throughout this fast growing section of the Chicago metropolitan region long before our affiliation with North Chicago VA. Too much of our efforts and the efforts of our faculty have gone into this commitment for us to even consider turning back. Our decision to move was in 1970; the affiliation with the VA hospital was not entered into until April of 1974. This affiliation is a strong and vital part of our program but is by no means the controlling element in our decision to move or our decision to stay."

From the above public statement by a CMS spokesman it is evident that relocation on VA grounds or even affiliation with a VA patient care facility are matters of secondary concern to CMS.

It further underscores the mercenary position of CMS with regard to their reason for relocation, namely the acquisition of a parcel of prime real estate in the Northern Suburbs at no cost to CMS, rather than a desire for enhancement of health care delivery for veterans.

E. Are the above stated conflicts over philosophy and mission peculiar to this particular affiliation?

The philosophy and espoused mission of CMS apparently predate this particular affiliation and are not peculiar to it. The school's history is replete with instances of breach of commitments, disloyalty to affiliated hospitals and questionable administrative practices. Their moves to the Northern Suburbs was a direct consequence of an unsuccessful affiliation. In the words of the SERP review team (P. 5-6):

"As previously mentioned, the University of Health Sciences/The Chicago Medical School has considerable ‘behind the scenes' involvement and therefore some discussion must center on their motivations and desires. In the short run it is expected that the Chicago Medical School will be more of a partner to VAH, Downey than it will be in the long run. At the present time, they are bound by the grants that are funded or approved for funding under PL 92-541 and by the fact that Downey represents their only viable alternative to fill the 'gap' caused by their disassociation with Mount Sinai Hospital of Chicago. There is little doubt, however, that the affiliation with Downey represents only the best of available circumstances to the school and not the ideal affiliation. The proposals generated through the clinical staff at Downey and discussions within the Dean's Committee about splitting Downey into a two hospital complex (an acute and chronic sectioning) support the contention that their conception of the ideal clinical setting would be that associated with an acute, tertiary care center. Presumably, the school hopes to change the image and capacity of the hospital from the traditional role of a neuropsychiatric, alcoholic care facility to that of a tertiary care center. Such a plan would involve the expenditures of larger amounts of VA funds and concurrent commitments to the sharing of these specialized medical programs within the community each an integral part of the effort to generate acute demand. This plan would also insure the clinical staff an opportunity to establish privileges at the surrounding community hospitals-something closed to them at this time. If the VA should maintain a stance for the development of only a secondary care potential, it is suggested that the school will continue its efforts for the establishment of tertiary care capacity unabated by such a decision and will constantly re-evaluate its options to assure the ideal affiliation. Their past history with regard to affiliations suggests that the school is very flexible in its allegiances and extremely self-oriented."

Let us include some Veterans Administration history to put the affiliation in perspective. Affiliation of Veterans Administration Hospital, North Chicago with University Health Science/Chicago Medical School occurred during the reign of Mr. Donald Johnson, Administrator and M. Musser, M.D., Chief Medical Director. The subsequent VA top management, Mr Roudebush, Administrator and Dr. John Chase, Chief Medical Director, had many misgivings about the affiliation with the University of Health Sciences/Chicago Medical School (UHS/CMS). The basis for the sentiments were the many negative reports about the CMS in its relationship with all concerned parties. Despite this information, this Administrative Team did nothing to dissolve the affiliation. This nonaction made very little sense. Either one condones the affiliation and supports it, or one dissolves it. Since the Roudebush/Chase Team chose not to dissolve the affiliation, it made sense to support it.

The response of UHS/CMS to the VA announced support is a matter of record. It certainly demonstrates that CMS treats friend and foe alike and corroborates and gives more than passing credence to the CMS negative reputation in this area and nationwide.

The likelihood that CMS philosophical and practical attitudes towards “using" affiliated hospitals in a "self-oriented" fashion will persist subsequent to an affiliation with the North Chicago VAH is extremely high in view of CMS track record.

Indeed CMS is alleged to have already stated intentions of using the land as a location to build their own primary teaching hospital while relegating the VA hospital to a secondary "resource" role.

2. Is the affiliation between VAH North Chicago and CMS desirable at all, and therefore, is the land transfer even the question?

