they have a job that they kneel they have strong self-esteem and they're self-sufficient and independent, and they need this job more than anything else, but would you agree with that? >> i think that's an excellent idea. in principle, i certainly agree with it, yes, sir. >> and so and in fact, those employers that hire these people should be singled out with merit, and recognized somehow in their cooperation with the designation that they are hiring these roughly, you know, 1,300, 1,400 people so across america a person can look and say that's a company doing a great service for our veterans and for this nation. so captain, i want to thank you for your service, for your sacrifice. it's truly a pleasure for me to represent you and the folks in gainesville. thank you. >> captain pruden, i was going to cut you some slack until i found out you went to the

university of florida, and so you and i are probably going to have to go head to head. all kidding aside, after this is over i want to talk to you about something i want to do privately with wounded warriors. >> yes, sir. >> i think what i've heard from certainly with the prosthesis and a limb loss and so on are the very individual care that veterans need, and that relationship they have with their provider is very important, and may go on a lifetime, as that person either in private practice or with the va and i'd just like to have you all's comment about, and i can understand this saving taxpayers money but captain, i could not agree more, we're not going to balance this budget on the backs of people who have lost limbs in service to this country, whether it's going to a private prosthetist or va, wherever they go, they need to get the best care there is. we need to measure apples to apples because i don't think

$3,000 probably looks at the cost of the light bill, the water bill. i think probably if you really dig down into it my bet is it's the actual cost of the prosthesis, the materials and putting it together. that's not anywhere near the cost if you've ever run a business to the overhead of your person doing it's insurance, their retirement, all the things that go into running a business. i think what i heard you say, i completely agree with, captain pruden, about we could set this back, if we do what the va is going to do in delay and what was said by mr. meyer right before you about just an inconvenience. it's like you said, you can't go out and walk your doctor or whatever it may be, whatever function you may have. the other thing i would argue a little bit, i wouldn't argue but just to comment with congressman sterns is that what i see with a lot of these wounded warriors, they want to go back to a regular life and use this pr

prosthes prosthesis, not to have any advantage but to do what they used to do before they went into the military. am i wrong on that or not? >> i think, too, that's, the employment issue is obviously important for many veterans but it all comes down to their ability to doing what they want to do to regain their function, to live, to have a quality of life, and that comes down to the care that they're going to get, the lifelong care they're going to get at va and maintaining their prosthetic items in a timely manner. >> a brief example i had been here probably six months in congress, this is only my second term, and had been to walter reed and was walking down the steps, spanky, he worked here, a major, i didn't know he was an amputee until i saw him go down the steps. he had returned to duty, and was carrying on exactly like he always had and when i saw him and we sat down and had a little talk about that, but that was

amazing to me that he was able to do that and for months i saw him walking out of here and didn't know he was an amputee. that's the kind of return to duty that people want and when they've lost an extremity and some obviously are more horrific than others but i believe that's the goal of every wounded warrior is to be able to go back to what they did and assume the life they had before they signed on and took the pledge. i appreciate you all's testimony and certainly every one of you service to our nation and i will call our next panel. >> thank you.

joining success linda halladay, inspector for audits and evaluations for the office of inspect wror general, ig, u.s. department of veterans affairs, accompanied by nicholas dal, bedford office of audits and eveilitions, kent warful, evaluations for ig and dr. john day, assistant inspector general for health inspections for the ig, dr. day accompanied by dr. yang for the physician of health care and fpgss for the ig. miss halladay, we'll begin with you. >> representative rowe, ranking member hichaud and members of the subcommittee thank you for the opportunity to discuss the

results of our two recent reports on vha's management and acquisition of prosthetic limbs in the management of supply inventories. we conducted our work at the request of the house veterans affairs. todayly discuss our efforts to evaluate va's capabilities to deliver state-of-the-art prosthetic limb care and managed prosthetic supply inventories in its medical centers. in our first report, we examined the procurement practices and the costs paid for prosthetic limbs. we identified opportunities for vha to improve payment controls to avoid overpaying for prosthetic limbs and to improve contract negotiations to obtain the best value for prosthetic limbs purchased from contract vendors. with regard to the cost comparisons in our report, addressing va fabricating the

