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[H.A.S.C. No. 9670]

MILITARY HEALTH CARE DELIVERY

INCLUDING

CHAMPUS AND INQUIRY OF U.S. NAVAL

HOSPITAL, OAK KNOLL, CALIF.

WITH APPENDIX

HEARINGS

BEFORE THE

MILITARY PERSONNEL SUBCOMMITTEE

OF THE

COMMITTEE ON ARMED SERVICES

HOUSE OF REPRESENTATIVES

NINETY-FIFTH AND NINETY-SIXTH CONGRESSES

HEARINGS HELD MAY 17, 18, 24, 25; JUNE 2, 29; OCTOBER 12, 13,

26, 1977; JUNE 5, AND NOVEMBER 18, 1980

U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 1981

75-178 O

95TH CONGRESS

MILITARY PERSONNEL SUBCOMMITTEE

RICHARD C. WHITE, Texas, Chairman
G. V. (SONNY) MONTGOMERY, Mississippi DAVID C. TREEN, Louisiana
ABRAHAM KAZEN, JR., Texas

MARJORIE S. HOLT, Maryland
ANTONIO B. WON PAT, Guam

ELWOOD H. (BUD) HILLIS, Indiana THOMAS J. DOWNEY, New York

DAVID F. EMERY, Maine
CHARLES WHITLEY, North Carolina
CHARLES E. BENNETT, Florida
LUCIEN N. NEDZI, Michigan

WILLIAM H. HOGAN, Jr., General Counsel

G. KIM WINCUP, Counsel

96TH CONGRESS

MILITARY PERSONNEL SUBCOMMITTEE

RICHARD C. WHITE, Texas, Chairman
G. V. (SONNY) MONTGOMERY, Mississippi MARJORIE S. HOLT, Maryland
ABRAHAM KAZEN, JR., Texas

ELWOOD HILLIS, Indiana
ANTONIO B. WON PAT, Guam

LARRY J. HOPKINS, Kentucky
LUCIEN N. NEDZI, Michigan
BILL NICHOLS, Alabama

WILLIAM H. HOGAN, Jr., General Counsel

G. KIM WINCUP, Counsel
WILLIAM DAVID PRICE, Professional Staff Member
DONALD L. CAMPBELL, Professional Staf Member

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HOUSE OF REPRESENTATIVES,
COMMITTEE ON ARMED SERVICES,
MILITARY PERSONNEL SUBCOMMITTEE,

Washington, D.C., Tuesday, May 17, 1977. The subcommittee met, pursuant to notice, at 9:15 a.m., in room 2212, Rayburn House Office Building, Hon. Richard C. White (chairman of the subcommittee) presiding.

Mr. WHITE. The subcommittee will come to order.

Good morning. Today we commence a series of hearings to inquire into all aspects of military health care, including the Civilian Health and Medical Program of the Uniformed Services, commonly known as CHAMPUS.

Since the last hearings on health care delivery, which were held by the Military Personnel Subcommittee in the fall of 1974, the number of complaints and expressions of concern received by the committee have continued and at an increased pace.

We have received a strong signal from members of the active service and their dependents, as well as from those in the retired community directly and through some service organizations. The retired group has been somewhat more vocal since their numbers continue to increase and the ability of military medical facilities to care for their health needs continues to weaken. Further, costs for civilian health care are escalating at an alarming rate and it follows that such costs are reflected in the financial experience of those who use CHAMPUS.

We are aware of the continuing problem in all of the services relative to the recruitment and retention of medical officers and of a similar problem, in varying degrees, for dental officers. For example, recently, the Investigations Subcommittee heard extensive testimony, some of which was in sharp disagreement between the Office of the Secretary of Defense on the one hand and the Surgeons General on the other, with regard to expectations for medical officer procurement. Those hearings were held in connection with the attempted closing of the Uniformed Services University of the Health Sciences by the Secretary of Defense through the budget process. Fortunately, the Congress mandated otherwise.

In addition, the subcommittee is well aware of the management problems that have plagued CHAMPUS and some of the fiscal agents over recent years and the attendant discrepancies that have resulted in the administrative approval of some benefits that were not within the scope of the legislation as originally considered in this committee and finally enacted in 1966. Although we recognize that many of those deficiencies have been remedied, we wish to look into the accomplishments to date and what is in store for additional improvement as we look ahead.

Our purpose at the outset is to conduct an inquiry into the entire health care delivery system, and conclude with appropriate findings and recommendations that may well include legislative proposals. In

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fact, we now have before the subcommittee several bills addressed to military health care and CHAMPUS. Those measures are before each member of the subcommittee with a summary.

In conducting these hearings we hope to arrive at objective and constructive recommendations that will assist the services in improving the health care delivery system. In addition to the Assistant Secretary for Health Affairs and members of his staff who are with us today, we will call upon the surgeons general of all of the services and the chief dental officers, as well as witnesses outside the immediate offices of the Department of Defense, who will, I am sure, contribute much to the purpose of the hearings.