In view of the above data, it is readily apparent that the very desirability of an affiliation with CMS is highly questionable. Affiliations are ostensibly created for the mutual and reciprocal benefit of affiliates. To date, the CMS-VAH affiliation has not objectively demonstrated the mutality of these benefits.

While CMS as an institution has and will continue to gain fiancially from the affiliation, the VA hospital has, to date, lost considerably more than it has gained. Patient care levels have not appreciably improved at the hospital, and in some cases, there is evidence that these have actually deteriorated since the affiliation. Administrative conflicts have resulted in the transfer, discharge, or resignation of a number of highly capable VA employees, further worsening existing staffing shortages and creating severe morale problems among remaining federal employees. This situation further reduces the chances of attracting qualified staff due to the hospital's new reputation as a place where career security and stability of working environment are subject to the whims of a private medical school of questionable reputation.

The AFGE and VA Hospital, North Chicago, employees in general are particularly disturbed over the sacrificial dismissal of the exceptionally capable former Hospital Director by VA Central Office as a specific example of the deleterious and inappropriate influence of the affiliated school over VA internal administrative affairs and federal career employees.

Perhaps the issues discussed above are merely some of the specific examples illustrating a trend which has been viewed with increasing alarm by VA hospital employees throughout the nation; the inexorable "takeover" of primary patient care oriented VA facilities by tertiary care and research/education oriented medical school affiliates at the cost of the VA's mission (primary and secondary patient care).

The most basic issue addressed by this statement is the appropriateness of using scarce VA patient care resources to indirectly or directly subsidize or fund the activities of educational institutions.

3. Suggestions for resolution (in increasing order of desirability).

A. If the affiliation is to be continued-it is suggested that, in compliance with P.L. 92-541 and followed normal GAO lease of federal surplus property procedures, CMS be allowed to lease a limited portion of the acreage in question, sufficient to accommodate planned buildings and parking facilities, while leaving a substantial portion of the grounds as a therapeutic patient recreation

resource.

PREPARED STATEMENT OF LAWRENCE W. ROFFEE, JR., LEGISLATIVE DIRECTOR OF THE PARALYZED VETERANS OF AMERICA

Mr. Chairman, members of the Subcommittee on Hospitals, on behalf of Paralyzed Veterans of America, I appreciate the opportunity to submit these statements on the legislation you have under consideration affecting Veterans Administration Health Care Facilities. I am sorry we were not able to be at the hearings. The 30th Annual Meeting of PVA was held in Denver, Colorado July 18th to July 25th. It was a very successful convention, and I think you will see many good changes in PVA.

At this time PVA only has a position on three of the eight bills you are considering.

H.R. 3347

H.R. 3347 is a very sweeping reform of the criteria of eligibility for Veterans Administration Health Care Services, and the definition of those services. Once a veteran is eligible, either because of a service connected disability, because he is in receipt of pension, or is unable to defray expenses and has an

income below the "poverty level," he or she can receive a much broadened range of health services.

As I am sure the Committee is aware, PVA represents many of this nation's most catastrophically disabled veterans. Because of our disabilities, we are prime long-term consumers of VA health services. A spinal cord injury is a severe medical condition requiring very specialized care. We often have many additional medical complications. Furthermore, with the traumatic injury we need months, even years of rehabilitation, counseling, and mental health services available. There is no question that they truly need them.

However, while we approve of the intent and reasoning behind H.R. 3347, we feel it will not improve the quality of VA hospital for those who most deserve it and those who most need it. In fact, the bill could reduce the quality of care. At a time when the VA is having to cope with record high numbers of outpatients and inpatients, the bill will make more and broader services available to more veterans. At this time we feel it would be very unwise to burden the VA with additional patients.