prosthetic limbs, or processing these limbs via contract, our report concluded va lacked information to make the decisions it needs to make to know whether it should continue with the use of the labs or to rely on contracts to provide these limbs. in no way did we address cutting the quality of the requirements to purchase a limb. this was the focus was on the contract contracted administration piece and the piece is that va entered into contracts with vendors to provide limbs, at certain prices. what we looked at was that the invoices were coming in. they lacked an adequate review process prior to certification for payment, in which case resulted in overpayments. that's a contract administration

issue and i want to be very clear, we did not say cut the quality of a prosthetic limb for any of these veterans, but clearly it is an opportunity to, if you can fix this control, you can then reprogram the funds saved to provide more prosthetics care for veterans. the overpayments for prosthetic limbs were a systemic issue in 21 integrated veteran service networks where we identified overpayments in 23% of all the transactions paid in 2010. the overpayments generally occurred because invoices received from vendors, they lacked adequate review. as a result, the vendor invoices were just processed with charges in excess of the prices in the vendor contracts. we reported vha would continue to overpay prosthetic limbs for

about 8.6 million over the next four years if it did not take action to strengthen these controls. we also found the contracting officers were not always negotiating to obtain a better discount rate with vendors. without negotiations for the best discount rates obtainable, vha cannot be assured it receives the best value for the funds it spends to buy prosthetic limbs. we noted that taking action to ensure contracting officers consistently negotiate better discount rates in no way compromises the quality of the prosthetic limbs va buys. we also found and made a very clear point in our report that the vha guidance states the prosthetic service should periodically conduct evaluations to ensure prosthetic labs are operating effectively, economically as possible. we found that the va officials

suspended their review of labs in january 2011, after reviewing only 9 of the 21 visions nationwide. because reviews are all visions were not conducted, prosthetic service was unaware of its in-house fabrication capabilities or costs. vha lacked the information to know if its labs are operating effectively or efficiently. we were never trying to draw a cost comparison between the numbers in the report. those were the only numbers available at the time, and we clearly recognize it was not an apples to apples comparison. it is footnoted in the report to talk of the costs that are not in the va costs where you would have profit and overhead of a contract vendor. we also in our second report, we

adressed va's prosthetic supply inventory management and offered a comprehensive perspective of the suitability of vha's prosthetic management supplies and procedures. we also recommended vha inventory systems with a modern inventory system. we reported that strengthening va's management of prosthetic supplies inventories in its va medical centers will reduce costs and minimize the risks of supply expiration and disruption to patient care due to supply shortages. for almost 60% of the inventoried prosthetic items, va mcs did not maintain optimal inventory levels. for almost 93,000 inventory items, we estimated va inventories either exceeded current needs for approximately 43,000 items or the inventories

were too low for 10,000 items. further, we saw that documentation for an annual required wall-to-wall physical inventory had not been performed. this occurred because va mcs did not consistently apply basic inventory practices or techniques. for example, va mcs did not set normal reorder or emergency stock levels in their automated inventory system, for over 90% of the prosthetic items. it led to the mcs spending to purchase prosthetic supplies in excess of their needs and that increases the risk of supply expiration, theft and shortages. in fact, the controls are so weak, the losses associated with any diverse could go undetected.

improvements in inventory practices in accountability over prosthetic inventory is still needed. vha must improve its inventory management system and replace its inventory systems by 2015. we are pleased to see that va is adopting practices to achieve greater savings, along with providing more attention to ensuring the fiscal stewardship and contract administration of the funding needed for prosthetic care in response to the issues we reported on. we'll be happy to take any questions. >> thank you, mishalliday. dr. day? >> thank you, members of the committee, it's an honor to be here to speak with you on our report on prosthetic limb care in the va. we've done a series of reports on what i would call transition to care and in the reports we've

allied ourselves with the dod ig last november who helped us gain access to dod data and also we've used dr. klegg in my office who is a biostatusition to try to get the metrics right and quite an expert on population health. we've reported on moderate tpi, access to mental health in hont month, combat stress in women veterans, this report on prosthetics and one we just published on homelessness in this population. this transition is important to us and we thank you and your staff's support for this work. we looked at two populations in this report, one is a population of about 500,000 veterans who left dod and became veterans in the 2005-2006 time frame, and we were then able to follow those veterans as they transitioned through va and then received several years of va care and there were a couple of outcomes from that data that i think are worth noting. one was it was surprising to me, maybe not to those who work with

