maintenance drugs. It's been done for the V.A. for some time. And you can pick up somewhere between $600 million and $1 billion by doing that. Thank you very much.

SNYDER: Mr. Baker?

BAKER: Thank you, Mr. Chairman. Dr. Snyder, Mr. McHugh, Ms. Davis, thank you very much on behalf of the dedicated men and women of Humana Military Healthcare Services for the opportunity to update you today on the state of the TRICARE program from our perspective. I've provided a written statement for your consideration.

SNYDER: I should have said earlier, Mr. Baker, all the written statements from both the previous panel and this panel will be made a part of the record.

BAKER: Perfect. Thank you very much, Mr. Chairman.

SNYDER: Without objection.

BAKER: For background, our company was awarded its first TRICARE contract in 1995. And we began serving military beneficiaries in 1996. Since 2004, we've been administering our current TRICARE contract for 2.8 million TRICARE eligible beneficiaries in DOD's South region of the United States.

And though it does not seem possible, on Sunday, April 1st, we will begin the fourth option year of our five-year contract. And as we begin the new option year, it's my feeling that the operational status of TRICARE is excellent, thanks in large part to the tangible support of this subcommittee, the oversight of the Department of Defense, and the superior service being rendered by your contractor partners, especially those represented on this panel to my right and left.

I believe active duty military personnel, retirees and their family members have exceptional access to a rich array of high quality health care services that are being delivered as cost effectively as possible. Service levels are outstanding. Processes are stable. And all available evidence indicates high satisfaction among TRICARE members.

Mr. Chairman, my written statement highlights the status of the program across several domains, including cost control, clinical quality, access to health services, and service to the deserving members of the military community, both active and retired. And I've provided examples of processes and programs that we have successfully implemented in the South region under the current contract structure. I'm happy to report that after some initial disruption during startup these processes and programs are working very well.

And I chose this array for my statement cost, quality, access, and service, because it reflects the objectives of the TRICARE program as originally set forth by both the Congress and the Department of Defense a decade and-a-half ago. To be sure, there are challenges for the program, particularly today. But the important point is that today's TRICARE program has been able to meet the challenges of a changing world environment.

Against that backdrop I'm aware that this subcommittee and others on Capital Hill are carefully examining the delivery of health care to our service members and veterans alike and that the TRICARE program undoubtedly will be subject to careful scrutiny. I applaud those efforts.

But as you go about your critical work, please bear in mind that today's TRICARE program is working very well. We at Humana Military Healthcare Services look forward to working with you and with our Department of Defense partners to continue fulfilling the promise of TRICARE for many years to come.

Again, Mr. Chairman, please allow me to thank the subcommittee for the opportunity to be here today. And I look forward to your questions.

SNYDER: Mr. Tough -- and I am pronouncing that correct? TOUGH: That is correct, sir.

SNYDER: Mr. Tough?

TOUGH: Thank you. Good morning, Chairman Snyder, Congressman McHugh, and Congresswoman Davis. And I appreciate, as was stated by my colleagues, to be here this morning to share with you perspectives in experience with the TRICARE program and in particular, the Health Net experience. Let me begin by giving you some background about the Health Net Federal Services and the dedicated 1,700 employees who are focused and clearly targeted on delivering high quality benefits and services to the beneficiaries of TRICARE.

Health Net has a long history in working in partnership with the Department of Defense. As Foundation Health Federal Services, we were the first company to develop comprehensive managed care programs for military families. Under the first Champus reform initiative contract, a precursor program to TRICARE, we provided health care services to DOD beneficiaries located in California and Hawaii.

During the first generation of TRICARE contracts, Health Net administered three contracts covering five regions, 11 states, and 2.5 million TRICARE beneficiaries. Under the current TRICARE contracts, we administer health care services in the TRICARE North region, which includes 2.9 million beneficiaries in 23 states primarily in the Northeast. In addition to our North region contract, our sister company, MHN, provides behavioral health counseling services to military members and families through a number of contracts with the Department of Defense.

These services include military family counseling, rapid response counseling to deploying units, victim advocacy services, and reintegration counseling. We also perform a number of health care- related services for the Department of Veterans Affairs. And through these various programs, we have helped the V.A. save over $150 million since 1999.

The primary underpinning of the success of the TRICARE program is our partnership with the military health system. Our 19 years of working with the Department of Defense gives us a clear appreciation for the need to understand and be aligned with our government customer and continuously work to improve, tailor, and integrate our services to be most responsive to the evolving needs of the health system and the beneficiaries we serve.

We do this by working in close collaboration with the department, the military services, maintaining strong relationships and open and proactive communications with the beneficiary associations and by tapping into the advice and counsel of a group of former military, senior military leaders throughout the TRICARE advisory board. Based on our interaction with these groups as well as our strong performance levels, our perspective of the current state of the TRICARE program is that the program is working exceptionally well. And let me expand on some of the key points.

Health Net and the TRICARE regional office North have fostered a strong collaborative relationship. This relationship ensures open, honest, transparent communications as well as a clear understanding on our part of the goals and expectations of our customer. It also helps ensure that we prioritize our initiatives appropriately, focus on those that help DOD achieve and even exceed the TRICARE contract objectives.

For example, we have been working actively in concert with numerous initiatives to improve on health care costs and quality for the TRICARE beneficiaries. One such initiative is a collaborative effort undertaken recently to increase TRICARE mail order pharmacy usage. I'm sure you're aware that DOD achieved significant savings on prescription drugs purchased through the mail order pharmacy program. And that's because the DOD has access to the federal supply schedule for pharmaceuticals under the mail order program but not to the retail pharmacy outlets.