While the bill would make more veterans eligible for hospital services, it would at the same time remove eligibility for a class of veterans who desperately need the VA services. The bill would amend Section 610 of Title 38 in such a way as to deem only those veterans whose income is below the "poverty level" as "unable to defray expenses" for the purposes of eligibility for VA health care services. This definition will eliminate the eligibility of many catastrophically disabled veterans who because of their income levels are not drawing pension. From survey data, we have determined the mean annual income of this group of veterans ranges from $5,374.81 for single veterans to $8,978.00 for veterans with four dependents. True, these levels are above the current "poverty" levels of $2,590.00 for a single person and $3,410.00 for a couple. However, due to their disabilities, these veterans face substantial extraordinary expenses. Over and above medical expenses, these typically include payments for personal care such as chauffering or even bathing and dressing. Additionally, a wheelchair bound person must often pay someone to perform the ordinary household maintenance tasks. Since a person with limited mobility must rely almost totally on private transportation, he faces higher gasoline bills. On the basis of survey data we found that 41% of the average monthly income of the single veterans and 25% of the average monthly income of the veterans with four dependents goes toward these extraordinary expenses. This leaves the single veterans with an effective income of $3,171.00 yearly and the veterans with four dependents $6,783.00 yearly. At these income levels the slightest unarticipated expense, for example, the need for a new wheelchair or additional medicines and prosthetics, would send these catastrophically disabled veterans under the poverty level and probably on to the pension roles, or into a VA hospital to live. The loss of self-esteem to the veteran and the cost to society would be great.

There is an additional problem. The current hospital and pension eligibility structures form a significant negative incentive and barrier to the catastrophically disabled veteran seeking gainful employment. A slight increase in his income will cause him to lose all of his pension, aid and attendance, and possibly his hospital eligibility. The poverty level criteria as proposed in H.R. 3347 would greatly increase these negative incentives.

It is PVA's position that the "poverty level" criteria itself is unrealistic and unrelated to the issue of hospital eligibility. The "poverty level" threshold is sheerly an administrative standard. It is premised upon the cost of food, the relationship of the price of food to the overall cost of living, and the proportion of a family's income that is spent on food. The "poverty level" is not at all related to any physical disability and the needs for health services. It is not at all related to the medical costs because of that disability. As such, PVA strongly opposes including the poverty level criteria as proposed in H.R. 3347. We urge the Committee to either eliminate the reference entirely or exempt veterans with chronic and severe disabilities. Another possible alternative would be to establish some type of treatment priority system.

H.R. 3346 and several more recent bills would amend Section 618 of Title 38 to allow the administrator to utilize the services of patients in VA for therapeutic and rehabilitative purposes for nominal remuneration. This amendment strikes at the heart of the Fair Labor Standards Act, and PVA believes it would be not within jurisdiction of the Veterans Committee to make such an amend

ment. We also believe such an amendment would not be necessary under the provisions of the Fair Labor Standards Act. That Act provides a method under which an employer can apply for certification to pay less than the minimum wage to persons whose earnings or productive capacity is limited due to a disability. To enact a blanket privileged exception when there are current procedures to exempt true rehabilitative programs in the FLSA is contrary to the intent of Congress which is to provide priority to the most severely disabled and assure equal protection of such persons.

H.R. 3349

PVA stands in strong opposition to H.R. 3349 which would permit veterans to determine how certain drugs and medicines will be supplied to them. We believe the VA currently has an adequate pharmaceutical disbursement system. The proposed change would create very high administrative operating expenses. Most importantly, the bill would result in significantly increased costs to the VA for the basic medicines.

H.R. 1543

PVA supports H.R. 1543 which would authorize the administrator to provide community nursing home care if he determines that the cost of such nursing home care will not exceed 45% of the cost of care furnished in a VA facility. This will enable veterans to obtain nursing home care in areas where, because of the 40% limitation, they cannot now obtain it. It will also reduce the noncritical caseload in already crowded VA hospitals.

This concludes PVA's statement. We appreciate this opportunity to submit them. We also appreciate the diligent work of this Subcommittee. The treatment and services offered by VA hospitals is improving, and this Committee has played a major role in the improvement. We thank you.

STATEMENT OF CHARLES L. HUBER, NATIONAL DIRECTOR OF LEGISLATION, DISABLED

AMERICAN VETERANS

Mr. Chairman and members of the subcommittee: We are pleased to appear here today and present the views of the Disabled American Veterans on matters relating to the VA Hospital and Medical Care Programs.

At the outset, I wish to compliment the Chairman and Subcommittee members for holding hearings on critical problems now facing the VA Department of Medicine and Surgery.

Mr. Chairman, our comments on specific legislation now before the Subcommittee will cover the DAV's position on certain elements of the Medical Care Program. We are especially concerned that the extension of benefits to new classes of beneficiaries not dilute the care provided for the service-connected disabled, who through law and custom are the nation's primary obligation. We will comment on the Bills in numerical order:

H.R. 1542

HR-1542 would authorize out-patient care for non-service-connected disabilities by the Veterans Administration for veterans suffering from service-connected disabilities rated 50% or more. Under existing law this benefit is limited to veterans having a service-connected disability rated at 80% or more. We believe that the 80% requirement is unreasonably restrictive and that a veteran so severly disabled that he is drawing compensation for a 50% disability should be entitled to this benefit.