We expect to continue our inquiry following the Memorial Day district work period and thereafter publish our report at the earliest possible time. Hopefully, the subcommittee can then take up other matters involving complaints and grievances of military_personnel, and following that, an indepth inquiry into our Reserve Forces. We have an ambitious plan for the remainder of this session involving other priority items but, of course, must depend upon availability of time as dictated by the calendar of the full committee and the business on the floor of the House.

Prior to hearing from Dr. Smith, we have arranged a briefing on the fundamentals of military health care and the CHAMPUS program in order that the members may have the basics of health care delivery prior to receiving testimony.

At this point, I would like to ask our ranking member, Mr. Treen, for his comments.

Mr. TREEN. Thank you, Mr. Chairman.

I welcome this opportunity to join with you in what we all hope will be a fruitful inquiry into the entire military health care delivery system, including civilian medical care under CHAMPUS.

For some time I have been concerned over what has been perceived by many military members, including those in the retired community, as yet another example of deteriorating benefits and an implied breach of faith on the part of the Office of the Secretary of Defense. A recent example, as mentioned by the chairman, was the back-door attempt to close the military medical school. An earlier example was the plan to emasculate the commissary system. In both instances, initiatives taken by the House Armed Service Committee were instrumental in blocking those efforts.

Thus, Mr. Chairman, whatever the perceptions of congressional attitude in this regard, I must say that since I have been in Congress it has been my observation that this committee has worked longer and harder for the welfare of military personnel and their dependents than any other panel in the House or Senate with jurisdiction over military matters.

Nonetheless, we cannot rest on our oars and must continue our vigilance to assure, insofar as possible, that all facets of military medical care are maintained at the highest possible level consistent with the availability of funds to accomplish that purpose.

Accordingly, Mr. Chairman, we join with you enthusiastically in fulfilling the mission of the subcommittee by scheduling these hearings on health care.

Mr. WHITE. Mr. Treen, you are a veteran on this committee and I know you have put a lot of input into matters benefiting the military personnel in the past. I hope we can come up with very effective and salutary recommendations.

Secretary Smith, we welcome you and your colleagues, Principal Deputy Assistant Secretary McKenzie and Deputy Assistant Secretary Maj. Gen. Benjamin Baker, along with other staff members.

I understand that Mr. McKenzie is going to give us a briefing, but I must say that our review of the comprehensive hearings held in the fall of 1974 reminds us that we had an extensive review of the history of the CHAMPUS program and of military medical care delivery. Thus, I believe we can just briefly touch on those historical points and incorporate the details in these hearings by reference.

But, of course, don't be so brief that we don't understand what you are saying

STATEMENTS OF HON. ROBERT N. SMITH, ASSISTANT SECRE

TARY FOR HEALTH AFFAIRS, DEPARTMENT OF DEFENSE; HON. VERNON MCKENZIE, PRINCIPAL DEPUTY ASSISTANT SECRETARY FOR HEALTH AFFAIRS, DEPARTMENT OF DEFENSE, AND MAJ. GEN. BENJAMIN BAKER, USAF, MC, DEPUTY ASSISTANT SECRETARY FOR HEALTH RESOURCES AND PROGRAMS, OFFICE OF THE ASSISTANT SECRETARY FOR HEALTH AFFAIRS, DEPARTMENT OF DEFENSE

Mr. McKENZIE. In accordance with your request, we have prepared a short briefing on the background and organization of the system. What we commonly and somewhat loosely refer to as the military health care system actually is the aggregation of four subsystems, on the one hand we have the Army subsystem, the Navy subsystem, the Air Force subsystem and then on the other hand, the CHAMPUS subsystem.

Since CHAMPUS is an acronym, I might mention that it stands for the Civilian Health and Medical Program of the Uniformed Services.

In addition to covering the four military services that the Department of Defense normally has jurisdiction over, CHAMPUS also covers the Coast Guard, the Commissioned Corps of the Public Health Service and the National Oceanic and Atmospheric Administration.

The three military surgeons general, of course, preside, respectively, over the Army, Navy, and Air Force subsystems. The CHAMPUS subsystem is administered by an office in Denver that I will describe more fully later which has a civilian director.

Presiding over the entire system is the Assistant Secretary of Defense for Health Affairs. His is a statutory position established by section 136-B of title 10, United States Code. That section states specifically that the Assistant Secretary of Defense for Health Affairs shall have as his principal duty the overall supervision of the health affairs of the Department of Defense.

Care in the three military subsystems is provided in approximately 180 hospitals and the clinics associated with those hospitals, plus an additional 200 or so freestanding, separate clinics. The CHAMPUS

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