To help DOD encourage the use of mail order program, Health Net implemented a multi-faceted approach at no cost to the government. This approach had several components: educational efforts targeted to beneficiaries in our disease management, case management, and transitional care programs, an educational program that targeted our high volume providers with low TRICARE mail order pharmacy penetration and offering e-prescribing tools to a select group of network providers.

These efforts have resulted in a demonstrative increase in the pharmacy -- the overall (ph) pharmacy usage within the North region up 25 percent over the past year. We talked about earlier about the performance excellence. This generation of TRICARE contracts contains a number of performance standards that exceed those used in the commercial health care marketplace. Even though these standards are higher, we are either meeting or exceeding those standards. And I'll just give you a highlight of a few.

Beneficiaries calling our toll-free customer service line on average are connected to a customer service representative in four seconds. Health Net now obtains nearly 78 percent of network claims electronically. This is significantly higher than the average commercial mass care experience of 55 to 72 percent. Health Net tries to minimize provider hassle factor paying providers promptly, on average paying within six days for claims submitted electronically, 13 days for paper claims and within two days for Web-submitted claims. And referrals and authorizations are processed within two days.

The efforts to reduce the provider hassles seem to be paying off. Our network is robust. We have nearly 100,000 contractor TRICARE providers servicing the TRICARE North beneficiaries. This number is up by 35,000 or 53 percent since the start of the service delivery in September of 2004.

Regarding the beneficiary satisfaction levels, this program is also performing well in this area. Beneficiary satisfaction with the TRICARE program remains very high, higher than with commercial or other governmental agency programs, according to a recent survey by the Wilson Health Survey Group. Of all the plans and programs included in the Wilson survey, TRICARE was the top rated health insurer in member satisfaction for the fourth year in a row. The results are consistent with surveys of TRICARE users performed by the TRICARE regional office North, which have also found high beneficiary satisfaction levels.

For the past five quarters all beneficiary satisfaction levels have averaged between 87 and 88 percent. Additional proof that the program is working well is the survey results of MTF commanders. For the past five quarters, overall MTF commander satisfaction has averaged 86 percent. However, I'm pleased to report the most recent performing quarter Health Net received a 94 percent satisfaction rating from the North region MTF commanders.

Earlier I mentioned our 19 years of experience with DOD has taught us the value of understanding our customer and aligning with the objectives of the military health system. Again, we do this by tailoring our services to meet the unique needs of the MHS. Perhaps the best example and the one of most interest to this committee, based on the recent events, is the way we stand ready to help and support the health care needs of our active duty service members.

While, as you know, the active duty service members receive most of their care from the direct care system, we do provide a number of important support services. As you know, we support the facilities in the national Capital area which include Walter Reed Army Medical Center and the National Naval Medical Center in Bethesda. (inaudible) we provide an extensive network of civilian health care providers to augment the services at the MTF.

We also operate a TRICARE service center onsite at each military treatment facility to provide customer service, including enrollment, claims, and referral assistance. The TRICARE service center at Walter Reed averages over 600 beneficiary visits per month.

We provide a full range of medical management support to the wounded warriors and other MHS beneficiaries referred out to care within the civilian network. These include benefit review, customer support and service, transitional care, case management, and discharge planning. Specifically at Walter Reed, Health Net has been participating in various committees and tiger teams developing solutions for implementation where appropriate.

Our medical management and field operations team are assisting with the training of the wounded warrior transition brigade case managers. And our behavioral health company, MHN, has readied three licensed clinical social workers to provide additional social service support at Walter Reed.

MHN has also identified additional experienced consultants who can be made available on short notice. These social work consultants are experienced in providing non-medical supportive consultation services to active duty members and their families. If requested, Health Net is prepared to provide additional support to support the Walter Reed Army Medical Center and our nation's wounded warriors.

Another way we provide support to both active duty members and their family members is through reintegration counseling. We provided this service in response to the reintegration and redeployment needs at installations where large numbers of returning troops called for greater support for health care access and coordination. This support also extends to the Guard and Reserve members.

MHN for the military family counseling services contract provides short-term, face-to-face problem resolution for military personnel and their families with over 150 counselors on sites at military installations across the United States and overseas. MHN provides rapid response counseling to the National Guard and Reserve members and their family members to help them best cope with the stresses of deployment or reintegration to the civilian life after deployment.

There are two other examples of our tailored approach that best meet the needs of the department and the TRICARE beneficiaries and include our involvement with the Fort Drum regional health planning organization and our efforts to advance disease management and consumer empowerment. My written remarks go into both of these initiatives in much more detail.

On the disease management and consumer empowerment front we have been talking with the Department of Defense about establishing a program to pilot the use of commercial decision power program as an enhanced disease management, consumer empowerment service that helps members better manage their own health care, navigate the complex health care system, and have a more proactive and productive discussion and interaction with their physicians.

In closing, I would like to thank you for inviting me to testify before this committee today. The TRICARE program is stable and performing exceptionally well. And we're very proud to be a proactive and coordinated partner with the MHS system. Thank you.

SNYDER: Thank you, gentlemen. And we'll put ourselves on the five-minute clock again. I think all three of you were here. I saw Mr. McIntyre and Mr. Baker in the audience.

You were here also, Mr. Tough, during the preceding testimony. Is that correct?

TOUGH: Correct.

SNYDER: I wanted to give you all a chance to make any comments that you might want to with regard to anything the surgeon generals said, particularly with regard to their -- what we referred to as -- wedge efficiencies and so on.

Beginning with you, Mr. McIntyre, anything that you heard this morning that you'd like to comment on?

