[Appendix, Budget of the United States Government, Fiscal Year 1998]
[Page 889]


                     THE BUDGET FOR FISCAL YEAR 1998

[[Page 889]]

 
                     DEPARTMENT OF VETERANS AFFAIRS

    The 1998 Budget provides $18,705 million in discretionary budget 
authority for veterans' health, benefits, and other services.

    DEPARTMENT OF VETERANS AFFAIRS IMPLEMENTATION OF THE GOVERNMENT 
                       PERFORMANCE AND RESULTS ACT

    The Government Performance and Results Act (GPRA) of 1993 represents 
the primary vehicle through which VA is developing more complete and 
refined performance information to better determine how well its 
programs are meeting their intended objectives.

    During FY 1996, VA made significant advancements toward the 
effective implementation of GPRA by reinvigorating the Department's 
strategic management process; enhancing the performance measures for all 
three of the major program offices; developing an initial set of goals, 
objectives, and performance measures for each of the staff offices; 
continuing its participation as a pilot agency in reports streamlining 
so as to consolidate various reporting requirements into two primary 
documents; and restructuring the annual budget submission so that it 
serves to satisfy the performance planning requirements of GPRA.

    Future GPRA efforts will focus on enhancing the relationship between 
goals of individual programs and goals of the Department; developing 
improved measures of program efficiency (unit cost) and program 
outcomes; modifying information systems to ensure that data are 
available on each measure; developing benchmark levels of performance 
that the organization is ultimately striving to achieve; and better 
linking organizational goals and performance with individual employee 
goals and performance. The ultimate aim is to develop and use a single 
set of performance goals and measures throughout the program planning, 
budget formulation, budget execution, and accountability processes.

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                 NEW RESOURCES FOR VETERANS MEDICAL CARE

    The request in 1998 establishes a new course for veterans' health 
care that emphasizes and supports an emerging dynamic, business-like, 
healthcare system that is innovative and cost effective, and will 
improve the health and well-being of veterans throughout the Nation. The 
VA healthcare system will expand and improve with future budget 
increases provided by the proposed retention of all medical collections 
and user fees. The net total of these is an estimated $468 million in FY 
1998 ($591 million less $123 million in administrative expenses).

    The budget schedule includes a legislative proposal to retain 
earnings from Medical Care Cost Recovery (MCCR) program third party and 
user fee collections as reimbursements to Medical Care starting on 
October 1, 1997. VA also plans to begin a demonstration program in 1998 
to test the feasibility of ``Medicare subvention'', i.e. billing 
Medicare for healthcare provided to Medicare eligible Category C 
veterans. By 2002, assuming that Congress authorizes a Medicare 
subvention demonstration, and it is successful, and that Congress 
decides to allow VA to expand it nationwide, the combination of the 
Medicare reimbursements and allowing VA to retain medical collections 
and user fees would support a 30 percent lower unit cost and 20 percent 
more veterans served with 10 percent of the VA healthcare budget from 
non-appropriated revenues. It would also give veterans more healthcare 
provider choices.

    The schedule also includes appropriation adjustments to have 
Compensation and Pension exams directly funded from Veterans Benefit 
Administration (VBA) resources ($68 million reduced from Medical Care in 
1998), and to allow two-year spending availability for up to 8.3 percent 
(one month) of resources made available.

   Proposal to Supplement Budget Authority with Medical Care Receipts

                          [Dollars in millions]

                                     1996 actual  1997 est.   1998 est.
Budget Authority (BA)...............      16,551      17,013      16,959
Proposal to keep MCCR receipts:
  Gross collections.................                                 591
  Administration cost...............                                -123
  Net Supplement to BA..............                                 468
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Total...............................      16,551      17,013      17,427
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