STATEMENT OF
J. JARRETT CLINTON, M.D.
ACTING ASSISTANT SECRETARY OF DEFENSE
(HEALTH AFFAIRS)
JUNE 21, 2001
Introduction
Mr. Chairman, I am pleased to be invited here today to present to you and the members of the Subcommittee the Department of Defense's views on current and future opportunities for Department of Veterans Affairs/Department of Defense (VA/DoD) health care sharing. The Department of Defense places enormous value on its sharing partnership with the Department of Veterans Affairs. Since the outset of the sharing program which was established under the 1982 legislation, "Department of Veterans Affairs and Department of Defense Health Resources Sharing and Emergency Operations Act (38 USC 811(f)), DoD has subscribed to the promise for improved economies of operation that health resources sharing has held. Partnering between VA and DoD facilities over the intervening years has resulted in the growth of sharing from a few agreements in the early years to 717 sharing agreements in place today.
DoD is looking forward to participating in the President's Task Force to Improve Health Care Delivery to Veterans recently announced by President Bush on Memorial Day. The Task Force will identify areas where greater coordination is needed between VA and DoD to improve health care quality and access for veterans and military retirees. We look forward to actively supporting the Task Force as they undertake this important review over the next two years.
Sharing between the two Departments encompasses a wide range of agreements, from the construction of joint medical facilities for use by VA/DoD beneficiaries to joint use of laboratory or laundry services. As my testimony will discuss, current sharing also includes major joint purchases of pharmaceuticals and compatability of information systems, resulting in major efficiencies for the federal government.
Our current sharing agreements and initiatives have withstood major changes in VA and DoD health care systems during the last decade, including the establishment of the Veterans Integrated Service Networks and DoD's TRICARE program. As our respective healthcare systems continue to shape themselves for the future, we have agreed that our partnering is best strengthened through joint efforts that are of mutual benefit. For instance, as our military forces and medical facilities downsize, greater opportunities for sharing emerge. More specifically, one area is in the cost-effective joint use of facilities. VA Medical Centers are now occupying clinic space provided by military facilities as a part of VA's community based clinics program. An example of this is the VA Medical Center at Murfreesboro, Tennessee and the Air Force's Arnold Engineering and Development Center sharing space and medical services at VA's outpatient clinic at the Air Force's Tullahoma Base, which is about 50 miles southeast of Murfreesboro. At that clinic, five full-time VA clinicians provide primary care to about 2,000 area veterans and the base's active duty beneficiaries. Now, because of heavier than expected use, VA is considering expanding space at the clinic.
Over the years, the importance of this relationship has not abated and the VA network of medical facilities continues to constitute an important component of the military health care system. We have collaborated with members of the Veterans Health Administration Staff and together produced a clearly stated policy on sharing, both with the DoD medical facilities and in the TRICARE networks. This policy also establishes the responsibility of the medical facility or military department that has negotiated an agreement with VA to honor the terms of the agreement and ensure that VA is paid at the agreed upon rate. Clarification of that responsibility became necessary after DoD implemented a new TRICARE network-based claims payment process for treatment of active duty personnel referred to non-DoD providers for health care.
In the late 1980's, escalating health resources costs led the Department of Defense to conclude that it could only ensure future access and prevent degradation of quality care through closely managing beneficiary care. As a result, in 1993, the first regional contract for the new DoD managed care program, TRICARE, was awarded. TRICARE enables us to respond to the needs of our patients both within our medical treatment facilities and from civilian providers. To ensure that DoD beneficiaries would continue to have access to a wide range of options, and that VA would continue as a key partner in our system of the future, VA/DoDjointly developed a memorandum of understanding in 1995 to allow VA Medical Centers to contract with the TRICARE Managed Care Support Contractors to be contractor network providers. Since the implementation of that agreement, VA reports that there are now more than 130 VA medical centers, roughly 80% of VA's 172 medical centers, which have agreements with the TRICARE contractors to provide health services. We stongly believe that the most cost-effective means for VA facities to offer services to military beneficiaries under TRICARE is as network providers..
