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Senator CRANSTON. The hearing will please come to order. I apologize on two counts. First, for the delay; we had one more rollcall than we had anticipated, and that took up some time that I intended to use in a different way.

Second, I apologize to the first witness for the fact that I am going to be eating during his testimony. I will be paying attention, but I had no lunch and I don't know when and if I am going to get dinner. So, please forgive me.

Our next witness is Dr. Stanley S. Bergen, Jr., president, College of Medicine and Dentistry of New Jersey, Newark, N.J.

Before you proceed, I would like to say that Senator Williams, who is chairman of the Labor and Public Welfare Committee, and very interested in our work, wanted to be here and asked me to read a statement in his absence.



I regret that my schedule does not permit me to be with you this morning at your hearings on the Veterans' Administration hospital program, and its relationship to the VA health budget and the VA medical school bill. I want to make particular mention of the appearance before you, this morning, of Dr. Stanley Bergen, the president of

, the New Jersey College of Medicine and Dentistry.

I have read Dr. Bergen's testimony and can attest to the facts which he has detailed therein. In my State we have made great strides in recent years to both increasing the number of medical school graduates and to improve the quality of medical education.

A large part of this pertains to the medical school affiliation with the East Orange veterans hospital facility. And, as Dr. Bergen points out, there have been great benefits to the quality of care in the VÀ hospital itself.

But what is more important to know is the fact that much more needs to be done. The VÀ hospital budget for the coming year seriously turns the ability of that system to continue to provide good health care to its patients. In addition, there is a great need in New Jersey for a new VA hospital in the southern part of the State, since the demand for medical care is such that the existing facilities elsewhere are inadequate to meet that need.

As you know, Mr. Chairman, I was able to secure an appropriation of $3.7 million to be used for planning and site acquisition of a VA hospital in the southern New Jersey-Philadelphia metropolitan region. Unfortunately, the administration has, to date, refused to release those funds, and this delay will further exacerbate the health care problems for the veterans in that area. And what is worse, is that the administration's refusal to act now, will hamper plans for the establishment of the vitally needed third medical school in southern New Jersey to be affiliated with the new VA facility.

Mr. Chairman, I will not take any more of your time to outline the current problems and prospects in New Jersey. Dr. Bergen's statement will provide this subcommittee with detailed and well de

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veloped information in this regard. I am certain that you will give him a warm welcome.

Finally, I just want to commend you for all the fine work you have done over the years on behalf of our Nation's veterans. You have been instrumental in guiding important new programs for these men and women and we can all be proud to have you with us as you continue your fight to assure that America's veterans are not forgotten.

Senator CRANSTON. We are indeed delighted to have you with us. If you can, to some degree, summarize your written statement, which will appear in the record, that will give us time to ask you some questions. Thank you very much.

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Dr. BERGEN. Thank you very much, Senator.

With me here today is Mr. Schatzki of my staff. I appreciate this opportunity to appear before you this afternoon to testify concerning the college's many joint undertakings with Veterans Administration hospitals in New Jersey, and to relate to you our hope and intention that the college may have the opportunity to substantially expand these beneficial relationships through the creation of a third medical school in South Jersey in conjunction with the construction of a Veterans' Administration hospital in that part of the State.

The college is composed of two medical schools, a dental school and a graduate school, and is responsible for a number of health care facilities including a large public hospital. In addition, the college series as a statewide resource for continuing education, graduate medical education, and the development of models for health care delivery.

For many years we have had a very productive and mutually beneficial affiliation with the East Orange Veterans Administration hospital. In fact, historically, it should be noted that were it not for the assistance of that hospital at a time when the New Jersey medical school had lost its primary clinical facility, that medical school would probably not be in existence today.

There have been numerous mutual advantages resulting from the medical school-VA relationship over the years. However, listening to this morning's testimony, I must admit to some skepticism about the rosy official picture that was presented, and I thought it might be important to call to your attention two or three adverse elements that may in the future effect our relationship with the East Orange veterans hospital.

