cause certainly you would be buying by volume which should hold down that price.

When talking about warehousing in your statement you were telling about some warehouses that are holding 36 to 95 days of inventory, whereas civilian hospitals have established stockless systems.

Dr. MENDEZ. Indeed that is the part that I talked about in terms of holding inventories. How able are we to maintain our readiness posture, because we have to have the ability to deploy, and at the same time hold down inventories. Getting into the matter of electronic commerce is part of the material that we are tearing apart now, together with all three services.

Mr. MILLER. Thank you.
Thank you, Mr. Chairman.
Mr. MURTHA. Mr. Sabo?

BLOOD TESTING FOR LEAD

Mr. SABO. Thank you Mr. Chairman. Welcome, Dr. Mendez and the Surgeons General, and in particular welcome to my fellow county native, Admiral Hagen. It is good to see you.

Dr. Mendez, let me start on a positive note. The Congress last year made some requirements on blood testing of children in the Armed Services, and the reports I get are that plans are well in place and that the program is moving forward, and I commend you for it and the other people involved with it. I think it is an important program and it appears to be moving in the right direction, so say thank you.

I

Dr. MENDEZ. Thank you, sir.

Mr. SABO. As part of that program we appropriated a million dollars for DOD to use in coordination with HUD and EPA in coordinating efforts to find better clean-up efforts. I am just curiousanything happening with that coordination with HUD and EPA?

Dr. MENDEZ. It is happening particularly through the Assistant Secretary for Production and Logistics. We want the ability to collect the samples which we have talked about as a source of concern. We want to trigger ourselves any time the possibility of contamination occurs in the environment, to be able to respond at the clinic, and also vice versa.

If we get a finding at the clinic in which there is a high lead level, we want the ability to trigger an evaluation, and, if necessary, a clean up. We have been meeting with the staff of the Assistant Secretary of Defense for Production and Logistics and have initiated a Memorandum of Understanding with that office

Mr. SABC. Are you also meeting with HUD and EPA? Because that was the purpose of the million dollars.

Dr. MENDEZ. The others will be, yes, sir.

CRI MENTAL HEALTH COSTS

Mr. SABO. I am curious about what is happening in CRI with mental health services. I think I heard the Chairman refer to it. One of our problems in CHAMPUS has been the rapid escalation of mental health services. We have tried a variety of arbitrary limits.

Do you have any report or are the figures the chairman used accurate in terms of health care costs within CRI versus CHAMPUS?

Dr. MENDEZ. We have now in place two things, basically. We have new comprehensive mental health regulations including your congressional directions that allow us to take care of our patients and at the same time to cut down cost.

It is my understanding that CRI has been able to achieve costavoidance because of their implementation of utilization management for the delivery of mental health care.

Over the past year, for the system at large, we have implemented mental health quality assurance and utilization management measures. I think we have been able to cause significant decreases in the expenditures, and I think that that will be reflected in the slope of the curve of CHAMPUS costs in this year and the following year.

Mr. SABO. Could you give us costs for most recent years in CRI versus CHAMPUS?

Dr. MENDEZ. I will be happy to provide those.

[The information follows:]

Mr. MURTHA. The preview of the findings we have from RAND shows CRI had a 28 percent drop in the costs and there was a 64 percent increase in the non-CRI areas. This is the preview in the mental health area of the evaluation by RAND.

Dr. MENDEZ. Were those for the same year? Was that 1989?

Mr. MURTHA. That is the most recent data. I don't know what year it is, but it is the most recent finding.

DOCTORS COMMANDING HOSPITALS

Mr. SABO. Those are pretty dramatic differences. I am curious about what is happening over the congressional requirements of last year that command positions should have demonstrated professional and administrative skills. Secretary Atwood, I believe, has directed you to issue guidelines by March 18. I know that is about a week away. Will they be ready on time?

Dr. MENDEZ. Yes, sir, I believe that guidance will be ready on time. I appointed a task force to that effect, to include the services and several people from my department, including experts in health care administrative education, et cetera. That report, it is my understanding-I have not seen it as yet-is just about ready. It is being staffed intramurally within my office prior to coming to

me.

