empted from the cuts for 1988, and I could be wrong about that. Nevertheless, we were given an order to look at cuts in the range of 10,000 from the Army. They said, "Medics, your share of that is somewhere around 600 officers"-I don't remember the exact number-"Do you want to do that by giving one large unit or taking it from many, many small ones?"

Mrs. BYRON. That are understaffed to start with.

General BECKER. That's right.

That was not a tough decision for me.

They asked also about another large hospital, and there was one we had just finished studying and found to be one that we wanted to retain, so that took it out of the equation.

Letterman came up on the list to be considered because it only has about 4,000 active duty around it, and, unfortunately, about 2,000 of that, or near about that, are the people associated with that hospital and with the institute of research, so there is not a big military population in that area.

This was put into a great list of issues to be considered, and the next thing I knew, it became a fait accompli. But I was not the decisionmaker on that; the decisionmaker was the chief of staff and the Secretary, and I'm sure they will stand by that decision. They felt that this did not serve a large area of active duty, this hospital, and that the medics would have to come up with their part of the space cut and the officer cut eventually, because we have 19 percent of the officers in the United States Army, and this hospital primarily supports the retired and their dependents in that area out there. That was their rationale, and that list, I think, then was presented to the Congress; I don't know what part; I believe to the Senate that was interested in the officer cuts. That is all the information I have on it.

Mrs. BYRON. I think this committee has been slightly interested in the officer cuts. I find that rather interesting, that the Senate is the only body that is interested in officer cuts.

Mr. Kyl.

Mr. KYL. I'm not sure who on the panel can answer this question. I had intended to ask it of Dr. Mayer, but he had testified that 60 percent of the-and this is my question-60 percent of something is represented by CHAMPUS. Do any of you know whether he is talking about the number of patients, the patient days, the cost, the budget, or what that is?

General BECKER. I think what he said was 60 percent we do in house and the other is done by CHAMPUS.

General CHESNEY. Sixty percent of our total military workload is done on CHAMPUS-eligible beneficiaries. I think that is what he was saying.

Mr. KYL. Sixty percent of your workload is done on CHAMPUS-

General CHESNEY. What we do in the military hospitals is done on CHAMPUS-eligible beneficiaries. They could go out if we weren't taking care of them in house.

I think CHAMPUS represents about 25 percent of the total Federal medical budget, somewhere in that area.

Mr. KYL. The 60 percent was a perplexing figure to me, and I just missed it, and I appreciate your explanation of that.

General Chesney, you in your testimony were the one who alluded to the quality assurance and malpractice claims, and this question would be for anybody on the panel who would like to address it, but I am curious as to what your view of the legislation is which has already passed the House-Representative Frank's legislation-which would significantly enhance the opportunities for malpractice claims to be filed.

General CHESNEY. I primarily view that as a legal problem, not a medical problem. It is not going to change how we practice medicine in the Air Force one bit. About 78 percent of our patients who come to see me today can sue. The only ones you are talking about are the active duty personnel. This was originally, I think, conceived to change how we practice, make us do better. But that won't change anything; we treat everybody the best we can right

now.

Admiral ZIMBLE. Mr. Kyl, if I could address that, as a physician, I take it as a personal insult that I am going to treat the active duty member differently than the beneficiary because I'm afraid I'm going to get sued. Furthermore, quality assurance does not derive from the courtroom. Quality assurance is a process that all of us are vitally interested in, and I think we are doing a superb job with our quality assurance programs.

I think it is important, however, that we recognize that we have to look to the adequate compensation for those that we injure, and we need a mechanism to do that. OSD is working in just such a way to provide appropriate, empaneling, objective adjudication of particular cases to assure that our systems for compensating people are adequate for the mistakes that we do make.

Mr. KYL. Of course, if this legislation becomes law, then at least to some extent that is obviated by the new law.

Do you see problems-and I could perhaps see this particularly in the Navy, but do any of you see problems with morale and discipline as a result of implementation of a new law like this?

Admiral ZIMBLE. The way it is originally being created, I am not sure, but as a precedent setting enactment I think there will be significant morale issues and significant problems with good order and discipline.