MCINTYRE: I think that you all put your finger on the topic of relevance for the direct care system. The challenge is how do you make the system more efficient in its use of resources. But from the services' perspective, at least our perspective has been they suffer for the ability to hire people on a contracted basis, oftentimes taking as much as 18 months to find people, if they can find them at all. And staying attuned to that issue and pushing through the detail, I think, is going to be very constructive and very useful for the system itself.

SNYDER: Mr. Baker?

BAKER: I would echo Mr. McIntyre's comments and the comments of the previous panel members. As you know, Mr. Chairman, I go back a long way in the military health system. It has always been my belief that it is better to deliver care to military family members, to military members, and indeed to retirees, better to do so when possible in the military system. Our TRICARE contracts are established in a way that incentivizes us to try to make that happen.

I urge the military departments to look carefully at the notion of conversion to civilians and indeed the reduction in military medical personnel. I don't think that serves the system well. As one of the panel members indicated a moment ago, care is going to be delivered. The question is will it be delivered within the military system or within the purchased care system. I believe this nation is better served if it is delivered within the purchased care system.

SNYDER: Mr. Tough?

TOUGH: Yes, thank you. I would agree with both David and Dave. You know, it's important to keep in mind that there's a dual mission of the military health system. It's military readiness, military medical readiness, and peacetime health care delivery. And so, it's important that we have that MTF as that centerpiece for care.

And certainly, one of the primary objectives of this contract is to optimize the military treatment facility. And it's difficult to do that with a declining base of active duty military medical personnel.

SNYDER: I wanted to ask about the reimbursement online. I think all of you would be in agreement that over the last several years the reimbursement to providers has gotten more efficient. Would you all just briefly describe how you have done that?

How do you handle those small practices that are still struggling a bit with the electronic age? Is it a paper claim? Or do you have a program where you actually install a computer yourself for access? Again, if you'd just make this brief, if we could. Just go down the line.

Starting with you, Mr. McIntyre.

MCINTYRE: It is a challenge for small practices. My father actually retired as a surgeon a couple of years ago, not because of loss of dexterity, but because he didn't want to go through the cost of converting and suffered for the fear of what (inaudible) was going to bring. And, you know, it really has to be worked practice by practice by practice.

And what we did is we've started with the highest volume practices and are working our way down that list, not because the smaller volume aren't important. But the larger bang for the buck from a taxpayer perspective is to move those things along more readily where there's higher volume. And we're finding success with that.

I was involved a couple of years ago in an effort to wire offices. The challenge is when only 3 percent of the services that a practice provides are to this population. Why would you retrofit your entire operation by involving software that you're only going to use 3 percent of the time?

And so, it is a little bit of a challenge. I'm not sure we're ever going to get to the last mile, which is the smallest doctor's operation with the smallest volume. But we've seen a dramatic change in the amount of electronic submission since we've started this contract a couple of years ago.

SNYDER: Mr. Baker?

BAKER: I would echo Mr. McIntyre's comments. We, too, have had a strategy. In fact, a TRICARE contract has incentivized us to try to move from paper to electronic submission. In our region now for all providers, or all care rendered, rather, we're hitting over 73 percent of the claims are being submitted electronically.

But just as Mr. McIntyre has done, it's often been by the ones. It's started with those providers who had the highest volume of TRICARE claims. They were the ones most interested. And we've tried to make it as easy as we possibly can. We continue to work that every day.

There are simply some providers, though, who are never going to come onboard. Because averages are a bit misleading. In our region, we have over 42 percent of the licensed providers are in our networks. And part of the deal there is that you agree to submit your claims electronically. But they're responsible for 3.7 percent of the population of the region. So that disparity in some areas, some practices have high volumes. Others have very, very low volumes.

We just have to demonstrate to them the benefits of the electronic filing, the statistics that Mr. McIntyre referenced and indeed Mr. Tough referenced about speed and accuracy and payment and so forth and the cash flow advantages seem to resonate. But it's a game of inches.

SNYDER: Mr. Tough, anything to add?

TOUGH: Yes, just similar comments. Again, we try to pick them off in order of the highest volume. I think David McIntyre's comment about small percentage of TRICARE beneficiaries in an office practice will not necessarily drive up an individual physician's interest to specific activities that might work more inclined to electronic communication, electronic transfer of claims.

The Web-based efforts we've undertaken -- we have about 8 percent of our claims on Web-based transactions. If we can get providers to consider that, that's a fairly simply way to transact claims with us. It also is the fastest turnaround, two days to pay.

SNYDER: My time is up, Mr. Tough. But so I understand you, when you say Web-based, you mean that the physician's office would not necessarily have to have any new software or anything. He just would go to your Web site with a code and be able to enter it in even if they have a paper-based records system in their own office. Is that a fair way of describing it?

TOUGH: Yes. There is an express claim process that we've built with our subcontractor at PGBA. And it allows for that kind of ease in transaction.

SNYDER: Mr. Jones?

JONES: Mr. Chairman, thank you. And I couldn't help but think -- I've been here 13 years, seven terms. And I have Camp Lejeune, Cherry Point and Seymour Johnson Air Force Base. And I want to say to you and your companies and corporations that you have made tremendous progress in a very difficult system. And you've talked about it today in certain answers to the chairman with, you know, electronics.

And I realize that no system is perfect. But I would have to say that you have made such progress. And who benefits? The user. And that's our military and our retirees. And you certainly have done a tremendous job.

I want to go to one statement that Mr. Baker said that I think General Pollock, who just left -- you know, we all realize that this nation is in serious financial shape. I mean, I don't care which side of the aisle you're on. Anybody that would look at the debt -- when I came in 1995, it was $4.9 trillion, $4.6 trillion in debt.

