Notwithstanding the purpose of the increase from 4000 to 8000 beds authorized in section 5001 (a) (3) under the Public Law 93-82 amendment, the VA nursing home care bed level is still below the bed level authorized. In fiscal year 1975, (on March 31, 1975) the Administrator had 7091 operating beds, with an average daily patient census of 6772-a 95.6 percent bed occupancy. For fiscal year 1976, the VA budget request projects an average daily impatient census of 7497-or on the same 95.6 percent, occupancy, an operating bed figure of 7842. Recently, the Chief Medical Director of the Veterans Administration received a report from McKinsey and Company, with respect to the Future Role of the Veterans Administration in Health Care. A part of the report directed to the Aging Veterans Population said:

"Any near-term decline in demand for VA hospital care is likely to be more than offset over time, for the VA system as a whole, by the increasing health care requirements of an aging veteran population. By 1990, there will be nearly 7 million veterans aged 65 or older-more than 60 percent of all such males in the country-compared to over 2 million today. Not only do veterans who have not otherwise been eligible for VA hospital care become eligible at age 65, they also bring with them a considerable greater need for hospital care than their younger counterparts."

As you know, Mr. Chairman, the purpose of the VA and community nursing bed care program was to purge high cost acute care beds of veterans whose condition has been stabilized to the point where nursing care only is required. As we approach the aged 65 or older problem projected in the McKinsey study and report, greater numbers of eligible veterans will be in need of extended or chronic care that should be provided only by nursing or intermediate lower cost care facilities.

In the March 1975 preliminary report, the VA reported a waiting list of 576 for admission to its nursing bed care service. The budget authority for fiscal year 1976, under the Construction, Major Projects Appropriation, would provide funds for 9 nursing home care projects with a total bed capacity of 1050.

We believe the foregoing leads to the conclusion that the minimum nursing care bed level under section 5001 (a) (3) should be increased.

H.R. 3346-A bill to amend title 38, United States Code, to establish a priority for the furnishing of outpatient medical treatment to veterans with serviceconnected disabilities.

Under the authority of section 621 (a) of this title, 38 CFR 17.49 sets forth the Veterans Administration policy on priorities for admission to hospital, nursing home and domiciliary care.

In late 1972, the VA Chief Medical Director's Task Force on Admission Service recommended that procedures should be instituted so that every service-connected veteran receives VIP processing whenever he presents himself.

With the rapid expansion of the ambulatory care program, it has been our observation that veterans with service-connected disabilities requiring treatment must take their turn with the nonservice-connected patient.

We support the concept that those who require medical care for serviceconnected conditions should receive priority consideration in the ambulatory care service. Of course, those who present themselves under emergent or urgent conditions, should receive primary attention regardless of connection to service. Although the Chief Medical Director has effected this administratively, we urge its addition to 38 USC 521.

H.R. 3347-A bill to amend title 38, United States Code, in order to revise the eligibility requirements and the medical benefits provided to eligible veterans, and for other purposes.

Veterans' eligibility for medical care was studied by a Special Task Force in conjunction with the Special Survey of the Level of the Quality of Patient Care at Veterans Administration Hospitals and Clinics.

Following the study, the Task Force concluded that the laws which govern veteran eligibilty for medical care serve to compromise the ability and limit the authority of the Veterans Administration to provide adequate, high quality, economical care to veterans as they present themselves for care. Too often, the medical services required by veterans are controlled not on the basis of their medical needs, but on an administrative determination of legal eligibility which defines the care which can be given at that time and for that illness. As the Subcommittee knows, the present law on eligibility developed in a piecemeal fashion over a period of more than fifty years.

As proposed in this bill, the amendments to Subchapters I and II of Chapter 17, follow word for word the recommendations of the Special Task Force.

The changes proposed would extend to all veterans, in need of such services, a full range of inpatient and ambulatory health services, and would enable VA professional personnel to provide those services needed on the basis of their medical judgment, rather than on an administrative/legal determination of eligibility. As drafted, the bill would not eliminate or reduce entitlement to medical care under this title.

In view of the fact that the revised eligibility for medical care would improve the effectiveness of treatment and utilization of VA's medical and hospital care resources, we urge its enactment.

