wartime specialties was an important first step in reducing the pay gap between military and civilian incomes. The average difference between military and civilian incomes in the specialties that receive ISP is significant. The September 1987 issue of Medical Economics reported a 1986 net civilian practice earnings of $146,430 for "all surgical specialists," compared with an average lieutenant colonel physician's compensation of $82,000, which includes $8,000 ISP; a difference of $64,000. Although we can reduce this wide disparity by paying more money in ISP beginning in FY 89 to the most critical specialties, we

are reluctant to risk damaging the morale of the Medical Corps as a whole by extraordinary expansion of the differentiation between the 20% ISP "haves" and

the 80% ISP "have nots."

A much better solution is to increase all categories of special pay variable special pay, additional special pay and board certified pay. The rates for these pays have not increased since they were set in 1980. Long overdue increases are necessary to reduce the income gap for all physicians, not just those in wartime specialties. I will request that Dr. Mayer include these increases in the Biennial Report of Special Pays, which is due to Congress at the end of September.

Officer Reduction and Staffing

I greatly appreciate the Congressional direction to exempt the Medical Service from the officer reduction of 1% in FY 88. This has enabled us to increase wartime readiness, better meet the health care requirements of our beneficiaries and minimize costs. I want to re-emphasize my concern about possible future cuts that could result in either a reduced level of services or

an increased CHAMPUS cost.

Congressional support of manpower growth in the Five Year Defense Plan will

Our military

allow the Air Force to meet most of its contingency requirements. manpower is programmed to grow over three percent between now and 1992. growth is paced to coincide with the delivery of our deployable assemblages.

The

We

are using the additional manpower effectively in peacetime to expand services available to our beneficiaries.

Overall, we are able to staff currently authorized positions.

Although,

some problems exist in the mix of providers on active duty, efforts in increasing critical medical specialists (i.e., general surgeons) have been successful. We continue to have shortfalls in radiology, psychiatry, OB/GYN and nurse anesthesia, and I am very concerned about the vastly increased competition

for nurses.

Armed Forces Health Professions Scholarship Program

This past year, legislation was enacted affecting the Armed Forces Health Professions Scholarship Program. This program is our main source of high quality physician accessions. Effective 1 October 1989, the DOD must have 2,500 participants designated who are in the final two years of their course of study; and, who have agreed to accept, if offered, residency training in a critically needed wartime skill. We understand the intent of this legislation was to target a sizeable portion of the program participants to meet wartime requirements. A recent Association of American Medical Colleges survey of medical students reported only 23% have decided on their residency preference by the time they enter their third year of medical school. Furthermore, how can we ask a medical student to agree to residency training in a designated specialty when the student cannot guarantee the Air Force he will be selected? It is a highly competitive process, with medical students not chosen until the end of their fourth and final year. For those selected, there of course is no guarantee that they will complete training. Additionally, even if feasible, we are not certain this would be attractive to a potential applicant who has obtained alternative financing for the first three years of medical school. Will that individual commit to military service for only one year of scholarship

benefit?

dical Readiness

Medical readiness is our first priority. We are committed to the deterrence of war through operational support to our fighting forces.

Optimum

effectiveness.

To prepare for the treatment of the injured and sick during

wartime, we operate a comprehensive health care system in peacetime which ensures that our medical response for wartime is rapid and ready. We are committed to supporting the flying mission through a community based health care system within the Air Force operational command structure. We are convinced that the wellness of our airmen and his or her family is a key ingredient to the Air Force's mission capability and overall readiness posture.

We have made remarkable progress since the late 1970's. We adopted the four echelons of medical care system. This system provides for an increased level of medical capability as patients are evacuated from the front lines and establishes a level of care at each echelon that focuses on two basic

objectives.

First, and foremost, mission Isupport is maximized if we are able

Seocnd, for those

to treat and return to duty as many airmen as possible. unable to return to duty, their condition must be stabilized and properly managed until they can be evacuated to where more definitive care is available.

Our investment in war reserve materiel has grown significantly from $17 million in 1978 to $450 million this year. Much of this investment has been prepositioned overseas at expected places of use. Readiness training continues

to improve the capability of medical personnel to cope with the environment and equipment limitation found in the combat scenario. We have also reduced our manpower shortfall necessary for wartime requirements. We have been able to sustain growth in the active component and have realized significant growth in the reserve component. Our strength in readiness bolsters the peacetime health care system. Much of our wartime readiness is enhanced during peacetime through the practice of medical and dental care in our Air Force hospitals.