It's well over $8.3 trillion. And if you talk to David Walker, who has spoken to this committee, subcommittee and committee, you know, he will tell you that the true debt is probably somewhere around $50 trillion.

Not only do we have to provide the quality of medical care to our military, but we also have to make sure that they're getting the best value for the dollar. Which, that's your responsibility. And again, I compliment you on that.

Mr. Baker, you made the statement that, you know, at some point in time -- at least I interpreted it this way, and I could be mistaken. At some point in time when you have to make the decision of whether the military is going to have to make some very difficult decisions as to the quality of care on base -- and we heard General Pollock talking about, you know, pediatrics and OB/GYN -- those services now are pretty much out in the public more so than it used to be.

And then she also mentioned that it's going to be an education process, that from the standpoint of the services that you used to have on base. Let me explain that. Used to have on base we now don't have on base. So therefore, the education to the quality of life -- I'm not sure you can answer this question, but I'm going to ask it anyway.

What do you see 10 years down the road? And this is your personal opinion. It's not your professional opinion. Or it could be. What do you see 10 years down the road for your industry in providing the service and what the military can provide knowing that we've got some very, very difficult decisions to make, whether we have the war on terrorism or it's all been over? We've got some really difficult times based on the economy of this country and what the government has to spend.

We'll start with (inaudible).

BAKER: Sir, I'm humbled that you would ask my opinion on such a question. And I'd be the first to say that my crystal ball is not only cloudy, it's probably scratched up a bit. So it's really hard for me to make that kind of prediction. I think the outcome is going to be predicated on the kinds of decisions that were discussed with the earlier panel. And that is the future of the direct care system.

I mentioned to the chairman that I've been around for quite some time. I had a full Air Force career as a health care administrator and actually grew up in a military family. So I've seen the military health system all my life. And I can tell you that one of the things I have seen during my life is an ongoing contraction of the size of the military facilities on installations, the scope of services provided.

General Roudebush made mention of the Air Force and some of the changes that have occurred with the small community hospitals over the years. I saw a statistic not long ago that really drove things home. And forgive me if I don't have the numbers exactly right. But somewhere a little over 100 hospitals among the three services being operated. I remember a day when the Air Force operated 120 facilities.

So if we follow the same glide path, it strikes me that we're going to continue to contract. The people who can change that are resident in the Congress and they're resident in the Pentagon. And I urge them to look very, very carefully at what we're trading off.

JONES: The other two gentlemen?

MCINTYRE: If I might, Congressman Jones. I think as Mr. Baker said, you put your finger on an important issue. And I, too, have somewhat of a warped crystal ball. I started my career on Capital Hill doing health policy on the Senate side for a decade before I came to do operations. And I grew up in a health care family, my father having served in the Army at Fort Bliss for a while while I was a child.

I look at this from the standpoint of what is it that we can afford and how is it that we properly make the right make, buy decisions. In my own company, I buy spikes or surges in a contracted way. I staff to the average. And I came to that conclusion -- and I've now been running this company that I built for a decade. And I came to that conclusion when I started looking at the spikes and the changes in my budget from cycle to cycle. And I started to come to the conclusion that I need to figure out what are those averages and how do I make that work.

And the first responsibility, as we all know, that the military health system has is to be ready to support the war fighter as they go into combat. The second responsibility is to make sure that they've got caseload that will give them the capacity to keep those skills sharp and to serve basic needs of the family. And then the third is to either build or purchase the rest of that care.

And I think that one of the challenges we have together in this environment is what is the right make, buy analysis. How do we do that right? And how when we look at this over the complexity of the federal debt -- and that was a topic when I was working for Senator Gorton in Washington state in the mid-'80s when we lost the Senate on the Republican side over the debt issues and our reaction to the debt issues or the members' reaction.

I think the challenge is to look at the system on the totality of the budget, not just firewall component parts and get all the pieces at the table to include the V.A., to talk about the care from end to end. How do we leverage where the DOD spent money, for example, to pay the three of our organizations to build massive provider networks to support the DOD's direct care system when they have to surge?

Why would the V.A. be buying with a different checkbook? Why wouldn't we size it together? Why wouldn't we buy one way? Why would we not only spend one check of the taxpayers' rather than two? And I think the examples of that go on and on.

And I think my hope is that the heat of Walter Reed and the fire and the focus has all of us backing up together and asking the kinds of hard questions that you all this morning have been asking of all of us, those of us that contract, those of us that support in that area, the V.A., the DOD, and Congress coming together to talk about what's the right way for us to do this for the next century, not for the one we've been through.

TOUGH: If I can take a moment and add, agree with my colleagues. Again, I have 19 years of experience with this same contract. And I reflected back as Dave Baker and David McIntyre were talking and said I can recall when the Champus reform initiative contract was started in California and Hawaii. Letterman Naval Hospital, Oakland, McClellan, Maither (ph) -- those facilities aren't there anymore.

So I think the key is really what is the basic floor of what's needed for military readiness and to prepare the war fighters for the military medical system for war fighting and combat. And I think that's a question that needs to be solidified because, again, we see a retraction of the system.

I would also agree with Dave McIntyre's comment about joint spending. God save me for using this term, but there is a need for, you know, a common checkbook. We even see it a little bit in today's contractors. There is the military health system activity, and then there is the civilian health care spending.

And I think if we look more jointly as to that as being one common checkbook and how we would best manage those assets in make, buy decisions, then we can decide exactly what we want to purchase in the military health system and exactly what we want to purchase in the external system and then configure those purchases in different kinds of ways. Dave's taken it a step further in embracing the V.A., which is yet but another dimension of government spending.