While we believe that that hospital is well run and excellently administered, we have noted in the last year an increasing necessity on our part to assume a greater portion of the cost of the physicians working in that institution. Particularly, we note that some of the members of our faculty must take on added responsibilities there in order to assure the continuing functioning of some of the new programs that have been started.

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This, of course, raises a problem for us, particularly in an extremely sensitive community such as Newark, where the allocation of our resources has to be carefully watched.

Second, a troublesome though minor event has recently begun to take place, and that is forced cutbacks in research projects. Now, these cuts are very small in nature, but I think we are a little worried about the tendency and the trend that is indicated by this.

For example, in four research programs in hepatitis, drug abuse, and alcoholism there have been cutbacks of approximately $3,000 to $3,500. While this has only been in supplies and other items like that, it has put a crimp in some of the studies. These events in turn cause some fear and skepticism among members of the faculty assigned to the VA hospital as to what the future will hold for these types of research programs. I should note that all of the research programs involved have specific, definite, clinical applications, not only to the Veterans' Administration and the patients in that hospital, but nationally.

Thus, what worries us most are the tendencies, the trends for the future, for we don't see significant cutbacks at the present time in the East Orange Hospital.

We also worry about the 80,000 average daily census limit that OMB has imposed, because in order to meet that limit, you have only two ways to go: either you cut back on admissions and place people on a waiting list or you cut back on their length of stay.

Senator CRANSTON. What effect can that procedure have on the health of veterans ?

Dr. BERGEN. I think it is hard to measure, sir. We are certainly hopeful of achieving more productivity and greater use of ambulatory care facilities, but I think the potential there is that patients would have to be either put on waiting lists or would have to be discharged early.

I would like to address myself in the next few minutes to the implications and importance of Public Law 92–541.

The State of New Jersey has for a number of years considered measures for a more equitable distribution of its resources for the education of health professionals, particularly physicians, and for the delivery of health care.

Now, when this bill was signed into law in October of 1972, we felt that it offered us an ideal opportunity to once again work with the Veterans Administration on the development of a project to provide health care for the veterans in a quality institution, and at the same time allow the State to fulfill its commitment to expand opportunities for medical education.

Governor Cahill gave impetus to this program and has given strong support toward it since that time. We have made an extensive survey of the southern part of New Jersey and find that there is great need for additional health care personnel due to the advanced average age of practicing physicians and the maldistribution of physician manpower. In a few years from now there will be serious attrition from the ranks of physicians in that area.

Senator CRANSTON. How soon is enactment? How quickly could such a project be developed ?

Dr. BERGEN. I think within 5 to 6 years.

We are particularly encouraged that the freeholders of one of the counties in South Jersey offered land for the development of this project, and that the appropriations act, mentioned in Senator Williams' statement, provides $3.7 million for planning and feasibility studies for the development of such a facility in the New Jersey/ Greater Philadelphia metropolitan region.

We are disturbed that the Administration has not requested any funds to implement Public Law 92-541 and that as yet no regulations have been developed. Because we do not have regulations yet, we do not know whether New Jersey could qualify. However, from what we have heard, we think we would qualify.

There apparently have been studies in the past which, we have been told, indicate the need for an additional VA facility in that general area of the United States. If a new VA facility were to be built in South Jersey, the State of New Jersey would move forward to develop an entirely new medical school.

The new VA hospital is critical to our plans because in our survey of the southern parts of the State, we find a great lack in the clinical facilities down there. Though there are many good hospitals in that area, many are small and lack residency or intern training programs.

The VA hospital, with its commitment to full-time staff and graduate medical education would be an ideal partner for a new medical school. At the same time, we could help the hospital by the recruitment of faculty who would be eligible for faculty positions at the medical school.

