Hearing of Committee on Veterans' Affairs on Nomination of Hon. R. James Nicholdson to be Secretary, Department of Veterans Affairs

Hearing of Committee on Veterans' Affairs on Nomination of Hon. R. James Nicholdson to be Secretary, Department of Veterans Affairs

OPENING STATEMENT OF HON. JOHN THUNE, U.S. SENATOR FROM SOUTH DAKOTA

Senator Thune. Thank you, Mr. Chairman and Senator Akaka.

It is a privilege to be on the Committee and to have the opportunity to work with you and the other Members of this
Committee and also on behalf of America's veterans. This is important business that we go about as we strive to serve the
needs of America's veterans, men and women who have served this country and sacrificed for all of us when we were the ones in need of their service. And it is particularly important now because we are a country at war, and we will have men and women who will be returning to civilian life trying to piece their lives together after some of the most difficult and hazardous
tours of duty in recent history. Many will come back disabled, and we owe all of these veterans our utmost care and devotion.

I also want to note that my State of South Dakota boasts an exceptionally high ratio of veterans to its overall population
compared with other States. Because it is a largely rural State with many remote communities, our veterans face a number of
peculiar issues. One of the problems I will be interested in addressing while on this Committee is improved access to VA
health care facilities. Often, the nearest VA hospital is hundreds of miles away, and to require a veteran to drive three
or four hours to the nearest VA hospital for a simple blood test, especially for elderly vets, is simply not fulfilling
this country's obligation, and I look forward to working with you toward finding a solution to this problem and many more. We
owe that to our veterans.

I also look forward to working with Ambassador Nicholson. I cannot think of a more qualified nominee for this position. You
have got the character of an Iowa farm kid and have paid a lot of dues in the time since, and I just think it is so important,
your commitment and dedication to serving the wellbeing of veterans all across this country the same way that you were to
serving the needs of the servicemen under your command when you were in uniform.

And the fact is that you have a tremendous record of service to this country that did not end when you took the
uniform off, and for that, the country is already grateful, and we are looking very much forward to working with you as we
again attempt to address the important challenges and problems that are facing veterans across this country at a time when we have some unique needs, the Nation being at war, and, as was noted earlier, the budgetary constraints that we are all under, but I cannot think of a priority that is higher in terms of what we need to be doing to honor and respect and serve the
needs of America's veterans.

And so, I am delighted to be a part of this Committee and look forward to working with you and am anxious to see you
quickly confirmed.

Thank you, Mr. Chairman.

BREAK IN TRANSCRIPT

Senator Thune. Thank you, Mr. Chairman, and again, I appreciate your testimony and your dedication to this important
mission. I know that there have been some questions asked in my absence about some of the issues I was concerned with, one with respect to the CARES Commission, and I also know that there really are not any of these problems that probably cannot be fixed with more money, and that is the challenge that we face up here and that you will face in the job as well is most of the issues, in many cases, at least, the issues that are brought to me by the veteran community in my State of South
Dakota are funding issues. And that clearly is one of the issues that we are going to have to grapple with, but I am also
interested in working with you on ways that we can make our dollars go further and ways that we can become more efficient.

But I also have a specific interest, having said that and talked about some of the challenges and problems that you face
that sometimes can only be solved by money; as I referred to earlier, in access in rural areas, in your testimony, and I
believe this to be true, that with the community-based outpatient clinics, which have been extremely successful in
rural areas like South Dakota, you said that 87 percent of veterans now have access to a VA facility that is within 30 minutes.

And in South Dakota, they have to be driving awfully fast, I think, to be able to get there in 30 minutes in a lot of
places, but I know there are places not unlike South Dakota, other regions of the country that are very rural, very remote,
and where veterans still have to drive sometimes hundreds of miles to get to a facility.

And there are some things that have been proposed to address that. In some cases, veterans who have need for a
simple test that could be performed in a local clinic in their own community, and I guess I am wondering if that is something
that you would consider establishing, and that is improved access to a local clinic.

Congressman Osborne, a former colleague of mine on the House side, introduced a bill that would have earmarked 5
percent of VA funding to contract with rural civilian health facilities to provide services locally, and I understand that
the VA has opposed that sort of mandatory approach, but I guess I am wondering if there is a less restrictive solution that you
might support that would allow veterans to have access to some of these facilities, which are, in many cases, considerably
closer and more convenient than the distances they have to travel in rural areas?

Mr. Nicholson. The answer is yes, Senator Thune. I believe I am correct in saying that some of that is now happening, that
there are cases where they are engaging, on a contract basis, local doctors to take care of veterans who are too distant from
a VA facility or a VA clinic or who cannot adequately be serviced with telemedicine, which is really, now, coming into
its own, and the VA, I think, again, is on the forefront in the innovations of the use of that.

And I have been learning examples of where they monitor people's blood sugar and their heart rate and their temperature
electronically remotely every day, and we have equipped people, we have allowed them to stay in their homes, and instead of
institutionalizing them in a long-term care facility, they stay at home; there is a camera on both ends, and people talk to
each other, and that has got great potential to mitigate part of that. And I will look into the use of local contractors
more, but I think some of that is happening.