JONES: Thank you very much.

Thank you, Mr. Chairman, for that time.

SNYDER: I have to share this anecdote with you. But it was some years ago prior to -- I don't' know, seven years ago or something. And I in my early '50s came down with appendicitis when I was here and was referred to Bethesda Naval Hospital.

And it was about 2:00 in the afternoon. And I'm laying on a stretcher looking at a bunch of people looking down on me. And the surgeon who was going to do the surgery said we've got a slight delay on an operating room availability. He said let's spend that time talking about military medicine. Now, that is lobbying. I don't care (inaudible). That's lobbying.

And I appreciate the discussion that's going on. I think it's an important one. I think back to a friend of mine who maybe still is, but was in the Army Reserve and had a solo private practice as a family doctor and was mobilized during the first Gulf War and was struggling, scrambling trying to find someone to cover his practice and I don't think did. And I think his life -- I mean, he loved the military and loved the participation. But it was a big, big hit on his family and his business, which was a solo medical practice because we can talk about it's great to have these Reserve medical people and we can surge them when we need them, forgetting what's left behind. So that was...

MCINTYRE: A lot of providers lost their practices during that period.

SNYDER: Right.

MCINTYRE: I was on the Senate staff at the time. And it's one of the reasons why the deployment cycles for doctors have changed in the Reserves.

SNYDER: Yes.

MCINTYRE: Was to reflect that burden.

SNYDER: I wanted to ask specifically, again, a brief question for the three of you.

I think, Mr. McIntyre, you talked the most about the improvement that's been made specifically in obstetricians, which I appreciate. As you are looking ahead now rather than back, what do you see as the needs that you're facing with regard to either numbers of providers or geographic areas with regard to providers or specialty needs with regard to providers? Is there any gaps that you see out there or issues that are facing you in the provider issue? Shall we start with Mr. Tough just to...

MCINTYRE: Sure, go right ahead, yes.

TOUGH: Actually, certainly, in low supply areas we're always going to have some difficulty in gaining access to providers because providers in low supply areas have choices that they may wish to make. But in terms of gaps, we haven't seen as many gaps as early on in the program. And I think a lot of that has to do with the fact that a lot of the other improvements that have occurred in the relationships. The streamlining of the relationships has helped.

We always have a concern regarding compensation. So that's going to be -- it's an ongoing issue. And quite frankly, we live with some concern that Medicare can change a reimbursement on us, and then we're off running trying to figure out how to resolve relationships with providers.

I see the one that's coming downstream, the one that concerns us the most has been talked about here earlier is in the mental health arena. We have about 800 mental health providers, different kinds of categories from physicians to psychologists to licensed clinical social workers. But I think to strike to the point, the current circumstances of the war on terrorism has created some added stress.

We're in an environment we haven't seen in an awfully long period of time. And I don't think some of the mental health issues or the family issues are going to surface for a while, whether those are child issues or spousal issues or other kinds of mental stresses and strains that exist. And I think that's the one area that we have the most concern.

We have some pocket areas, as you know. We talked a little bit about the Fort Drum area. We've got a special effort that's being undertaken with the Fort Drum regional health planning organization. And we're very dedicated and focused on that community in particular. We've done some gap analysis work with the community.

It's one of the few communities, quite candidly, that I've seen a totally engaged and embraced effort by the medical community, the military system, and ourselves to try to find the best way of meeting the needs of that military system up there as well as the community at large. But we are, in fact, working on mental health case workers to bring into that community specifically to respond to the, we know, the ongoing up and down pressures of deployment, redeployment.

SNYDER: Mr. Baker? Well, let me ask a follow-up. You say you're bringing in mental health. Who do they then work for?

TOUGH: They will actually be working -- they're actually contracting providers. We bring them in under contract and set them up in clinical practice in the community to respond to the need.

SNYDER: So it's essentially a full-time military family caseload?

TOUGH: Yes.

SNYDER: Yes. Mr. Baker?

BAKER: Yes, sir. I would echo Dave's comments. I think over the years that we've done better in terms of networks and in terms of those non-network providers who are participating. There are pocket shortages in our region just as there are in the others. But overall I think our coverage is pretty good.

The mental health issue that we've talked about today concerns me a great deal because I'm not sure that we yet know what the demand is going to be. We know it's increasing. We know that we're not particularly rich in terms of mental health providers as a nation. And so, I worry about that, I'd say, a great deal.

The other piece, though, that I would also pass along is relevant to the earlier discussion and the question that Congressman Jones raised a moment ago about the ongoing downsizing. That can have a significant impact on the availability of care in a community. If you think about it, the medical community in a civilian setting flexes to the demand. And it flexes to the demand based on the amount of care that is required for the civilian members of the community, but also the amount of care that has been coming out from the base.

Significant reductions in the capacity and capability of the military facilities can often put a stress on the availability of medical care in a civilian community, whether it's a TRICARE beneficiary or not a TRICARE beneficiary. And I worry about the impact of what we're seeing long-term here, particularly where we have our bases located today.

SNYDER: Mr. McIntyre?

MCINTYRE: I'd like to associate myself, Mr. Chairman, with my colleagues' comments because I think they're right on. We're all working at this as hard as we can. There was a year a couple of cycles ago when we were all talking about dramatic concern around reimbursement rates. I stated at the time that I didn't think it was just rates. I thought it was about how we pay. It was about making the system more effective for providers.

And at the end of the day, it is about...

SNYDER: We used to talk about it was low, slow, and complicated.

MCINTYRE: That's exactly right.

SNYDER: And I think you all are taking care of slow and complicated, but we've still got low to deal with.

