BUDGET JUSTIFICATION

Mr. MURTHA. Do the Surgeons General have a statement?

Dr. MENDEZ. No, sir.

Mr. MURTHA. Thank you, Dr. Mendez. We feel just starting to look at the budget for military medicine that the justification leaves something to be desired. For instance, this is a $16 billion program. We have Committees that meet all year long and have hearings all year long for $10 billion and $12 billion programs. This justification was 17 pages, and when I was walking around the room here someone said we are micro-managing the military end of military medicine. I will tell you this; we are trying to help people. That is what we are trying to do. I get infuriated when I run into bureaucratic obstacles to helping people because some people just want their own jurisdiction. Some of the results we heard today are that kind of bureaucratic red tape.

A woman told us this morning that she is bankrupt. She lost her house. Her husband is a retired service person. Now the military department is suing her for $200,000. She has nothing. She is taking care of a husband, herself, and finally we are getting it worked out. We tried to change the law because of Congressman Bill Young's suggestion so that these disabled people would be taken care of and someone says we are micro-managing military medicine. If it comes to micro-managing, we will get more than 17 pages of justification. We know it is an important program and our job on this Committee is to take care of people and we think that you have the same thing in mind. We hope that you have the same thing in mind.

I get so frustrated about excuses that we hear about what can't be done rather than taking care of these people. We have provided extra money for AIDS research. We are providing a research facility at Walter Reed, which we think will be a premiere facility because of work done on this Committee.

Because of some of the things we have found out in the field, we have tried to add programs which we thought would be beneficial, working closely with you trying to promote initiatives that would finally take care of dependents. When I hear complaints—and I don't represent a military district-from dependents that they can't have access to military hospitals, it is really frustrating.

When I hear a woman testify before this Committee that the Department is suing her after she has been bankrupt by some bureaucratic discrepancy, it is abhorrent. But we have to have more than 17 pages of justification material for a program that is $16 billion, and our staff will be working with your staff to get more justification.

CHAMPUS REFORM INITIATIVE

We have started to pay more and more attention as we go along, trying to make sure that we provide good quality care at the lowest possible price. The Rand Corporation gave us some estimates. A preview of the latest Rand study indicates that the CHAMPUS Reform Initiative in California worked very successfully, a 28 percent drop in mental health costs there versus a 64 percent increase in non-CRI areas. We know that is a big cost to all departments.

But we have a system that is working successfully there. We are disappointed in the request for proposal-RFP. We think you make it impossible-whether it is this contract or any contract, to bid on the same type of care, and when you have a 95 percent satisfaction rate-that is the rate and Rand agrees with this. When we read articles like we did in the Wall Street Journal about some of the dissatisfaction, we know it can be improved and we stand ready to work with you in trying to improve it.

DISABLED BENEFICIARIES

Let's talk, first of all, about the disabled provision that we put in the bill this past year at Congressman Young's recommendation. You know what provision I am talking about?

Dr. MENDEZ. Yes, sir.

Mr. MURTHA. Have you implemented this legal provision?

Dr. MENDEZ. No, Mr. Chairman. Our reactions about that were similar. Let me share mine with you. When I learned recently the significant time that was still required to complete the administrative steps for implementation of this provision I was not only dismayed but I was deeply upset. I immediately directed my staff to proceed with an interim rapid implementation of claims statements even before rule making is completed. I believed that that was the fair thing to do. As a result of that direction, a firm plan was put together. It is now complete.

We will be working with various beneficiary organizations in getting information to potentially eligible beneficiaries. A letter is going to the fiscal intermediaries specifically about that and we will be able to accept claims within about one week.

Remember, these were my patients or still are. To that effect, I know, indeed, what the feeling is from people in terms of their needs. So this was my reaction, not unlike yours.

This action is quite recent, but it is now in place so that we will be able to follow through.