We would hope that we could move forward with this project in the very near future. I think the State commitment is there. I think the confluence of these factors can be brought together to be successful to produce more physicians for the State and the Nation. And, of course, at the same time increase the numbers of allied health personnel.

I would be happy to answer any questions you might have, sir, or make any further comments about my prepared statement.

Senator CRANSTON. Thank you very, very much, and I deeply appreciate your giving such a very succinct but important statement so briefly. The full statement will, of course, appear in the record at the conclusion of your testimony.

You were present, I think, during most of the morning. In my opening statement, I said I was interested in finding where savings could be made in present budget items as well as where more money is needed.

Would you recommend any cuts in the fiscal year in the three categories of the Department of Medicine and Surgery or other VA programs, or in the rest of the Federal Budget!

Dr. BERGEN. I am not sure that I am equipped to make those judgments. I think that we are worried about the cutback in research as a trend, and don't like to see those negative aspects begin to infiltrate the budget.

Senator CRANSTON. Why don't you take a look and see if you can come up with any thoughts on it.

Dr. BERGEN. Surely, I will be happy to submit that to you sir.
[Dr. Bergen subsequently supplied the following information:]

INFORMATION SUPPLIED BY DR. BERGEN We do not believe that we are best equipped to make judgments concerning which specific program areas, if cut, would do the least damage to Veterans' Administration Hospital Programs. We would urge, however, that if cuts are made, they be made in a lump sum manner giving greatest flexibility to the local hospital administrator to utilize funds according to his own priorities.

Frequently, when it becomes necessary to economize, there is a tendency to think only in terms of the short run and emphasize the obvious ingredients of patient care such as patient staffing ratio or average daily census and to cut back on areas such as research and medical education because their link to quality of care is less obvious. To take such a tack, however, is penny wise and pound foolish. Medical education and the relationship to medical schools is a fundamental ingredient that enables the Veterans' Administration to recruit excellent highly qualified staff for its facilities. Graduate medical education provide the interns and residents so vital to the twenty-four hour functioning of V. A. Hospitals. Clinical research is fundamental if future costs are to be reduced or avoided-one need only think of what present costs would now be had effective therapy for tuberculosis not been developed through research supported by the Veterans' Administration.

Therefore, I would urge that if cuts need be made that they be made in a manner designed to give greatest flexibility to the local administrator who is in the best position to judge how to maintain the overall quality of his institution both in the immediate future and over the long term.

Senator CRANSTON. Because we are going to be living within a spending ceiling, which I think is very appropriate, we have to always be looking for cuts to offset increases that we feel are necessary.

What do you estimate will be needed in outlays under Public Law 92–511 to get a new medical school started if a new VA hospital were constructed in South Jersey ?

Dr. BERGEN. Well, of course, the 3.7 million dollars that has already been specified in the Appropriations Act for fiscal year 1973 would get things started right away. That would be for the acquisition of land in the development of the site, the development of architectural drawings.

I think, then, depending on the size of the facility, builders, of course, would determine the amount of money that would be needed. I think that probably the cost to build an institution of 300 to 350 beds with a strong educational component would probably be somewhere within the 40 million to 45 million dollar area.

Now, of course, added to that within Public Law 92-541, is the salary support that goes to faculty with the State assuming a growing share of the cost over a period of 6 to 7 years at which time all Public Law 92-541 support would cease.

Senator CRANSTON. I have already asked you about this, but do you have anything to add to what you mentioned in your prepared statement with regard to the consequences of an enforced cut to an 80,000 average daily patient load?

Dr. BERGEN. As I noted, I think that the problem here is that this places in an artificial ceiling on how many days of patient care or how many patients you can have in a hospital. While I certainly subscribe to the concept of keeping patients out of the high cost area of inpatient care and using the low cost area care of ambulatory care as much as possible, I am not sure that this should be dictated by any ceiling that is imposed, but rather by encouraging through certain incentive mechanisms the use of ambulatory care facilities instead of putting them in as inpatients.

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