General CHESNEY. Yes, I agree. It will create problems for our medical officers who see enlisted personnel who want something for their visit and not necessarily health care who are going to threaten to sue if they don't get what they want, and that happens every day.

Mr. KYL. Thank you.

Mrs. BYRON. Mr. Ravenel.

Mr. RAVENEL. Thank you, Madam Chairman.

General Chesney, I just have a caveat for you. My spies tell me that in that marvelous new clinic you have got at the Charleston Air Force Base, there are some rumors float ng around among some of the beneficiaries, dependents, and retirees that there may be a reduction in physicians impending, and that would be an awful thing if that were to occur. You have just moved into this new facility. Everybody is delighted with it. You were doing a superb job in the old facility which had been there for years, and

years, and years. It would just be awful if, having moved into the new facility, you all cut staff, so keep an eye on that.

General CHESNEY. Mr. Congressman, I went over yesterday our physician manpower for this year and for next year and looked at it, and, as far as I can tell, we will not lose any, and I know of no reason to cut Charleston Clinic. I will go back and check on that one clinic and make sure, but, as far as I know, you can guarantee to your people that we will at least continue care at the level we are now, and that is my goal and promise to them, sir. If it is different, I will send you a letter.

Mr. RAVENEL. Good. Fine. Thank you, sir.
General CHESNEY. Thank you.

Mr. RAVENEL. Admiral Zimble, you and I have been through this so many times, and the committee has heard me so many times that they could give my little speech as well as I could, probably do it backwards. Anyhow, for the edification of those who are not familiar with what is going on down in the Charleston area, the approach that the Navy is using down there with their catchment area management demonstration project, General Chesney, I hope you folks will be included in it and participate in it. We have got about 95,000 active duty beneficiaries, retirees, and their dependents down there. We have superb physical facilities really, well equipped. We have 30 percent up to now, although they are increasing, and we see the increase, and we feel it, and we get reports on it constantly, that the regular Navy personnel there are slowly but steadily increasing.

But we have these excellent facilities, a 500-bed hospital in Charleston with only 120 beds, I think, operable and open. But in the area we have a surplus, and a decided surplus, of total medical personnel. We have a large medical university there. They turn out 165 physicians on an annual basis, the president, a former governor, former Secretary of Energy, classmate of mine, really a surplus of for-profit and not-for-profit hospitals, HMO's; our cup runneth over with total medical personnel.

The suggestion was made, which you all have acted affirmatively on, to give the hospital commander down there wide authority to go into the private sector and contract with any of those hospitals or a consortium of them, including any large firms or even individuals who want to participate to contract for the services to get us up to full utilization of the hospital and its ancillary services to be provided in the facilities, which is exactly what we want.

I note that you are having some doubts about your funding capabilities. I just certainly hope that you will be able to shake loose the money. We would certainly be interested, when the demonstration project comes on stream, that you will be able to give us some firm figures as to the difference on what it costs to put somebody out on CHAMPUS and whether you can treat them in the facilities, because I think that will auger well for not only Navy medicine but the rest of military medicine.

It seems to me that, in the wording in the authorization act of last year, once you get your stuff together and you say, "Look, this is what we want to do," to coalesce your plans as soon as possible to go to the committee, I feel sure that they will act affirmatively

on your request. It seems to me and staff that it is permitted in the wording of the act.

Admiral ZIMBLE. Mr. Ravenel, my rumor mill tells me that you think I'm being lukewarm in that process, and I want to assure you that I have never been lukewarm about anything, especially the catchment area management system, which I think is a marvelous idea, a way to give that commanding officer, that dedicated commanding officer, the opportunity to use the dollars he is provided most prudently.

I think the fact that Charleston's cup runs over makes it the ideal location. It was one of the primary reasons why I chose Charleston to be the catchment area model for Dr. Mayer.

I have a litany that I can go through, but I can also, if you permit, provide it for the record. Basically, it says I have invested some people in Charleston. We are working closely with the Air Force, because they are way ahead of us on this project, in order to develop a good implementation plan. The plan has been promised to me by the end of next week, which was the deadline I gave it. I plan to hand carry that, through my secretary, to the Office of the Secretary of Defense for Health Affairs and wherever it then needs to go to get the final approval. Nothing will make me happier than getting that started and on the street as soon as possible. I think it will be a model that we are going to have to use for the short term, at least for the interim, until we can grow to be ten feet tall. That is what we are going to have to do in many of our facilities.