In this connection we would like to call attention to a troubling inconsistency in the law. Section 624 (b) of Title 38, United States Code authorizes the VA to furnish necessary hospital care and medical services to veterans residing abroad but for service-connected disabilities only. There is no provision for treatment of non-service-connected disability in the case of veterans who have serious serviceconnected disabilities and who are now entitled to such care in this country under the provisions of Section 612(f) (2) of Title 38. We believe this omission was inadvertent and that at the time the out-patient care for non-service-connected disabilities was granted to the severely disabled no one thought to amend Section 624 to extend comparable treatment to veterans residing abroad. We urge that the Subcommittee favorably report legislation which would correct this situation. The cost of this legislation would be minimal.

H.R. 1543

This Bill would increase the maximum amount payable for community nursing home care from 40% to 45% of the cost of care in VA general hospitals.

H.R. 1543 would provide needed flexibility for the VA to parallel other federal/state public assistance payments and compete for skilled nursing care beds in community facilities. It would enable VA to provide community nursing home care to the veterans in some areas where the current limitation on payments for this purpose restricts their ability to provide needed care.

Although VA's nationwide average per diem payment for community nursing home care is below the maximum rate, the maximum allowed under current statute is paid in the states of Connecticut, New York, New Jersey, Michigan, Alaska and Hawaii. A higher maximum rate would enable VA to provide nursing home care to veterans in some areas where the current limitation on payment restricts the agency's ability.

The Disabled American Veterans supports the enactment of HR-1543 and urges favorable consideration by this Committee. The cost of this legislation would be minimal.

H.R. 3346

The pending Bill, HR-3346, would amend Section 621 of Title 38 to require that the Administrator adopt regulations and establish first priority for outpatient treatment to any veteran for a service-connected disability. Service-connected disabled veterans have, historically and factually, been considered as being entitled to first priority for care when it is necessary to formalize procedure. The only exception as to which veteran would have first priority would be the veteran requiring emergency care, regardless of service-connected or nonservice-connected status. As mentioned earlier, it has long been required that the primary obligation of the government is to those who incur disabilities in the service of our country. This fact is so clear and so well established that legislation such as HR-3346 appears totally unnecessary. Unfortunately, there are some who do not accept this principle and who believe that VA medical services should be available on a first come, first served basis. We strongly urge enactment of HR-3346 to emphasize that current treatment of service-connected disabilities have an unquestionable first call on VA medical resources. There would be no cost for this legislation.

H.R. 3347

Mr. Chairman, HR-3347 would completely revise the eligibility requirements for hospital care and medical service and the benefits which would be provided. In lieu of the detailed definitions of "hospital care," "medical care," and "domiciliary care" now under law, the Bill would substitute an all-emcompassing term described as "health services." Health services would be defined to include short-term, intermediate or long-term care whether provided in a hospital, nursing home, domiciliary or similar facility. It would also include out-patient or ambulatory care; physician or dental services; home health services; preventive health services; prescriptioned drugs; and many other types of treatment. Eligibility for such services would be combined and would include: (1) veterans with service-connected disabilities, (2) persons discharged with disabilities, (3) veterans 65 years of age or older and (4) veterans unable to defray the expense of such care. Veterans in receipt of pension or whose income is below the "poverty level," as defined by the Administrator, would be held to be unable to defray such expenses.

This Bill is very similar, but not identical, to a draft of legislative recommendations contained in a task force special survey conducted in 1974. The special task force explained the draft as designed to simplify and clarify for both the veteran and the attending physician the basis of eligibility and type of care available, and to allow the physician to treat the veteran's disability completely, and by the most appropriate modality without respect to arbitrary legal restrictions.

The DAV obviously supports the proposition of clarifying eligibility for hospital care and medical services, and the concept that the physician should be able to provide the best and most appropriate care. We do have serious reservations, however, concerning HR-3347.

Initially, we must make certain that the broadening of eligibilities for medical benefits does not diminish the care available to the service-connected disabled