Pharmaceuticals
Another major VA/DoD partnership is joint DoD/VA contracting for pharmaceuticals. VA and DoD have joint national pharmaceutical contracts which are developed through the collaborative efforts of the VA National Acquisition Center (NAC), the VA Pharmacy Benefits Management (PBM) Strategic Health Group, the Defense Supply Center Philadelphia (DSCP) and the DoD Pharmacoeconomic Center (PEC). To date, the VA and DoD have jointly awarded 44 joint pharmaceutical contracts with an estimated annual cost avoidance of about $70 million. A recent example of this is the recently awarded contract for the nonsedative antihistamines-allegra and claratin. The non-sedating antihistamine contract was awarded to Aventis Pharmaceuticals for fexofenadine (Allegra) 180 mg and 60 mg tablets. The contract prices went into effect on 1 May 01. The contract price of $.60 for the Allegra 180 mg tablet represents a 53% savings compared to the $1.27 per tablet ($126.84 per 100 tablets) Federal Supply Schedule (FSS) price that existed prior to the contract. The contract price of $.37 for the Allegra 60 mg tablet represents a 34% savings compared to the $.56 per tablet ($56.23 per 100 tablets) FSS price that existed prior to the contract. The cost avoidance that will be achieved from this contract depends on many factors beyond just the price reductions for the contracted drug. Other factors that affect the cost avoidance achieved include how much of the market share is shifted from the non-contracted drug to the contracted drug, any price changes that may occur regarding the non-contracted drugs, and changes in the overall quantity of drug usage within the drug class.
Since these factors are unknown, it is impossible to precisely predict how much the cost avoidance will result from this contract. Nonetheless, we will continue to track cost avoidance to report what actually occurs.
The non-sedating antihistamine contract is the first joint DoD/VA "closed class" contract. DoD and the VA each have their own existing closed class contracts for statins (cholesterol-reducing drugs) and proton pump inhibitors (PPIs). As these unilateral closed class contracts expire, DoD and VA plan to resolicit for joint agency contracts where clinically and economically feasible.
In another pharmacy area, DoD is drawing on VA's ten years of experience with its Consolidated Mail Order Pharmacies (CMOPs). Our Departments are working jointly to deal with the ever increasing workload and decreasing staffing at DoD military treatment facility pharmacies. A pilot program to process DoD direct care prescription refills at VA Consolidated Mail Order Pharmacies is presently in development. In June 2001, VA and DoD Information Management/Information Technology personnel began development of an interface between the VA CMOPS system and the DoD's direct care pharmacy system, the Composite Health Care System (CHCS). Completion of the interface is expected to be March 1, 2002, at which point the pilot program will begin.
Joint Use of DVA/DoD Facilities and Services
A major area of VA/DoD sharing is joint venture construction or modification of health care facilities. At present, DoD and VA participate in joint ventures at seven sites out of 172 VA Medical Centers and over 200 medical treatment facilities: Albuquerque, NM; El Paso, TX; Las Vegas, NV, Anchorage, AK. Fairfield (Travis AFB), CA; Honolulu, HI; and Key West, FL. These ventures involve sharing services, facilities, and staff. Each Joint Venture is unique and based on the needs of the populations served. But they have proven to be very satisfying to the patients and successful in reducing unnecessary duplication. An example of this is the opening of the new VA/DOD joint venture replacement hospital at Elmendorf AFB in Anchorage, Alaska in May 1999. This is an Alaska VA Healthcare System and Regional Office and Air Force 3rd Medical Group jointly operated facility at Elmendorf Air Force Base with a 110-bed capacity and which cost approximately $161 million. VA contributed $11.5 million to construction costs.. VA staffs an 8-bed Intensive Care Unit and the Air Force staffs a 20-bed multi-service unit. Air Force personnel staff the labor and delivery section and the emergency room. In FY 1999, VA admitted 375 patients to the hospital, and 582 VA patients were admitted in FY 2000. VA also provides staff for the emergency room, the integrated internal medicine/cardiopulmonary department, administration, patient services, utilization management, social work, credentialingand surgical services.
The
joint ventures have typically resulted from
both agencies coordinating their health care
needs and integrating their requirements in
well-planned, economically-based joint
operations. While the seven current locations
are a good start, there are other possible
joint venture site opportunities that need to
be explored. We will continue to look at our current
and future needs and take full advantage of
opportunities to satisfy those needs where
possible through joint venture..
Training
Between our two agencies, we share hundreds of training and education agreements. Typically these agreements involve training opportunities in exchange for staffing support. A good example is at the Phoenix VA Medical Center where reservists of the 158th Support Battalion (Arizona National Guard) train in nursing, laboratory, radiology, and food service monthly. In New Orleans, Louisiana, the VA Medical Center allows officers and enlisted personnel to work on the medical/surgical wards, respiratory therapy, pharmacy, laboratory and radiology services of the hospital. The reservists work in their duty Military Occupational Specialty under the supervision of VA nurses on each ward and the nursing coordinator on duty.
In an emerging area of sharing, as we depend more and more on reserve forces and integrate them into our total force, the number of sharing agreements with the reserves is growing. An example: the 81st Army Reserve Regional Support Command negotiated a regional agreement with four Veterans Integrated Service Networks (VISNs 7,8,9 and 16) having medical centers located in seven southern states and Puerto Rico for VA to provide physical examinations, dental screenings, and immunizations to reservists. VA provides professional resources, clinical facilities, and supplies necessary for these services. Plans are to expand these regional agreements to other parts of the country.