Mr. SABO. Will we get it quickly after you get it?

Dr. MENDEZ. Yes, sir.

Mr. SABO. Does it come to you for preliminary review?

Dr. MENDEZ. It has to clear the Department, and then by all

means.

CRI VERSUS CHAMPUS

Mr. SABO. Let me come back to Mr. Dicks' question. As best I could understand it, the answer was that the problem with CRI was that they were doing a better job than the balance of CHAMPUS and therefore the people who were enrolled in CHAMPUS in non-CRI areas were unhappy because their benefits and services weren't as good, so therefore we are going to try and make an attempt to equalize. That is what the answer sounded like to me.

Dr. MENDEZ. Then I wasn't explicit enough. When I speak to consistency, I speak to the expectation of the total system. The consistency issue is very real to me, because I must consider the directions from everywhere, the patient, the Congress and the Department. The cost factor that comes in to play on consistency works like this: on the low side of things, okay, to decrease the payments from the individual-going with that premise, then I have to have assurance that I am financially able to do that. How are we able to do that? I am talking about in terms of dollars, in terms of expenditures.

The data that I have for expenditures, particularly after the first two years of CRI experience, subsequent years experience, does not, at this point, support an ability to apply a consistent low individual patient payment and still contain health care costs.

Mr. SABO. I think we should get some numbers from the doctor. We keep hearing about projected numbers, which I gather we don't have.

Mr. MURTHA. I made the recommendation that we have never shorted them for any funds they have asked for. Obviously, the Comptroller's office is telling them they have a certain amount of money-it is cost driven.

Dr. MENDEZ. In the first two years of the CRI program, indeed the figures used are correct. In fiscal year 1990, to bring it a little closer, the annual increase in CRI was less than the increase experienced by the total CHAMPUS program without CRI. The CRI increased about 8.6 percent to 18.6 percent for total CHAMPUS without CRI.

However, in the following year, the annual CRI-area CHAMPUS increase this is fiscal year 1991-has been greater. For fiscal year 1990-1991 the increase in expenditures were 14.4 percent, while nonCRI CHAMPUS expenditures were increased 12.8 percent. That is not RAND's study; these are our figures.

Mr. MURTHA. Our study agrees with RAND so far.

Dr. MENDEZ. I look forward, like you do, to receiving those final numbers from RAND.

Mr. SABO. Thank you.

Mr. MURTHA. Mr. Livingston?

CRI IN NEW ORLEANS

Mr. LIVINGSTON. Thank you, Mr. Chairman, and Mr. Secretary and gentlemen. I too would like to start off on a positive note, and tell you that I was one of the fortunate members of this Committee, most of the members of this Committee got over there once or possibly twice during the war last year, and not only were you able to keep up your provision of health care services for the families back home, but it appeared to us that when the time came you were well prepared to take care of significant numbers of casualties.

We visited the USNS MERCY and I was most impressed and luckily neither the USNS MERCY nor the USNS COMFORT had to be utilized to full capacity or even near it, but you were ready and I genuinely appreciate how well prepared you were.

But we are in different conditions now, and we are in the process of paring down the Defense budget and laying off maybe some 4200 military personnel a week, and it seems to me that making sure that in a time of war we are taking care of not only the soldiers and the sailors and airmen but their families, and even in a time of peace we still have the obligation to take care of those folks that need help.

So we all are concerned about these numbers that have been cited, Mr. Secretary, on the CRI, because according to the RAND and the GAO and the Committee investigative staff, there have been significant savings in CRI in the past. I would like to see CRI expanded.

În fact, I mentioned that I would hope that it might be expanded to take care of those people impacted by base closures, and to that end we have one base in Louisiana, England Air Force base. On behalf of my colleagues, Clyde Holloway, Jerry Huckaby, Jim McCrery and the two Senators from Louisiana, I would like to submit questions for the record and ask that you address those, re