Conclusion

In closing, I want to emphasize my personal commitment to quality health care services and reducing CHAMPUS costs. Given adequate resources, including money and manpower, we can do the job well. With further cuts in our program, our ability to meet the health care needs of our beneficiary population is uncertain. To do our best, will take strong leadership and greater local management of resources. With your support we can continue to meet the health needs of our military families today and tomorrow.

Senator GLENN. Thank you.

Admiral Zimble.

STATEMENT OF VICE ADM. JAMES A. ZIMBLE, SURGEON

GENERAL OF THE NAVY

Admiral ZIMBLE. First, Mr. Chairman and Senator Wilson, I want to thank you very much for the opportunity to be here. And again, I will make my remarks very brief and submit the statement for the record.

To Senator Wilson, I want to thank you. I am very gratified to see that you have essentially made all of my opening remarks, and I cannot do anything but support everything that you have mentioned earlier regarding readiness and support for our active duty dependents and for the retired.

I just want to add one fine point, and that is that the readiness for going to war, the peacetime care for active duty sailors and marines and their dependents and the retireds and their dependents are all inextricably related. We cannot do one job without the other.

We need the challenges that are provided through medical care of the retired and their dependents in order to stay professional and maintain our cognitive and manual skills to go to war.

Therefore, the space available basis for which they are treated bothers me, unless we make darn sure that we make space available for them. Having facilities which are undermanned and underutilized only serves to show where we have allowed good capital investments to languish and not challenged our providers.

When he gave his posture statement last week, Admiral Trost said Navy men and women are at sea, in ships and aircraft throughout the world, day in and day out, every day of the year. And I hasten to add, Navy medicine accompanies sailors and marines wherever they may be.

Navy men and women are our most valuable resources. And yet, I have to be the first to admit that the medical support for them and their families is eroding.

The Navy is doing its very best to protect medical in the face of some severe officer reductions. We mentioned this just briefly a moment before. This results basically in a double tax against the Navy line: the initial tax is the impact of the smaller base from which to take its cuts, since the medical department officers, fully 16 percent of the officer strength of the Navy lies within the denominator from which those percentage cuts are being taken.

In his posture statement, Admiral Trost said he would not field a hollow Navy. We are dangerously close to fielding a hollow medical department by default. The Navy has necessarily mortgaged the shore establishment and support functions, and medical has been included.

The problem is compounded by medical mortgaging of our smaller facilities in order to support our overseas facilities and our teaching hospitals. And now we are in the process of mortgaging our teaching hospitals.

Now, just as the physical condition of the shore establishment has deteriorated, the competitive edge of our medical department

has been dulled. People are overworked. They feel they are not seen as valuable members of this country's defense team. Others are underutilized and frustrated because of nursing and technician shortages.

Basically, we have entered a period of drought in military budgets. The currency of this drought will be end strength. I do not expect the Chief of Naval Operations or the Secretary of the Navy or the Commandant of the Marine Corps to spend their limited end strength on resources that do not directly contribute to delivering ordnance on target. And frankly, I would do the same.

We have several alternatives: First, contracting; civilian hires; managed care arrangements; and CHAMPUS. And all of those initiatives we have taken, and all of those preserve end strength.

Unfortunately, continuing reliance on these alternatives has the potential of seriously deteriorating the readiness of our medical department. In fact, we are now at less than critical mass. If something is not done very soon, the deterioration will accelerate as residency review programs withdraw their program accreditations. The result will be a cooldown of the medical department, leaving us barely capable of conducting full service sick call on active duty persons.

Now, I would submit there is a way out and that there are five steps that I see to success: First, provide additional medical department end strength;

Second, decouple medical end strength from line end strength; Third, release CHAMPUS dollars for use in contracting;

Fourth, provide the authority to transfer money from O&MN to MPN accounts in order to make the changes in officer compensation so that we can be more competitive with our private sector; And fifth, I would ask for DOPMA relief, not just for the medical corps and dental corps, but all of the medical department officers, in such areas as officer-enlisted ratios, rank structure, and accession and retention age changes.

Now, combine those five measures with a tincture of time and your continued positive support and I think we can reverse the trend.

I thank you for taking the time to discuss Military Medicine. [The prepared statement of Admiral Zimble follows:]