H.R. 6087-To amend section 612 (b) of title 38, United States Code, to provide any outpatient dental service and treatment to any veteran who has a service-connected disability of 80 percent or more.

As stated earlier, section 612(f) authorizes the Administrator to furnish outpatient medical service for any condition to any veteran whose service-connected disability is rated 80 percent or more. But in the application of this provision, VA instructions exclude dental services and treatment for non-service-connected dental conditions except on an adjunctive basis.

It is our view that the term "medical services" in section 612(f) should encompass all of the provision of "medical services" as defined in section 601 (6). We urge your approval of the purpose of the amendment to section 612(b). H.R. 6321-To amend title 38, United States Code, to provide hospital and medical care to certain members of the Canadian Armed Forces.

We draw your attention to section 109 of title 38, United States Code, which currently authorizes the following benefits for discharged members of allied forces:

"In consideration of reciprocal services extended to the United States, the Administrator, upon request of the proper officials of the government of any nation allied or associated with the United States during World War I (except any nation which was an enemy of the United States during World War II), or in World War II, may furnish to discharged members of the armed forces of such government, under agreements requiring reimbursement in cash of expenses so incurred, at such rates and under such regulations as the Administrator may prescribe, medical, surgical, and dental treatment, hospital care, transportation and traveling expenses, prosthetic appliances, education, training, or similar benefits authorized by the laws of such nation for its veterans, and services required in extending such benefits. Hospitalization in a Veterans Administration facility shall not be afforded under this section, except in emergencies, unless there are available beds surplus to the needs of veterans of this country. The Administrator may also pay the court costs and other expenses incident to the proceedings taken for the commitment of such discharged members who are mentally incompetent to institutions for the care or treatment of the insane.

"The Administrator, in carrying out the provisions of this subsection, may contract for necessary services in private, State, and other Government hospitals. "All amounts received by the Veterans Administration as reimbursement for such services shall be credited to the current appropriation of the Veterans Administration from which expenditures were made under this subsection. "Persons who served in the active service in the armed forces of any government allied with the United States in World War II and who, at time of entrance into such active service, were citizens of the United States shall, by virtue of such service, and if otherwise qualified, be entitled to the benefits of chapters 31 and 37 of this title in the same manner and to the same extent as veterans of World War II are entitled. No such benefit shall be extended to any person who is not a resident of the United States at the time of filing claim, or to any person who has applied for and received the same or any similar benefit from the government in whose armed forces he served."

According to the Canadian War Veterans Allowance Act, as revised, veterans of the Canadian, Commonwealth and Allied forces may obtain the benefits of the War Veterans Allowance Act, if their war service, age, residence, and financial circumstances meet the requirements of that Act. The widows and orphans of such persons are also eligible.

In general terms, veterans of the Canadian forces are eligible if:

(a) they served in a theater of war; or

(b) they are in receipt of pension for wartime disability; or

(c) they served in both World Wars and were honorably discharged from the last enlistment in each; or

(d) they served at least 365 days in Britain during World War I and prior to November 12, 1918; or

(e) they served in the United Nations Forces in Korea.

Veterans of the Commonwealth and Allied forces must have the service or pension status of (a), (b), or (c) and have been domiciled in Canada when they joined such forces, or, alternatively, have resided in Canada for at least ten years.

As far as service is concerned, eligibility of a widow or an orphan flows from the eligibility of the veteran concerned.

Allowances may be awarded to male veterans at age 60 and to female veterans or widows at age 55; or to either at earlier ages if they are deemed to be permanently unemployable because of physical or mental disabilities, or are unable to maintain and not likely to be able to maintain themselves due to a combination of economic handicaps and their disabilities.

The eligibility of an applicant also depends upon the financial circumstances, and an allowance may not be awarded if his personal property exceeds $1250 if he is single, or $2500 if he would qualify for the married rate.

Personal property includes cash, stocks and bonds, non-essential motor vehicles, and his interest in certain real property, other than his residence.

The maximum monthly allowances are $121 for a single recipient, and $201 for one at the married rate. The rate for one orphan child is $69, for two $121, and for three or more orphans of one veteran, the rate is $163.