MCINTYRE: Yes, sir. That's right. And, you know, the challenge is it's the federal budget. And I remember when I came to Capital Hill in the middle of the '80s, my father was an ophthalmologist. They were the first ones to go under the knife on Medicare provider cuts. And, man, I didn't want to go home. In fact, he wouldn't pay for my tickets home when I was working as a young staffer because he wanted to disown me.

I think we have made it complicated. Yet what we're doing is we're demonstrating that it can work. And when you ease the complication and you pay people quickly, it's money that they're not having to subsidize out of their own pocket for already tight rates. And I think all three of us and our staffs are told regularly you're the fastest payer in the marketplace. That's a great thing. They deserve that. And they deserve every piece of what we can do.

We, too, have embedded mental health folks at our own dime into certain areas because that's important. There is one item that has not been covered that I think is one of the very complicated things that members of the military family are facing. Particularly, it's been spearheaded by the Marine Corps in terms of the focus. You all have addressed this in the way of asking for some reports. But that's the issue of autism.

And I had the privilege of spending a day at Camp Pendleton a few weeks ago with General Conway's wife where we listened to beneficiaries and their families talk about the challenges in autism. And the thing I was struck by -- and this is where our greatest challenge, I think, as an enterprise with your assistance, is going to be.

There is only one certified provider to care for autistic kids in all of New Mexico. And it stretches from Florida with 3,800 providers to California with 1,700 to Hawaii with 22 to New Mexico with one. How do we address that?

And how is it that we take care of the challenge that's being faced by these families when they rotate every couple of years based on their time in the military and the role that they have and they drop to the bottom of the state's eligibility priority list and they can never earn their way all the way back up that list before they rotate again? And I think there are some opportunities there to do some very focused and specific work and something that I would hope would be on your priority list as you're working through this legislative cycle.

SNYDER: I think that report, Jeanette or David -- you can correct me. I think the autism report is scheduled to come back to us in April, is my recollection. I think that's right. And we'll see what that shows. It is an interest of mine. And there are so many dynamics to it, as, you know, we're aware more and more how frequent the diagnosis is, about one in 94 boys now.

The intensive therapy seems to help substantially, but it's not without cost. And then you think of our military families who are dealing with a child, a special needs kid or kids -- this can be more than one child in a family. And then one of them is literally pulled out of the household for a year or 16 or 18 months in a mobilization, which can happen both with the Reserve component or active component. And what the change in the family dynamic is. So it is an important topic to this committee.

Mr. Wilson for five minutes?

WILSON: Thank you, Mr. Chairman. Actually, I apologize. I was at another committee meeting. And as the ranking member, I wanted to stay through the conclusion. But I want to thank you for your service and providing services to our veterans and current military.

And particularly, Mr. Baker, I'm very pleased that PGBA-LLC is in the district that I represent along with Blue Cross-Blue Shield.

And they are, Mr. Chairman, extraordinary public minded companies that if anybody needs a sponsor for the five-k run, somehow they get called upon and participate. And so, they promote health in different ways.

And again, I'm just happy to be here. Thank you for your service. And truly a way -- I know you're doing a good job. And I think this may apply to all of us is the number of complaints we get, which are so few. And indeed, my late predecessor, the late Congressman Floyd Spence, was such a promoter and person supporting the development of TRICARE to really serve our military. And thank you for bringing that to fulfillment.

I yield the balance of my time.

SNYDER: Mr. Jones?

JONES: Mr. Chairman, thank you. And as you were talking about mental health, I was looking at the paralyzed veterans. They had supported the supplemental bill that was up last week. And in their letter to members of Congress, it was all about the funding issue. And I'm reading here very quickly of that total of the $1.7 billion total. Of that total, $100 million would go for contract mental health care for men and women returning from the war.

And, Mr. Baker, you and the other two gentlemen, I'm sure, would -- I took from your comments -- and maybe it's the other two as well -- that we know with the PTSD, the brain injuries that this is something that's going to be hard to project. You can, through your experts, determine that, yes, there are going to be a larger number of men and women that are going to have these mental health needs. But we don't know exactly how many and how long.

You made the comment -- and I wish you'd all three pick up on this -- that as this need grows and expands over the next two or three years -- because if a man or woman -- I will never forget a kid. All of us go visit the hospitals. But I will never forget a kid from New Mexico named Eric. Eric was in a wheelchair. His mother was there from New Mexico. His little sister, about seven or eight, was there with him. And the doctor -- it was another member of Congress. And I think it was Gene Taylor. I stand to be corrected.

But anyway, when we left the room, Eric could not speak. And his mom kept saying, well, you know, these nice congressmen came to visit you. And all he could do was move his finger that was on his chest. And I will never forget the doctor when we walked out said that Eric's going to need care. He was 26 years old. Eric will probably need care for the next 45 or 50 years. And I realize that's not quite the same as mental care, but it is a brain injury. So it is related.

Where do you see -- this is the question. Your comments, well, we've got a problem because we need the medical experts, whether they be psychiatrists or psychologists or doctors. Do you see that pool is in a situation where we need to as a government, both state and federal government, we need to encourage more young people to look at that as a profession? Because where are we going to get the providers if we don't educate and get out in the field?

BAKER: Well, again, I appreciate the opportunity to offer an opinion on that.

JONES: Sure. Right, certainly.

BAKER: But it's not very informed. And I need to be the first to indicate that. But the truth of the matter is that I think we probably do need to try to encourage people to go into those sorts of professions. I believe the demand is going to increase. I think that's one of the outgrowths of this conflict. And I'm not sure that we have the capacity to deal with that increased demand, whether it's within the military health system or outside.

