have a tested design. We have something out there that works, but then, you take a dramatically different turn.

That is what we are having a hard time understanding. We are of the old school that if it ain't broke, don't fix it. This is not very popular with our constituents.

What are you trying to achieve with an untested situation? You shouldn't have put out a RFP-this Committee is very upset with you for doing that without doing a draft first. We go through a prebidders conference, and inform everyone. We should not just go out and drop a bombshell on our people, especially when it costs $3.5 billion. So, I will ask you again, why is it that we are changing direction here, when we have a new model that we have tested and its works, now we are going another direction with an untested model?

Dr. MENDEZ. I don't believe that the design is untested.

Mr. DICKS. Where has it been tested?

Dr. MENDEZ. It is a design that is the product of the experiences of CRI, the present MTF system and other lessons that have been learned by our civilian colleagues in managed care. In terms of change, we looked at the CRI area and the rest of the universe. The differential included a $150 individual deductible and $300 for a family-those amounts reflect a recent increase-and cost sharing. We are putting the deductibles no higher than that.

I realize that to the individuals in the two States that are affected that that is a significant change from the way it has been before. We applied basically all the lessons of the demonstration into a single program and must attain the benefit consistency that I spoke about a moment ago with you.

REQUEST FOR PROPOSAL (RFP)

Mr. DICKS. Let's talk about the RFP. As I understand it, the Committee asked that this be held up until there was a chance to discuss it, and that was not done.

[CLERK'S NOTE.-The Committee asked the Department not to release any RFP for the CRI recompete until the Comptroller General interpreted various congressioal direction on this issue.]

Mr. MURTHA. As a matter of fact, I asked by letter to Secretary Atwood on January 7, to let us see this draft request for proposal. He didn't even have the courtesy of showing that draft proposal to this Committee. You rushed in and put the draft out on the street for a $3.5 billion contract. Maybe we wouldn't have changed it, but certainly we may have had some recommendations to change that draft proposal.

Dr. MENDEZ. If I may, by all means-I certainly want to follow the direction of the Congress. The reality to us was that we had initially, in that matter, two conflicting directions.

The conflict occurred prior to the issuance of the RFP in terms of what type of procurement was going to come to pass. We released the RFP at the recommendation of the General Counsel and out of concern for timing.

What do I mean by timing? My concern was that there would be no period of time uncovered after expiration of the current contract; that there be no break in service to the beneficiary. Issuing

the RFP did not restrict the department to a course of action. Starts could be as early as August 1993 or as late as February of 1994.

The reality loomed that if we waited very long before issuing an RFP then we would have difficulty continuing a program of care for our patients in that area.

Now, my understanding is that the requirements of the Federal Acquisition Regulations were followed and that the pay proposal on the street at the present time is a legitimate one. Did we do a draft RFP? We did not.

Mr. Dicks. Why didn't you?

Dr. MENDEZ. First, a draft RFP normally is issued with something totally new. This is not going to be new. It is similar, with two or three differences, to the prior RFP in terms of content. Second, the concern for that hiatus in patient care I mentioned demanded a RFP go out.

Mr. MURTHA. Doctor, don't you think that if 95 percent of the beneficiaries are satisfied with the program, that they deserve some consideration before you put an RFP onto the streets. I understand the cost constraints. Have you ever had a problem with this Committee in making a recommendation that we didn't fund the needs of the military?

Dr. MENDEZ. No, sir.

Mr. MURTHA. Is there someone telling you that you have to reduce costs or service?

Dr. MENDEZ. I realize, I am not the whole Department of Defense, everyone has a budget to that effect.

Do I follow the budget? Yes.

Mr. MURTHA. You are saying this is cost driven?

Dr. MENDEZ. No, sir. I am not saying that this is cost driven. I am saying that cost is a parameter of evaluation.

Mr. DICKS. What is your legal basis for your use of the term "deductibles" or what is termed as bad CHAMPUS?