this population all the time, that it wasn't just the limb that was affected in these patients. every organ system you looked at by diagnostic category had significantly elevated disability or medical disease burden in this population. so whether it's that the blast injury they suffer at the time that they're injured or the other circumstances of trauma and recovery on the battlefield, are unclear, but this is a population that has quite a significant disease burden beyond those that you would think of. the second feature that stood out from that analysis was the problem of pain management and substance use disorders. in addition to the normal mental health issues that this population would be expected to have, again, i can't speak out enough the difficulty that this population has with these disorders and the difficulty that va currently has and

society has in dealing with these issues. the second population that we looked at, we got with the help of dr. paul pesquina at walter reed, both the older walter reed and the new bethesda campus who is a pysyiatrist and mr. charles skoeville, and they provided us their data set of combat injured veterans from the recent wars who had major amputation. at the time we got our information, 180 amputations were not traumatic, they were related to some other feature. 38 of those individuals were dead which left us with 1,288 individuals with combat related major amputations. of that number about 450 remained on active duty, some of whom were employed and some of whom it appears to us were severely medically ill and dod

seemed to be keeping them to make sure that they were in a better condition when discharged from dod. that left us with about 838 traumatic major amputations of the upper and lower extremeities we tried to assess. divide it by 150 medical centers and we did plot out addresses for these folks you find out this population, they're everywhere in the united states so there is a simple problem of having 10 or less on average without knowing specifically patients who have these problems across the va just as a point of reference, whereas when you look at the elder population the va normally takes care of, it looked to us they have several thousand major amputations a year, it's mostly older gentleman who have diabetes or vascular disease. there is a significant

difference there. we telephone, surveyed and visited in person these returnees from the war trying to get a feeling of what what we were seeing on tv and the press was how well these gentlemen and women were doing. was it the same ten people playing softball all the time or in general are the folks doing very well. i would say that we are very, very impressed that this population which entered the military with a can do and follow me attitude has maintained that and i don't believe what we see on tv is an aberration. i believe in general this population is doing extremely well. one caveat the folks at walter reed were concerned about the 33 veterans at the time that i give you the number, 1,500, who had three and four-limb amputations, and that population we were unable to see enough of to get a

clear feeling of how they're doing but i do believe they are significantly more impacted in a total body sense from those who have one or two amputations, enough to be really i think a different category of disease. i think that we also heard in our interviews and in our discussions with these veterans essentially the same comments you heard from the previous two panels and i won't go through those except to say that people wanted to know why they couldn't take a picture of their broken extremity and send it in by e-mail and try to expedite the paperwork involved in trying to get the billing process and the bureaucracy of things done. we have had conversations with dr. beck and her staff, they're well aware of these issues and i think i'm confident that they're thinking about how to best deal with these issues and they'll be on the next panel to discuss the

changes that they would propose, but we've been, they've been very cooperative, i think, in trying to come up with what the right answer it. we made three recommendations. one was ask the va to consider this data set which has previously not been available in the detail we published it and i think va has done that in trying to tailor their care. we do believe the upper extremity veterans both in the surveys that we've done have for a variety of reasons a great deal more difficulty than those with lower extremity. we do urge the research be done and that the appropriate level of effort be made to get those upper extremity prosthetics up to speed. thirdly, we ask va to deal with the bureaucracy in a way that would lessen the aggravation that veterans who have these difficulties have in trying to make their way through the system. with that, i will end my

testimony and be glad to answer any questions that you have. thank you. >> i thank the panel. i just have a couple observations and of course, we appreciate you being here and testifying today. miss halliday, it doesn't look like a huge issue, but just with the simple changes in contracting, i certainly understood what you were saying. this doesn't change the quality of the prosthesis at all. it may be the same one, if you just negotiate a lower price for the same. am i correct? is that what you were saying? >> you are definitely correct. what we were concerned was if we have an existing contract with a vendor, and it says that you're going to charge $10 for an item, and the invoices start to come in, if they're not reviewed and you really charged $15 or $20, that's the point we wanted to see the savings. that would be money could be reprogrammed to prosthetics care. >> that shouldn't be a big issue. that's not -- i mean, it's

money-wise, it's a significant amount of money that could be spent because as the captain or whoever said a minute ago, there were $54 million in the va budget that's not a lot of money that's spent on all this prosthetics. i guess the savings there would be fairly significant. and prosthesis, i think we, i state myself as a layperson, in the va terminology, we would think of it as a limb. it could be any -- it could be a hearing aid, wheelchair or crutch. am i correct on that? >> it was, but this report that we issued looked at the limbs. >> just at the limbs. >> yes. >> okay. you also agree that this was not an apples to apples, when you were looking at it, not really sure what that $2900 -- >> we absolutely agree with that. it was the only cost information available. we put it in the report and clearly said it wasn't apples to apples in our footnote there.

