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six locations in FY 87, and we have plans to award substantial contracts for emergency medicine and acute care by the end of this fiscal year.

In fact our contracting initiatives will grow from $15 million in FY 87 to $98 million in FY 89. Contracting for

nursing services is a high priority in the FY 89 budget.

Nursing services contracts are being developed for 1989 award at Naval Hospitals San Diego, Portsmouth, Camp Lejeune, Oakland, Bethesda, Guam, and Subic Bay, Philipines.

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Our contracting initiatives, both NAVCARE and selected services contracting, are critical aspects of our efforts to improve access

for our beneficiaries and to ensure a steady flow of appropriate

clinical workload into our graduate education programs.

MANPOWER, STAFFING AND CAREER DEVELOPMENT

Manpower is our most valuable Navy resource.

This is

particularly true in the people-intensive delivery of healthcare. Our total inventy of active duty medical personnel as of January

31, 1988 was 40,743. This includes 3846 physicians, 1713 dentists, 3,061 nurses, 2,432 administrators and allied health personnel, 254 physician assistants, and 29,437 enlisted personnel. There are

also about 9,000 civilians working in our healthcare system.

Medical manpower growth has not kept pace with the demand for

care because the Navy necessarily has concentrated its manpower

growth to man expansion of the fleet.

Our medical manpower

situation also has been handicapped by our difficulties in

recruiting and retaining medical personnel. We have not been very successful in recruiting fully-trained physicians and have had to

rely on the health professions scholarship program and the more recently authorized loan repayment/stipend programs for Reserves. This situation is exacerbated by the loss of physicians at the end

of obligatory payback periods just when they are reaching full

stride professionally.

We are losing quantity and quality.

Recruiting goals for nurses have varied significantly from year

to year, resulting in an uneven flow in the nursing pipeline. We

have taken steps to correct this problem.

We will be implementing

a pilot program that will pernit reserve nurses to work on a

regularly scheduled basis at our medical treatment facilities and

receive drill credit for their work.

This program will augment the

hospitals' staffing and, we hope, attract some of these nurses into

the active force.

Some gains have been made in improving our recruiting

programs.

By the end of FY 88, for example, we will have 90 full

time medical recruiters in the field.

The improvements are already

paying dividends. For example, 41 physicians have been recruited, 22 of whom practice critical specialties. We have streamlined the recruiting process with a goal of reducing the processing cycle

from one year to no longer than 60 days.

The medical department

has taken action to shore up recruiting ensuring more

physician-to-physician contact at the local level.

Selected active

duty physicians will receive training at the Navy's recruiting school to learn techniques to be more effective spokespersons for

Navy medicine.

Navy also initiated a mass mailing of questionaires to 180,000 physicians and nearly 250,000 registered nurses to determine if

they might have an interest in serving in the Navy.

We are now

following up on the 3400 persons who responded. We will also participate in a similar undertaking sponsored by the Assistant Secretary of Defense (Health Affairs).

Our Loan Repayment and Stipend Programs are gearing up.

Two

nurses are enrolled in the Loan Repayment program.

Seven nurses

and ten physicians are involved in the Stipend program and there are another 12 applications in process. We expect these programs to make significant contributions to improving our manning problem.

Our recruitmert and retention initiatives are crucial to

improving our medical posture.

Navy leadership supports us in

these efforts. We are working with Vice Admiral Edney to develop a balanced, executable program for increasing the size of the medical

force.

Our efforts will produce a deliberate and steady increase.

I request that you permit Vice Admiral Edney and me to present a

balanced growth program for your review. The growth will include 300 medical department officers and the associated support personnel. We will also access all the Medical Department officers

we can possibly recruit.

I ask, therefore, that you review the

requirement to make 25 percent of all Navy officer accessions

medical department personnel.

EDUCATION AND RESEARCH

A professionally vigorous, enthusiastic medical staff is a

crucial variable in the complex equation that leads to retaining

physicians in the Navy.

Tug of the most important contributors to

development of this professionally competitive medical staff are graduate medical education and the opportunity to conduct rigorous clinical investigation and research.

In the prologue to their White Paper on Military Graduate

Medical Education, the Society of Medical Consultants to The Armed

Forces stated, "Graduate medical education is the keystone

supporting the entire voluntary military medical structure for quality healthcare delivery in time of peace and war. Simply

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stated, if we cannot train physicians, we have little hope of

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retaining them as career officers.

Traditionally, among the most

valued assets of the Navy Medical Department has been its education

and training programs.

Graduate Medical Education (GME) programs

have been highly sought by physicians, and the competition for residency positions has been fierce. Recently, the operational focus of Navy Medicine towards readiness training and the increase in medical deployments, without significant increases in manpower, have interrupted program continuity in many cases, depleted seasoned teachers from the programs and caused a drop in residency

applications.

We must halt this diversion of talent if we are to maintain

our future capability. Anything which threatens Graduate Medical Education programs, threatens our viability and the

quality of people we can attract and retain.

Retaining the

highest quality people is already very tough.

We must reward, stimulate, and retain our superior research

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intravenous fluids aze critical to resolving some of the most difficult wartime logistics problems. Similarly the conversion

of all blood into type "O" negative cells which can be frozen

and stored for years, then reconstituted for wartime use, using the onsite produced sterile intravenous solutions, has major

impact on our readiness; and the development of a process which provides diagnostic x-ray images in the field without the need

for x-ray film has the potential to significantly increase our wartime medical care capabilities and exploit space age

technology.

PHYSICIANS IN EXECUTIVE MEDICINE POSITIONS

Each year we must deal with the issue of assigning physicians

to executive medicine positions.

There are those who argue that as

long as we do not have the resources to satisfy all of our clinical

demand, we should require all of our physicians to provide direct

patient care in lieu of accepting management positions. In fact, the House Appropriations Committee Report on the Fiscal Year 1988

Department of Defense Appropriations Act directs each of the
Services "...to reduce by 10% the number of physicians in

administrative positions (from those assigned on September 30, 1987), returning them to patient services and replacing them in these administrative positions with Medical Service Corps personnel." This view fails to recognize that there are positions to which assignment of a physician is, in my view, essential to

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regardless of Corps, will be assigned to command our military

treatment facilities.

It is my judgement that the commanding

officers of our largest graduate medical teaching facilities must be clinically proficient, competent administrators, experienced in

Graduate Medical Education and research oriented.

I fully agree

that physicians are not needed just to sign paperwork, or move it

from one side of a desk to another.

However, the Navy does need to

to "grow" senior physician leaders for command positions in the organization. It is essential that a robust pool of highly

qualified personnel, including physicians, be available to fill

middle and top leadership and management jobs in Navy Medicine. We are providing the finest management training courses available to our people; however, the skills developed in these courses, while

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