Dr. MENDEZ. In the 1991 and 1992 appropriations language there is, indeed, the authorization to be able to do what you termed a moment ago as a lockout, or to be able to increase the deductibles. Mr. DICKS. What do you anticipate the beneficiary reaction in California and Hawaii to be?

Dr. MENDEZ. That has already been shared with me, particularly by members of the military coalition. They expect that to be negative.

Mr. DICKS. Then, why are we doing this?

Dr. MENDEZ. Sir, for the same reasons that I spoke to a moment ago. In terms of doing the responsible thing for the whole system, to cause consistency in terms of the benefit. And, to attain savings which at the present time with CRI appears to be a true question, particularly in the latter years.

ANALYSIS OF IMPACT ON CRI

Mr. DICKS. RAND recently reported that CRI costs grew two percent while the remainder of the country's costs grew at 16 percent. Have you done an actuarial analysis to determine the impact on the CRI performance of your proposed changes?

Dr. MENDEZ. I have, as I have stated, no quarrel with RAND's input. Why? Because it is between that 1987-1989 time frame. The figures that I have are expenditures during the fiscal year by area. These figures tell me that in the last year that was looked at, the experience was not the same as reported by RAND initially.

Mr. DICKS. So, you haven't done an actuarial analysis?

Dr. MENDEZ. Actual experience analysis is done always in our office. These are basic

Mr. DICKS. Do you know what the impact of changes are going to be on the program?

Mr. MURTHA. To save money is one thing, that is a major consideration isn't it?

Dr. MENDEZ. It is a consideration; yes, sir.

Mr. MURTHA. Is it true that 100 percent of the hospital commanders in California and Hawaii asked to keep CRI? 100 percent?

Dr. MENDEZ. They have not asked me to keep CRI. It is my understanding and I have met with them, that the hospital commanders are satisfied with CRI, yes, sir.

Mr. MURTHA. Mr. Hefner.

FORT BRAGG MEDICAL CENTER

Mr. HEFNER. Thank you, Mr. Chairman. Doctor, it is good to have you and the other gentlemen here. I will be very brief. I think we can get to my problems without any long answers.

Last year the Army wanted to begin constructing a new medical center at Fort Bragg. The Congress required DOD to examine the long-term requirements for graduate medical education prior to building any new medical centers, given the reduced size of the force, and I think that was a wise thing to do. I believe that the study was due in early February. Can you tell the Committee what your findings were and will the Bragg facility be delayed as a result of this study?

Dr. MENDEZ. The GME study is due to me at the end of this month. I have appointed a group of flag officers to look at graduate medical education throughout the system, particularly at this time of force changes, to see how that should eventually lay out, and the relationship between the services in terms of graduate medical education. It is a complex issue and this is the reason why I appointed that group.

I expect action by the end of this month. In terms of the hospital, I would like to ask my colleagues to expand on that subject for you because Dr. Ledford has been quite involved.

Mr. HEFNER. Maybe he could open another hospital before he leaves.

General LEDFORD. Could I lead off by telling you I am about to wrap up 34 years of service and it has been service, sir. Looking on it, I just wrote down the things that I believe that I will look to with the greatest pride on my last four years as Surgeon General. This Committee supported every one of them: commissioning physician assistance, the new Walter Reed Institute of Research that we are going to make a national treasure, the funding of I think the best AIDS program in the Nation, funding of an AIDS

vaccine that looks very promising, and the opening of that fantastic facility at Madigan, that beautiful facility that Mr. Dicks helped open, and then the dream that I had the second week in office as Surgeon General when I met with the Chief of Staff and he asked what I wanted to do as Surgeon General. I said we got to build a new hospital at Fort Bragg. That is where the Army is putting a huge new amount of resources.

We have between 46,000 and 50,000 airmen in that area. I am proud that project is underway. The project is not being delayed by the GME study. We have been able to redirect some of the interim base realignment moneys to get things underway.