Mr. MURTHA. One of the things I asked the panel of association representatives this morning was had anyone contacted you about any of the changes? So you have not got even-you have just made the decision and you haven't had

Dr. MENDEZ. I received the finalities of what I just said to you yesterday, sir, from the Office of CHAMPUS in Denver.

Mr. MURTHA. We look forward to seeing what the results are and how many people are covered by that provision.

Dr. MENDEZ. I look forward to sharing it with you also, because we are seeking the same thing.

CENTRALIZED HEALTH CARE POLICY

Mr. MURTHA. Last year, the department recognized the need to centralize the health care policy funding in your office. As you know, we supported that policy. Under the DOD concept, the Service Surgeons General executed consistent centralized policy guidance. How has this new policy worked?

Dr. MENDEZ. We reorganized on the basis of the directive from the Deputy Secretary of Defense 1 October. Under this DOD con

cept, the Service Surgeons General execute, if you will, that consistent centralized policy guidance.

The Deputy Secretary of Defense, after he issued that directive, talked not only to centralized authority and responsibility, but, indeed, to responsibility for the execution in one central place, namely my office. He also directed that I prepare and justify and defend the program objective memorandum. Subsequent to the Secretary's direction, a Defense Medical Advisory Council was formed. The Council is to advise me in the execution of the Department's medical mission.

It consists of a presidential appointee from each of the military departments and a general or flag officer from each of the military Services. A general or flag representative of the Chairman of the Joint Chiefs is part of that Council, and so is the President of the Uniformed Services University of the Health Sciences.

I chair the Council as Assistant Secretary. Since issuance of that directive, I have met with the Service Secretaries personally to review the new authorities. I have chaired two meetings of the Advisory Council.

I have expanded my Office of Budgets and Programs with temporary assistance from the military medical departments in order to oversee the 1992 program execution and in order to prepare the fiscal year 1993 medical budget justification. We also have developed and issued very detailed medical defense guidance.

I am preparing the fiscal year 1994 to 1999 Program Objective Memorandum with the help of the Services. These things are occurring at a very fast pace because of the short period of time since October.

I must tell you that both meetings with the Defense Advisory Council were of particularly good quality. I was quite taken by them and quite reassured by their involvement, both out of the secretariat and out of the senior service representatives, very much indeed.

BONE MARROW PROGRAM AND BREAST CANCER RESEARCH

Mr. MURTHA. A couple of areas where we have been pleased about the Service's reaction was bone marrow indexing, in particular. I think that has been a very successful program. We know the Navy has handled that. A number of people have come to me and said that they appreciated what the Services have done because their children or relatives' lives have been saved because of that indexing. We don't think it could have been done any place else and this was at the initiative of Congressman Bill Young. We appreciate the good job the Navy has done in that regard.

The other area we put extra money in this year was the breast cancer research.

Dr. MENDEZ. I can't tell you much in terms of results because it was being evaluated as to what the projects would be. I have no results to share with you at this time, Mr. Chairman. I can submit more material for the record in terms of the breast cancer research.

[The information follows:]

The Joint Appropriations Conference (102nd Congress) appropriated $25 million to initiate breast cancer research within the Department of Defense (DoD). Since this change to the President's Budget was appropriated, but not authorized, the funds were not released until February 24, 1992.

U.S. Army Medical Research and Development Command (USAMRDC) had no breast cancer research program prior to fiscal year 1992. USAMRDC solicited research proposals on February 5, 1992 from within the DOD and the Department of Veterans Affairs (DVA). The deadline for Federal submission of proposals was April 3, 1992. An initial review identified those proposals having considerable scientific merit. This review was completed on May 4, 1992, and each submitting organization was informed of the results. Proposals identified in this initial review as having considerable scientific merit are being further evaluated. The USAMRDC is expected to announce funding approval of the final selected proposals during the first week of June 1992.

A request for research proposals from civilian institutions was announced on April 16, 1992 in the Commerce Business Daily. The deadline for submission of these proposals is June 1, 1992. As with DoD and DVA proposals, proposals submitted by civilian institutions will be evaluated for scientific merit. Announcement of funding approval of civilian proposals is anticipated to occur between June 1, and September 30, 1992. The Army has no plan to continue this research program beyond fiscal year 92.