Senator Thune. I appreciate that, and I do want to pick up on one thing that you mentioned, because I really believe that,
and I have seen the examples of this in the State of South Dakota, where telemedicine is doing some wonderful things, and
I hope that is something that can be further employed with the VA. I worked as a Member of the House on some changes in the Medicare program that will make it more possible for facilities in rural areas to be able to have access to many of the
benefits of technology: teleradiology, a lot of diagnostic type things can be done from a distance now. And with the technology
that exists and is available, we certainly want to employ that, and particularly if it is a way that we can achieve cost-savings, and I would suspect that there are a number of ways where, if veterans had access to some of the technology that is
available in health care today and could be served in that fashion, we might be able to achieve some cost-savings as well.

So I appreciate your interest in working with us on that. As I said earlier, I am delighted that you are going to be in
the position. I think you are going to be a wonderful person with tremendous experience and compassion for the veteran
community, and we look forward to working with you.

Thank you, Mr. Chairman.

BREAK IN TRANSCRIPT

Questions for the Record From Senator John Thune, Senate Veterans' Affairs Committee; Nomination Hearing of R. James Nicholson to be Secretary of Veterans Affairs

Question: I understand the VA is considering a proposal to standardize testing equipment made available to veterans suffering with diabetes.

What data do you have to indicate that quality of care will not be compromised by switching veterans to different test equipment?
What will the direct and indirect costs be to transition to a national program? How will these costs be measured?
What are the VAs plans for obtaining public input into this program? Has the VA considered an advisory committee to monitor key aspects of the program including quality of care, access to testing equipment, and overall implementation?

Last year Congress extended the authorization of long term care (e.g. nursing home, geriatric day care, and home health care, etc.) to veterans with service connected disabilities rated 70% or higher. This is a 1-year extension of the 5 year authority originally provided for in the Veterans' Millennium Health Care Act of 1999. Terminating this program could have a negative impact on World War II and Korean Veterans and chronically ill Vietnam Veterans. Will you seek a permanent authorization for long-term health care?

Response: VA has two primary goals connected with standardization of Self Monitoring Blood Glucose (SMBG) equipment. First, we must ensure that veterans with diabetes receive the best care possible, including using reliable, state-of-the-art SMBG equipment with which they are comfortable; and second, we must pursue every opportunity to leverage our volume purchasing power to achieve savings to support more care for veterans. Our initial efforts to implement standardization will be focused on
providing new devices to veterans newly diagnosed with diabetes, to those whose existing equipment fails, as well as those patients who choose to change equipment on their own accord. Local VA providers will work with veterans who use the current standard SMBG equipment to offer transition to the new device. As is true with all VHA standardization efforts, individuals for whom the new device is not appropriate will be offered alternate SMBG devices. No one will be forced to change devices, and VA has made a commitment to various stakeholders to allow patients to continue to use their existing devices after a national award is made. Moreover, we would never prescribe a device that is not clinically appropriate for the individual patient.

VAs experience with standardization of pharmaceuticals and other medical supplies has shown that we can achieve significant savings to support expanded care to veterans, while simultaneously maintaining and in some cases, improving outcomes. The annual volume of SMBG strips has increased 70% from 91 million strips in FY 1999 to 155 million strips
for FY 2004; however, the discounts offered by the vendors using this contract strategy have not significantly changed. The cost per strip has dropped by only a penny in the last 3 years even though utilization has increased. Currently VA spends approximately $53 million dollars annually on blood glucose strips dispensed in the outpatient setting. Based on past standardization efforts however, a conservative estimate of SMBG devices cost avoidance would be in the range of 15-25% off of the current price. This would represent an $8M to $13M gross reduction in VAs annual cost for SMBG device strips. If VA were to make an award for 2 years, with 4 renewal options, the total gross reduction could approach $64M to $104M.

In September 2003, VA convened a multidisciplinary advisory group consisting of physicians, nurses, diabetic educators, medical technologists, and pharmacists and charged the group to review the SMBG medical literature and develop options for further SMBG standardization. This advisory group is conducting market research and clinical evaluations in this area, to include identifying direct and indirect transitional costs, and measurement of the same. Once the advisory group completes its evaluation and VA has had an opportunity to reviews its findings and analyses, VA officials will be pleased to brief the Committee on the results.

The Veterans' Health Care, Capital Asset, and Business Improvement Act of 2003, Public Law 108-170, extended the long-term care provisions of the Veterans' Millennium Health Care and Benefits Act of 1999 (the ``Millennium Act'', Public Law 106-117) for a 5-year period ending on December 31, 2008. We believe that periodic review and reauthorization of this authority by Congress is appropriate.

Section 1710B of title 38, United States Code, directs that the Secretary operate and maintain a program to provide extended care services to the extent and in the amount provided in advance in appropriations acts for such purposes. The law specifies that such services shall include geriatric evaluation, nursing home care, domiciliary services, adult day health care, respite care, and such other non-institutional alternatives to nursing home care as the Secretary may furnish as medical services under section 1701 (10) of title 38, United States Code.

Section 1710A of title 38, United States Code directs that the Secretary shall provide nursing home care (1) to any veteran who is in need of such care because of a service-connected disability, and (2) to any veteran who is in need of such care and who has a service-connected disability rated at 70% or more.

These categories of veterans are commonly termed ``mandatory veterans'' under the provisions of the Millennium Act.

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