So the fact that this model gets out and gets started is something that has my full enthusiastic support.

Mr. RAVENEL. Do you feel then that you are going to be able to find the funding in house?

Admiral ZIMBLE. We will find the funding, because I think we are going to find that it is prudent. I think we are going to find we can do it better; we can do it less expensively. The money is there now. We will be using some CHAMPUS dollars to do it. We know that CHAMPUS is underfunded; there is going to be some reprogramming. We have to pay yesterday's bills as well as invest in opportunities for cost savings in tomorrow's bills. Those things, unfortunately, always come together and collide at one point in time. So we will have some big bills to pay. But they are coming out of CHAMPUS funding, and that should not be a problem.

Mrs. BYRON. Mr. Weldon.

Mr. WELDON. Thank you, Madam Chairman.

First of all, in response to the testimony of the surgeon general, let me reiterate my support for exempting health care professionals from end strength limitations. I fully endorse that concept and will support it at every opportunity.

I just want to take a moment to thank you, Admiral Zimble, for your work in the Delaware Valley area in addressing the medical needs of the personnel in that area. I think because of your personal appearance there and your interest things have begun to look up, and I appreciate that.

My only question to you is, in light of what I have heard today in relation to the closing or potential closing of Letterman, when the ultimate report is issued by DOD and Dr. Mayer's office on health

care delivery in the area, who will make the ultimate decision on the Philadelphia Naval Hospital?

Admiral ZIMBLE. That is going to depend upon the economic analysis. If there is a requirement and everybody supports the requirement for a new hospital-and, of course, we have got to get busy and start doing some programming to staff that new hospital, and we have to get it in the budget for the MilCon program, and then it has to go to DMFO, the Defense Medical Facilities Office, et cetera. So that is going to be downstream. Once that decision is made, however, I think we can keep the current hospital, although built in 1933, we can keep it and nurture it to allow it to survive until that point in time.

Hopefully, we will have a catchment area plan model that we can look to as well to see how we can accommodate that model within the Delaware Valley and certainly within the catchment area of the Philadelphia Naval Hospital. That hospital is near and dear to me. It is the hospital from which I made the decision to join the Navy.

I think it is important to point out that Navy had three teaching hospitals at one time north of Bethesda, in the Northeast corridor. That was Philadelphia, St. Albans, and Chelsea. Chelsea is closed; St. Albans has been turned over to the VA, and we use it as an out-patient clinic; and Philadelphia is now down to its lowest staffing in its entire history.

All three of those hospitals enjoyed being in communities where there were many other teaching institutions and universities and were ideal locations for graduate medical education. Due to the lack of nourishment, due to the lack of iron and vitamins and a balanced diet, those three hospitals expired. We would like to revive one. I think it is imperative that we revive it ultimately, in the long out-years, to another graduate medical education teaching facility. But, again, I don't want to anticipate the results of the analysis that is currently being done.

Mr. WELDON. Thank you.

Mrs. BYRON. Mr. Ray.

Mr. RAY. Thank you, Madam Chairman.

Gentlemen, it is good of you to come today and to hear your testimony.

I have two or three questions and then a comment or two, if I might, Madam Chairman.

Admiral Zimble, I want to tell you that yesterday I spent a day at Bethesda and went through a rather extensive and delicate annual physical, and I couldn't have been more pleased. Contrary to what one of my colleagues wrote not long ago, I didn't have any problem at all.

Second, are you familiar with a psychiatric demonstration project ongoing in the Norfolk area, I think it is to a contractor called First Step, and you are getting ready to consider renewing that contract-is that right?-for the third year.

Admiral ZIMBLE. Yes, sir.

Mr. RAY. Well, let me tell you that I have been going through some rather delicate and intensive reviews with a number of people that are very unhappy and dissatisfied with the service that is being given on this particular right now. The funding that the