TOUGH: I would have to agree with Dave's comments. I don't think we really have a full sense of what the magnitude of the patient load is likely to become. I know that as a result of the efforts that are being undertaken to manage the active duty service members who may suffer from traumatic brain injury we're in the process of doing a national survey and search for every hospital that has the capacity to do treatment for TBI and try to develop an inventory of those services and a relationship with those contract facilities or those facilities individually as well as providers who are well-schooled and trained in TBI cases so that we can use them as advisers on cases that may be of a difficult nature.

The beauty of a national program such as TRICARE is that we have three contractors we can coordinate and communicate with regarding care across the country. And we recognize that there is also an infrastructure of V.A. that also has similar types of support mechanisms. There are for traumatic brain injury centers in the V.A.

So it's trying to look at the pool of the universe of what we can access. But being quite candid, I don't think we yet know what the requirements are going to be for whatever is extended into the future.

MCINTYRE: The challenge in this area is obvious. The challenge is to figure out how much demand are you going to have. And then do you build it or do you buy it or do you use a combination thereof? In this environment in this city, the decision was made to build it. That probably is the right decision.

In San Diego, as was referenced previously, the military and us made the decision that while we wanted people to come closer to home, the volume that was going to end up there probably did not justify the full construction of everything to be resident on the Balboa campus. And so, we searched the market in San Diego, which is very medically robust, and brought two institutions to the market, to the table that have specific expertise in brain injury, now, not blast brain injury like what we're seeing in Iraq and Afghanistan, particularly in Iraq, but brain injury nonetheless that they could work from.

I am struck -- and I spend time like you all at these facilities from time to time every couple of months just to keep me grounded in why it's important to stay focused and what the needs are. I had the chance about six weeks ago to spend time with the highest ranking patient at Walter Reed. He's a reservist one-star general from Florida. And he was the military attache to the U.S. ambassador to Afghanistan.

And he was second in line behind a Humvee that blew over. And he hit his head against the crossbar. This is a very, very smart guy. I know his law partner in Florida personally. He's a medal of honor recipient. And he was walking me through his journey of the last 18 months in dealing with this.

And here's a judge, and, you know, very articulate, but struggling. And so, it's going to show up in a lot of different ways. And I think the analogy of sports injuries is a good one. And you all are putting focus in this area, which is to be applauded. All of us as a society are going to learn about this going forward.

And the challenge is to be impatient about it, but also very focused and to be marshalling the resources that are available and matching those with things that need to be constructed but to be very careful to not build capacity where it may not be warranted long-term or we're going to create an ongoing expense that can't be sustained to the degree that we're able to get out of this kind of conflict in the near future. Thank you.

JONES: Thank you, Mr. Chairman.

SNYDER: And we will continue to learn about this for 60 or 70 years as this generation of veterans ages and deals with these impacts.

I think we're winding down here, gentlemen. But I had a few more questions I wanted to ask. When you all first picked up the newspaper when the Washington Post began running their stories on Walter Reed and then saw the events that occurred over the next several weeks up until now, what did you all and do you all see today as your responsibility in dealing with this whole complicated issue of -- I mean, obviously you don't have responsibility for mold at Walter Reed -- but that whole issue of the medical holdover care? What did you all see as your responsibility or do you see as your responsibility?

MCINTYRE: I believe that we have the responsibility to do two things. One is as the partners of those that wear the uniform and who lead organizations like Walter Reed -- and they're all over our regions of all different service types. And there are challenges in many of them. How do we come to the table to bring our assets and expertise to assisting them where there are gaps that we can plug together? That's first.

Second, I believe strongly that the real challenge that came from Walter Reed -- and it was not the mold and the cockroaches and all of that. It's the bureaucracy. And it's having patients and their families fall into the trap of the bureaucracy. And how is it that we streamline the focus to make sure that we're having the system serve the patient, not the system be a slave -- or the patient be a slave to the system?

And clearly, the focus that you all are putting in this area to look at the medical boarding process and the like is very useful. The plussing up, the care coordination is useful. I believe that we have a responsibility to share in the work on care coordination. It's why we're working on the pilot with the prototype with the Navy and the Marine Corps right now in the West.

And it does come down to a resourcing question but also a make, buy portion of that resourcing question. But it's solvable. And it's going to take the kind of heat, in my opinion, having served on the Senate side as a staffer for a while. It's going to take this kind of heat to melt the bureaucracy in our programs in a direction that's more responsive to the patients and their families.

SNYDER: Mr. Baker?

BAKER: Sir, I think we all do have a responsibility here. And in terms of the steps that we took after the Walter Reed story started to break, one of the first things we did was to reach out to the commanders of the military facilities in our region, again, to try to determine was there something that we could do to assist. We felt like that was a key component.

The other thing, frankly, that we looked at was facility by facility where did we have the opportunity to flex. That is where did we have networks that perhaps were too large as justified by the demand, but also that those other facilities where perhaps our network was not as robust as it might have been and what could we do to renew our efforts on the theory that if the commanders were going to have pressure to process the troops through faster, that could displace some care for non-active duty folks down into the network. So we felt like we had to do that.

The third thing we looked at was, again, to make an offer under the terms of our contract. Are there services that you need that we could bring into your particular military facility? Under a program in this contract that we collectively, I think, all refer to as optimization -- is there something we could do there? Is there a nurse or a technician or something that you need that we could help you acquire? So I think across those domains those were the kinds of activities that we engaged in.

SNYDER: Mr. Tough, anything to add?

TOUGH: Yes, I think this is uniformly the same approach we all took, was that we're partners with the military health systems, counterparts. And when the need arose, we immediately tried to jump in and assist them and how we could best support them.