Information Technology and Patient Safety
DoD and VA have also agreed to share existing automation and technology products and collaborate in ongoing and future developments. We have joined in medical automation research in the Defense Information Research Center. We have linked DoD's Composite Health Care System and VA's Veterans health Systems and Technology Architecture (VISTA), successfully tested clinical laboratory data exchange, and accelerated evaluation of off-the-shelf software in the automation of patient records. Sharing information about our patients, particularly when our two agencies may treat the same patient, is vital to ensure continuity of care. DoD and VA continue to work on the sharing of information contained in each agency's health care information system. For example, we are willing to explore the opportunites for sharing our enrollment data base (DEERS) with the VA in the future.
In the area of medical evacuation, DoD and VA have a Memorandum of Agreement on the use of the DoD medical evacuation system. VA is participating in the development of the evacuation information systems, which enables it to directly enter patient data. When these systems are fully operable they will make a considerable difference in ease of patient care.
In December 1999, the President directed federal agencies to take a number of actions to improve patient safety. DoD has been collaborating with VA in those areas of patient quality and safety, including working together on the Quality Interagency Coordination Task Force, or QuIC. The QuIC was established to enable federal agencies with responsibility for health care to coordinate their activities to measure and improve the quality of care and to provide beneficiaries with information to assist them in making choices about their care. Both VA and DoD are active participants.
Deployment Health
Mr. Chairman, we have a deep commitment to preserving the health and well being of our military and veterans. In that regard, we have many activities underway to improve monitoring of individual health status and the continual medical monitoring and recording of hazards that might affect the health of service members, who will eventually become veterans. Following the tremendous efforts by both DoD and VA health personnel in creating and implementing the Comprehensive Clinical Evaluation Program for Gulf War veterans, interagency coordinating boards have been established. The Persian Gulf Veterans Coordinating Board, established in Jan 1994, provided direction and coordination on health issues related to the Gulf War. Through its three working groups, Clinical, Research and Disability Compensation, the board achieved successful interagency cooperation and coordination. The excellent work of this coordinating board has resulted in a model for the new Military and Veterans Health Coordinating Board.
The purpose of the Military and Veterans Board is to ensure a fully coordinated, synergistic and interagency approach to enhance health protection for service men and women, veterans and their families relating to future deployments. As with the Persian Gulf Board, the board uses the expertise of interagency members through working groups. The Military and Veterans Board has three working groups addressing research, deployment health and risk communications.
DoD and VA share in research other than that targeted to Gulf War veterans' illnesses. Currently we have granted funded research awards to VA and DoD investigators addressing post-traumatic stress disorder, infectious diseases, prostate cancer, traumatic brain injury, spinal cord injury, emerging pathogens, wound healing and repair, and research related to special populations such as homeless veterans and women. DoD and VA will be co-sponsoring a conference on Research on Women and Veteran's Health in September at the Women for Military Service in America Memorial.
Future Challenges and Opportunities
While the advantages of our sharing agreements, joint facility utilization and clinical collaboration are apparent, the evolving environment of federal health care and recent changes in policy and benefits call for continuing reassessment of opportunities that are mutually beneficial for our systems. This assessment must identify opportunities for increased coordination of benefits and improving our business practices, such as reimbursement, to ensure efficiency among the agencies. Improving business processes through standardization and simplification in such areas as billing and establishing reimbursement rates is a major starting point in eliminating barriers towards optimizing both agencies' health systems. To this end, the Financial Mangement Working Group under the DVA/DoD Executvie Council is reviewing both agencies' reimbursement policies and practices to remove barriers and disincentives to resource sharing between the two departments.
We recently participated with VA in an executive roundtable forum to discuss these issues and options for coordinating services. One coordination effort is included in the FY 2002 President's Budget for Defense. It ensures that DoD beneficiaries who are also eligible for VA medical care enroll with only one of these agencies as their health care program through annual enrollment seasons. This will enable top-quality coordinated care.
As we continue to respond to the ever-changing health care environment, the DoD leadership recognizes that it must develop creative approaches to health care delivery while retaining the flexibility to respond to the demands of our dual mission of operational and everyday medicine.
Conclusion
Mr. Chairman, my VA colleague, Dr. Garthwaite, and I, share a common vision of quality health care for our men and women serving our country, their families, and those that have served us so well in the past. We meet regularly as co-chairs of the DoD/VA Executive Council, which includes the Service Surgeons General and senior members of the VA health care team. While each of us must ensure that our health care system is capable of meeting the demands of our respective missions, we will continue to develop creative and innovative approaches to health care delivery while maintaining the flexibility to respond to the demands and challenges of a continually changing health care environment2120 Rayburn House Office Building
Washington, D.C. 20515
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