the fact was va did not have good information to make decisions on whether it should have labs, whether the labs could provide these items at a more economical cost and the same quality, they just did not have that type of information when my team went out. >> dr. daigh, fascinating data that you had that you presented. did i hear right that there were 33 that had three amputations, more than two? >> yes, sir. it was roughly -- i believe the number we had in the report was 33 individuals who had three or four limb amputations who were alive at the time we did this report. >> i think the challenge is now, and i'll just be very brief here, mr. michaud and i went to afghanistan a few years ago and i went again in october of this past year and just from a physician's viewpoint, the treatment of trauma care has changed dramatically from the

time i was in the service and you can see the results. the results are a lot of people are surviving horrific injuries and if you don't die of your injury on the battlefield, you have about a 95% chance now of surviving that injury as opposed to when mr. reyes was in vietnam, which was a lot less than that, i can tell you. so we are going to have to deal with these issues going forward and we should, and i guess the question i have for you is do you agree with what captain pruden said a moment ago about if the va changes its procurement and so forth, this will be detrimental, in other words, should we just keep doing what we're doing and tighten up on what miss halliday said. walmart can tell you when a tube of toothpaste went out the door and replace it so we should be able to do that. the va, it sounds like by 2015, that should be implemented. do you agree? >> well, sir, i didn't look at the business practices by which

these prosthetics are determined which is appropriate and procured. we simply in this report looked at the populations that existed and tried to understand who they were and what was going on with them. similarly to the gentleman on the second panel, we didn't look at the effectiveness of one prosthetic over another or, you know, the cost effectiveness of different measures. we simply did a population health study. so i don't have a comment on that, sir. >> and i think the other thing you said, just to make sure that we all understand it, is that the cohorts in this study had multiple co-morbidities. it wasn't just i lost my leg below the knee and that's the only thing wrong with me. am i correct there? >> it was very impressive to me that the total body injury that these men and women had sustained which to the outward appearance would mostly be looked at as a prosthetic arm or

leg. >> i yield to mr. michaud. >> thank you very much, mr. chairman. my question is, one of your recommendations, i'll quote, consider veterans' concerns with the approval process of va contract care for prosthetic service to meet the needs of veterans with amputations, end of quote. would you expound a little bit more on that recommendation in details? is the reason why you came up with that because you were finding that veterans are being denied care or unduly delayed in receiving care? >> what we found in interviews with veterans were complaints similar to what the first panel expressed, and that was these men and women are active. they're going to school, they have families, they have lives. if their prosthetic breaks, they want it fixed immediately. they don't want to have to get in the car and drive some place

to have an examination done or to get the paperwork, you know, accomplished appropriately. we in our work did not analyze the business practices of making that happen, so i didn't feel i was in a position to offer advice as to how to fix that problem, but we did sit down and have discussions with dr. beck and others to lay out what we thought the problem was. dr. yang and others gave comments directly as to what we heard, then we asked vha to consider how they're doing their work and see if they can't improve that. at this point in time, i'm not knowledgeable enough, unfortunately, to give you advice on exactly what i think they should do different. i wish i could, but i don't have that information. >> there has been some discussion and was clarified as far as the cost and the savings comparing apples to apples, and the management of the inventory. have you or your sister agency

ever done a report within the department of defense to find out what the cost, comparing dod to va, is the cost equal, number one, and secondly, you talked about the inventory management. is your recommendation consistent with what actually the department of defense is doing or do they have the same problems that va has in regards to cost and inventory management? >> with respect to the provision of care and the way va and dod are different, i think is that dod has i believe focused the care of patients who are badly injured from war at several discrete centers and by them getting a large enough group of patients continuously there, they're able to put the resources in those select several places, d.c., maybe san diego, bethesda, san antonio,

maybe one or two others, and then provide cost effective state of the art care. va is a much more dispersed organization and the veterans live throughout the country. they have already been through the acute trauma, they're up and about, so it's a little bit of a different problem. as to the second question, we have done no work on the cost of dod to compare to va on providing the same level of care. >> when you talk about the wounded warrior utilizing the dod versus va, the numbers are higher in dod, do you know how many veterans the newer generation veterans are still utilizing the department of defense versus going into the va because they feel more -- they feel they're getting better service at dod, and