Clearly, the majority of the care is in the direct care system. But when that care is in need of being outsourced to the civilian sector, we need to make sure it's a seamless transition and to make sure that we have solid case management support between that case that's been transferred from within a military treatment facility to the civilian sector.

SNYDER: If I might ask you all -- and, in fact, we'll go down the line. Because it was General Pollock, I think, that she and I had a brief exchange about she was -- I don't know if the word was critical, but concerned about that she couldn't follow quality control so much with services that were contracted in the private sector. Do you remember that comment? TOUGH (?): Correct.

SNYDER: I think this is what you're getting at here. Would you comment on what she said, please, about that?

TOUGH: Well, exactly. What she was trying to get at is that when we do get into that transfer of care into the civilian sector, we're going to have to have a mechanism to get that information back into a centralized point of control. And I think that's now being more actively worked as a result of the Walter Reed experience, I think, more clearly today than probably ever before because a centralized point of control is now evolving within the Walter Reed and certainly other military treatment facilities. So it's that information flow back and forth. We recognize, too, that sometimes in the nature of the care we are asked to get engaged in some of that might be very short-term in nature. It could be as simple as an out-patient visit or a short-term burst. But it could be longer term in nature. It could be a case managed activity that's in a civilian facility for a longer period of time. So it's important that we have that ability to communicate those case records back into the system.

The difficulty we're challenged with and faced with right now is that's not electronic. It's going to be paper. So one of the things we're going to have to work and overcome -- but again, we're also involved in other kinds of activities similar to what Dave Baker just mentioned. We've been asked to do some case manager training as they begin to ramp up their case managers within the system.

We've also stepped forward and indicated we'd be willing to help recruit those case managers. We'd even deploy some of our staff. We have several of our personnel that work for us that actually came out of the Walter Reed facility. And we told them we would be happy to just deploy them back into the system because they're well familiar with the Walter Reed's needs, put them back on the ground, and they could use them in any ways they wished.

I think the challenge, quite frankly, that remains is when you get into the civilian sector -- and this may be true for the active duty side as well -- is the beneficiary is going to move down a continuum of coverage. They're going to move from TRICARE. They might move to V.A. And they might even move to Medicare.

And so, we have to make sure that that process is as seamless as possible because there are going to be differences in the way that care is managed. There might be pass points that need to be thoroughly flushed out. And there might be differences in scope of coverage. So we have to make sure that that becomes a fairly clear and clean process.

Our takeaway of all of this is that we really have to understand that when there is an active duty service member that ends up in our hands or at any point that they need somebody's hand to hold. That's the primary issue. And we actually should treat this as both a concierge service, that we really have to care -- take the ultimate in care management to that active duty service member.

MCINTYRE: That is the very reason why in our region we've done what we've done with the Marines and the Navy, is to get all three legs of the stool under the chair. And that is the V.A., the DOD, and downtown. And it is this seamless handoff issue that's critical.

It's important to look at the needs of the patient through that entire cycle and do it together. And it's important to make sure that if we're going to place someone downtown like a reservist that was at 29 Palms whose family was in Colorado who could be placed in Colorado for a while to convalesce and then potentially come back into the Reserves that the only way to manage that well is to make sure that all three of those domains are focused on that individual as they morph in and out of the different systems getting what they need. And this notion of surge capacity is very, very important.

This is where we're going to struggle, in my opinion, because it's not...

SNYDER: With the surge capacity?

MCINTYRE: Well, potentially the surge capacity because it's not natural for people to say well, maybe I should buy it versus build it. That's the first thing. That happens in our own organizations. It happens everyplace.

The second thing, I think, where we're going to struggle systemically is this notion of really making sure that all the parties are at the table at the same time because there's this natural inclination that I own this, I want to make sure that it's delivered the right way. The challenge is, if you go back to medical hold of a couple of years ago growing out of Georgia, you can't hire case managers or move them off a ward and have them take care of TBI and know what to do the next day.

They flat out can't get there. It's a very, very specialized niche. And that's where it's important to draw from the assets that are available as we continue to share information and train each other in how to optimally manage these patients.

SNYDER: Which is why, as we're closing down here, Mr. McIntyre, I disagree a little bit. I don't use the term. I don't say that I think the problem at Walter Reed is a bureaucracy problem. That implies that somehow the laws are perfect and the people that are there -- it just kind of gets lost in the maze.

I think if we don't have adequate numbers of people with adequate training with well-understood expectations of what the laws are, I don't think it's fair to call that a bureaucracy problem. I mean, it's a maze. But I think that may not recognize the real cause of the problem. We as an institution may be the cause of the problem if we have disability laws that are really hard to navigate through.

I have one final question. I think it's probably just a yes or no to you, Mr. Tough. In your written statement, you say that 95 percent of the calls to your hotline are answered within 30 seconds. Is that a real person that answers them?

TOUGH: Yes.

SNYDER: Thank you very much.

Mr. Wilson, do you have further questions?

WILSON: No, Mr. Chairman.

SNYDER: Mr. Jones, do you have any further questions?

JONES: Mr. Chairman, I just want to thank this panel and the first panel. This has been very, very helpful and educational to me. Mr. Chairman, I want to thank you as well. This is an issue that you have all articulated extremely well. It's with us. It's in front of us.

And, Mr. McIntyre, I'll use your term. Hopefully we will encourage the common checkbook, one check, I hope.

SNYDER: Mr. McIntyre, Mr. Baker, and Mr. Tough, we appreciate you being here. The committee is adjourned.

END

Source: CQ Transcriptions

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