The amount awarded, however, depends upon the other income, exclusive of exempt income, that the recipient has; and the combination of other income and allowance may not exceed the relevant annual income ceiling. These ceilings

The ceiling is increased by $120 if the recipient or his spouse is blind. Single war veterans allowance recipients may have exempt casual earnings of up to $800 a year, and married recipients up to $1,200. Casual earnings are defined as income from fulltime employment of not more than four consecutive months in any one year, or part-time work for any period.

Earnings of both the recipient and his spouse are taken into account, and the recipient must report all earnings and changes in income of his spouse as well as his own.

Medical and hospital treatment regulations provide that, under certain conditions of service and economic circumstances, veterans in receipt of award under the War Veterans Allowance Act may be granted medical treatment in Canada only for any conditions in accordance with the veterans treatment regulations.

According to these treatment regulations, the treatment privileges of United States veterans who receive the War Veterans Allowance include hospital and medical care, prosthetic appliances, hearing aids, dental care, and the provision of drugs. Domiciliary care for the elderly or chronically ill may also be provided where available.

Mr. Chairman, the American Legion is concerned about the welfare of those Canadian Armed Forces members, many of whom are United States citizens, or who, having served in the wartime Canadian forces, have since become residents of the United States, and who, by reason of illness or old age. are suffering distress. It is true that in many instances, assistance may be available to them through Federal, State or Community resources. However, the American Legion believes, in regard to this category of veteran, as it does about the veterans of our own armed forces, that they are indeed entitled to a measure of additional consideration because of their wartime service. The Dominion of Canada has recognized this special entitlement in its Canadian War Veterans Allowance Act. In our judgment, the United States, in so many ways the most generous nation on earth, should do no less.

We urge enactment of H.R. 6321 to amend section 109 of title 38, so as to extend entitlement to medical and hospital services to Canadian Armed Forces:

members who served during World Wars I and II, and who have resided in the United States ten or more years.

H.R. 8484—A bill to amend 38 USC 632 in order to provide hospital care and medical services in VA facilities to Commonwealth Army veterans for serviceconnected disabilities at such times as such veterans may require such care and services while within the United States and without charge.

As this Subcommittee knows, Subchapter IV of title 38 provides that the President of the United States is authorized to assist the Republic of the Philippines in providing medical care and treatment for Commonwealth Army veterans and New Philippine Scouts in need of such care and treatment for service-connected disabilities, as well as nonservice-connected disabilities, under certain conditions.

Section 632 establishes the criteria for the contracts and grants with the Manila Veterans Memorial Hospital to be worked out with the Government of the Republic of the Philippines covering the period of July 1, 1973 and ending June 30, 1978. The total of payments authorized shall not exceed $2,000,000 for any one fiscal year, which includes an amount not to exceed $250,000 for nursing home care for any one such fiscal year.

At its 1975 National Convention, the American Legion rejected Resolution 19 (P.I.). This resolution urged enactment of legislation similar in purpose to H.R. 8484.

In rejecting the resolution, the Convention expressed the philosophy that Commonwealth Army veterans of the Republic of the Philippines should fall under the provisions of 38 USC 109, when they seek medical services in VA hospitals while within the United States.

H.R. 12773—A bill to amend Chapter 81 of title 38, United States Code, in order to revise the provisions therein relating to the construction, alteration, and acquisition of Veterans Administration medical facilities.

In addition to updating the language of Subchapter I of Chapter 81, it strikes the language that the Administrator of Veterans Affairs' plans to provide hospital and other medical facilities shall be subject to the approval of the President. The revised language would, instead, require approval of both Senate and House Committees of Veterans Affairs where such construction, alteration, or acquisition exceeds $500,000, or where the annual rental of a medical facility exceeds $200,000. In this connection, the Congress shall not make any appropriations for these purposes in the absence of compliance with the provisions of the proposed section 5004.

Although the Subcommittee of the Executive Section of our National Veterans Affairs and Rehabilitation Commission considered the proposed measure at its May 1976 meeting in Indianapolis, they did not voice any position on the merits of the new section 5004, although they expressed the opinion in their consensus that the bill, in its other provisions, would improve on the Administrator's authority-particularly in the area of garages and parking facilities.