MEDICAL FREE ELECTRON LASER

Mr. MURTHA. Congressman Early from Massachusetts has a number of questions about laser medicine. If you would have someone answer that right away for the record and get an answer back to me and to Mr. Early.

[CLERK'S NOTE.-Questions submitted by Mr. Early, a member of the Appropriations Committee and the answers thereto follow:]

Question. I've recently been hearing a lot about laser medicine. It seems that this new technology will not only be cost effective by being less invasive and by moving inpatient care to the outpatient arena, but in fact it will decrease both morbidity and mortality for U.S. citizens. Additionally, it seems to be a very effective method of technology transfer. The United States is a leader in biotechnology and the military has always been a major player in biomedical research, as demonstrated by their work in vaccine development; therefore, I am very pleased to note that the Department of Defense is again on the cutting edge of medical research as demonstrated by the very successful work of the Medical Free Electron Laser program. For example, the development of "smart lasers" for the diagnosis and treatment of burns is an excellent demonstration. As a result of this impressive program, we are continuing our traditional excellence in medical research and biotechnology.

I am interested in your plans regarding support of this very successful and productive program. What has the President requested? Answer. For fiscal year 1993, the Presidential Budget request contains a $20 million support for continuation of the medical free electron laser program.

Question. What did you spend last year?

Answer. In fiscal year 1991, approximately $20 million was obligated in support of this program.

Question. How do you intend to make that a priority program this year?

Answer. For fiscal year 1992, this program is still under the cognizance of the Director, Defense Research and Engineering. The medical free electron laser program has been maintained at a stable funding level of $20 million for fiscal year 1992.

[CLERK'S NOTE.-End of questions submitted by Mr. Early.] Mr. MURTHA. Mr. Young.

BONE MARROW PROGRAM

Mr. YOUNG. Thank you, Mr. Chairman. Dr. Mendez, and Surgeons General, we are glad to have you here. I have to say that it has been a real pleasure working with you and your predecessors on some of the medical questions relative to the active duty Armed Services.

I know we have worked directly with you on the issue of fleet hospitals. We ended up building two hospital ships. Then there is the program that the Chairman mentioned, the bone marrow program. I have to tell you that without the DOD, and more specifically the United States Navy and Navy medicine, I don't think we would have a national marrow donor program today like we have. It is a miracle. No doubt about that.

The answer to it is people who are willing to be donors, and without the ability to determine who those donors are and to determine their tissue types to enable them to go into the registry to be a potential donor, people are going to die without a transplant. We worked long and hard to try to find a home for the registry and the United States Navy was very receptive and cooperative, and without them we wouldn't have the program we have today.

With them we have reached over a half million Americans in our registry. We have done over a thousand bone marrow transplants, and the DOD has been extremely cooperative because you have been doing recruiting at various military installations throughout the country.

We work with Dr. Bob Hartzman of the Navy directly and he deserves a lot of credit. He tells me there is a waiting list up through September to get to the various military bases that want to do recruiting drives. I think that is a tremendous testimony to the willingness of the United States military men and women to do something for their fellow Americans. This program has become international and we are trading marrow donations and patients across international lines. Without the cooperation of the DOD, I don't think it would have happened because other agencies in the Federal Government didn't really want to get involved with it. They thought it was too risky.

I think that you deserve that credit and I can't say enough about Dr. Hartzman because of the many long hours that he has devoted to this program and the tremendous help he has given us.

DISABLED BENEFICIARIES

I want to go back to the issue Chairman Murtha raised about the witness who was here this morning, Terry Cox and her husband Andy. They are my constituents. We have tried to help them work out their problems and we hit a brick wall every time we turned around. That is the reason that I asked the Committee to approve the language they did last year during our markup, language that you say you will be implementing within a week?

Dr. MENDEZ. Yes, sir.