We will break ground next year. It is moving on track. It will be a 323-bed hospital and we need it. I was a brand new Army doctor in 1960, was stationed there at that hospital, had a year of residency and surgery there, but the hospital-I go back to it every year and it is getting old, it is outdated, it is overwhelmed and overworked, and we need the new one, and we are going to get it.

FORT BRAGG MENTAL HEALTH DEMONSTRATION

Mr. HEFNER. The Army has been conducting a mental health demonstration project at Fort Bragg, and the preliminary results appear to be very positive. Vanderbilt University, which is conducting the evaluation, has found the cost-per-patient to be about onethird as much as the normal CHAMPUS cost at the comparison sites.

Despite this improvement there seems to be some difficulty in working out an agreed budget for this year. We are half-through the fiscal year and the Army and the state have still not reached an agreement on the project. This Committee has strongly supported this project from the beginning and I would like your help in seeing that people sit down and resolve the issue and get the bureaucrats out of it.

It is hard to develop a concept if you can't have agreement on a budget. I would like your pledge that you will try to put these people together.

General LEDFORD. You have that pledge. That is ongoing now. I agree the program has been a good program. The reason the cost has gone up is because like so many things, when we do things well and right, they are very popular and so more and more people have taken advantage of this program. I think we have over 1500 children enrolled in this program, and it is very successful. The differences between the Army budget and what the contractor thinks is the cost should be this year are rather slight, and I am sure we can iron it out.

Mr. HEFNER. I hope you will get the people together where we can put their fears at rest. I have questions for the record Mr. Chairman.

Mr. MURTHA. Without objection the gentleman's questions will be submitted for the record.

[CLERK'S NOTE.-Questions submitted by Mr. Hefner and the an

MEDICAL DIAGNOSTIC IMAGING SUPPORT SYSTEM

Question. It is my understanding that a number of military hospitals are in the process of installing a new diagnostic image management and storage system which will reduce their dependence on hard-copy radio-graphic film images. This system is called MDIS Medical Diagnostic Imaging Support System-and is based on technology used in military airborne reconnaissance systems. How is the program going and do you anticipate it will be incorporated in additional DoD medical treatment facilities?

Answer. In September of 1991 a contract was awarded to implement filmless medical imaging technology in the DoD. The contract duration is four years for equipment with a follow-on eight year provision for system support and technology upgrades.

The site implementations in the first year of installation include

Madigan Army Medical Center; initial system operation March 21, 1992;

Wright-Patterson Air Force Medical Center; initial operation July 31, 1992;

Brooke Army Medical Center; initial operation phase September 30, 1992;

Air Force TAC Teleradiology Program-Lake AFB; initial operation August 15, 1992;

Plans to proliferate filmless medical imaging technology past this first year include_

U.Š. Force, Korea-a teleradiology program implemented over the next three years with linkage to Tripler Army Medical Center, Hawaii.

Wilford Hall Air Force Medical Center, San Antonio, with potential linkage to Brooke Army Medical Center, San Antonio, and other DoD Medical facilities in the region.

Dwight David Eisenhower Army Medical Center, Augusta, Georgia-a teleradiology program for DoD facilities in the South Eastern United States.

A PACOM and PACAF sponsored Pacific Rim Teleradiology program implemented over the next four years.

All of these plans are predicated on the availability of medical procurement funds.

Question. I believe the system will have the capability to digitize, process, store and communicate in electronic form radiologic images to other hospitals and institutions. This would appear to provide for substantial savings in diagnostic film processing and storage alone. What is your estimate of the annual savings when this program is operational?

Answer. Yes, the MDIS is projected to achieve savings in film processing and storage, but the bulk of the savings come from improved productivity and reduced patient stays. By exploiting stateof-the-art electronic medical imaging technology, the MDIS program holds the prospect of substantially improving the levels of clinical quality and productivity as well as resource effectiveness for diagnostic imaging in military medicine. It has been projected that once an in-hospital MDIS system is implemented, it can pay for itself in 48-96 months depending on the operational scenario.