H.R. 12980-A bill to amend Chapter 75 of title 38, United States Code, to improve the operation and modernize the facilities of the Veterans Canteen Service of the Veterans Administration, and for other purposes.

This measure would amend section 4203 to more clearly define the purpose for which Veterans Canteen Service operates in Veterans Administration facilities providing hospitalization, treatment, or medical services.

Section 4204 would be amended so as to permit obligations to be incurred in excess of budgetary resources: permit multi-year budget planning; and authorize the use of revolving fund monies to finance capital improvements in VA Canteen Service facilities.

The amendment to section 4206 would add the requirement approval of the Director of the Office of Management and Budget be obtained before capital improvement expenditures could be made from revolving fund monies authorized under the proposed section 4204 amendments.

Since these amendments would enable the Canteen Service to more effectively carry out its mission of service to veterans receiving hospital and medical servces, we support enactment of this measure.

H.R. 13255-A bill to authorize the Administrator of Veterans Affairs to convey certain property at the Veterans Administration Hospital, North Chicago, Illinois, to the University of Health Sciences/the Chicago Medical School, a private nonprofit educational institution (approximately 87 acres.)

We have noted the provisions of section 2 of the bill relating to the deed of conveyance relating to the noninterference with the care and treatment of

patients in the VA Hospital, North Chicago, and the protection that would be given the interests of the United States.

As this Subcommittee may know, The American Legion has a long-standing policy opposing VA transfer or sale of lands and buildings associated with VA hospitals and domiciliaries. This policy was developed as a result of the several efforts of communities and others to acquire them for other than health care facility construction.

If such transfer would improve the delivery of health care to veterans' medical and hospital care at the North Chicago Hospital, and other VA hospitals in the Chicago area, we could not object.

We leave it to the Subcommittee to determine this at the time representatives of the VA Department of Medicine and Surgery papear to present their views. H.R. 14469-A bill to permit agreements providing special pay to physicians and dentists to be entered into until October 1, 1977.

Section 6(a)(2) of the Veterans Administration Physician and Dentist Pay Comparability Act of 1975 (Public Law 94-123) provides that no agreements relating to special pay shall be entered into after October 11, 1976.

Section 4(a), paragraph (4), of the Act directed certain activities and reports by the Comptroller General and the Office of Management and Budget by August 31, 1976. Both of these would bear on the recruitment and retention problems of the VA Department of Medicine and Surgery, the Armed Forces and others. The investigations and evaluations required under paragraphs (1), (2) and (3) of this subsection were to (a) identify appropriate alternative suggested courses of legislative or administrative action (including proposed legislation) and cost estimates therefor, which either the GAO or OMB felt would solve such problems, and (b) a recommendation, and justification therefor, of which such course should be undertaken

Quite obviously, the Congress will not have sufficient time to consider and to act on the studies and recommendations required by section 6(a), paragraph (4), before October 12, 1976. Because of this, we support enactment of H.R. 14469 to extend through September 30, 1977 the authority of the VA to enter into agreements with physicians and dentists to receive special pay

Thank you, Mr. Chairman, for this opportunity to present our views. We regret that more time was not available to develop the position of The American Legion on the measures under consideration

Mr. SATTERFIELD. The next witness will be Mr. Herman M. Finch of the University of Health Sciences, the Chicago Medical School. I believe he has someone with him whose name I did not get. Mr. Finch, we welcome you here this morning.

I should preface your remarks with this statement, while the bill dealing with the transfer of land in North Chicago was scheduled for hearing this morning, certain things are transpiring, which will probably delay the ultimate conclusion, nevertheless, we are happy to receive your testimony, since you are in Washington today, and it will be included in future hearings which we will hold this week and next week.

We are happy to receive your statement.

STATEMENT OF HERMAN M. FINCH, UNIVERSITY OF HEALTH SCIENCES, THE CHICAGO MEDICAL SCHOOL

Mr. FINCH. Thank you, Mr. Chairman. I come here to clarify really some points that may have been lost in deliberation, that you have on transfer of this land.

The land transfer was pursuant to an agreement between the North Chicago VA Hospital and our school some 2 years ago.

The decision of our university to move its campus from where it has been for 64 years in the center of Chicago came as a result of the liberation quite apart from any relationship with the veterans' hospital.