[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]












   U.S. DEPARTMENT OF VETERANS AFFAIRS BUDGET REQUEST FOR FISCAL YEAR

=======================================================================

                                HEARING

                               before the

                     COMMITTEE ON VETERANS' AFFAIRS
                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                      WEDNESDAY, FEBRUARY 11, 2015

                               __________

                            Serial No. 114-7

                               __________

       Printed for the use of the Committee on Veterans' Affairs

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                     COMMITTEE ON VETERANS' AFFAIRS

                     JEFF MILLER, Florida, Chairman

DOUG LAMBORN, Colorado               CORRINE BROWN, Florida, Ranking 
GUS M. BILIRAKIS, Florida, Vice-         Minority Member
    Chairman                         MARK TAKANO, California
DAVID P. ROE, Tennessee              JULIA BROWNLEY, California
DAN BENISHEK, Michigan               DINA TITUS, Nevada
TIM HUELSKAMP, Kansas                RAUL RUIZ, California
MIKE COFFMAN, Colorado               ANN M. KUSTER, New Hampshire
BRAD R. WENSTRUP, Ohio               BETO O'ROURKE, Texas
JACKIE WALORSKI, Indiana             KATHLEEN RICE, New York
RALPH ABRAHAM, Louisiana             TIMOTHY J. WALZ, Minnesota
LEE ZELDIN, New York                 JERRY McNERNEY, California
RYAN COSTELLO, Pennsylvania
AMATA COLEMAN RADEWAGEN, American 
    Samoa
MIKE BOST, Illinois
                       Jon Towers, Staff Director
                Don Phillips, Democratic Staff Director

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hearing records of the Committee on Veterans' Affairs are also 
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                            C O N T E N T S

                              ----------                              

                      Wednesday, February 11, 2015

                                                                   Page

U.S. Department of Veterans Affairs Budget Request for Fiscal 
  Year...........................................................     1

                           OPENING STATEMENTS

Jeff Miller, Chairman............................................     1
    Prepared Statement...........................................    51
Corrine Brown, Ranking Member....................................     3
    Prepared Statement...........................................    53

                               WITNESSES

Hon. Robert A. McDonald, Secretary, VA...........................     4
    Prepared Statement...........................................    54

    Accompanied by:

        Dr. Carolyn Clancy M.D., Interim Under Secretary for 
            Health, VA
        Hon. Allison A. Hickey, Under Secretary for Benefits, VA
        Mr. Ronald E. Walters, Interim Under Secretary for 
            Memorial Affairs, VA
        Ms. Helen Tierney, Executive in Charge for the Office of 
            Management, and VBA Chief Financial Officer, VA
    And
        Mr. Stephen Warren, Executive in Charge and Chief 
            Information Officer, Office of Information and 
            Technology, VA

Mr. Carl Blake, Associate Executive Director, Government 
  Relations, Paralyzed Veterans of American, On Behalf of the Co-
  Authors of the Independent Budget..............................    40
    Prepared Statement...........................................    80
    Accompanied by:
        Mr. Joseph A. Violante, National Legislative Director, 
            Disable American Veterans
        Mr. Ray Kelley, Director, National Legislative Service, 
            Veterans of Foreign Wars
        Ms. Diane M. Zumatto, National Legislative Director, 
            AMVETS
Mr. Ian de Planque, Legislative Director, The American Legion....    42
    Prepared Statement...........................................    87

                             FOR THE RECORD

The Independent Budget for the Department of Veterans Affairs....    92
Secure Sharing of Health Information to Improve Patient Care.....   113
Question for the Record..........................................   118
Part I Overview Information......................................   173
 
U.S. DEPARTMENT OF VETERANS AFFAIRS BUDGET REQUEST FOR FISCAL YEAR 2016

                              ----------                              


                      Wednesday, February 11, 2015

             U.S. House of Representatives,
                    Committee on Veterans' Affairs,
                                                   Washington, D.C.
    The committee met, pursuant to other business, at 10:35 
a.m., in Room 334, Cannon House Office Building,
    Hon. Jeff Miller [chairman of the committee] presiding.
    Present:  Representatives Miller, Lamborn, Bilirakis, 
Benishek, Huelskamp, Coffman, Wenstrup, Abraham, Costello, 
Radewagen, Brown, Brownley, Titus, Kuster, O'Rourke, Rice, 
McNerney, and Walz.

           OPENING STATEMENT OF CHAIRMAN JEFF MILLER

    The Chairman. The hearing will come to order.
    We are here to discuss the President's fiscal year 2016 
budget request for the Department of Veterans Affairs.
    Mr. Secretary, welcome to the committee. I understand that 
your testimony will be a little bit different today than what 
we are accustomed to with reference to charts to help us better 
understand what you are seeing in terms of the challenges that 
lay ahead.
    And I would say that is indeed a welcomed change. So, too, 
is the openness that you have had with me, with the Members of 
this committee, and this Congress about your plans to change 
the culture at VA.
    As your testimony illustrates, you have been extremely 
active in visiting VA facilities, I think it is well over 90 at 
this point, talking with employees, veteran groups, and your 
private sector colleagues with one aim in mind, putting 
everyone's focus squarely on the needs of veterans.
    Thank you for your willingness to take the job of secretary 
and thank you for putting everything that you have into that 
job.
    Turning to the business of examining the VA budget request, 
I see some very positive things, but also there are some areas 
where we will have considerable question marks.
    The committee's task will be to learn as much as possible 
in order to inform our views and estimates letter that is due 
next Friday.
    On the positive side, Mr. Secretary, you have boldly 
tackled a very sensitive issue of VA's aging infrastructure 
coupled with a more realistic budget request for VA's major 
construction program. Addressing the closure of unsafe, vacant, 
or underutilized facilities begins an important conversation 
about the future alignment of VA's infrastructure.
    I have long argued that we needed a strategic reassessment 
of VA's construction program. That is in part what the 
independent assessment and the Veterans Healthcare Commission 
established in last summer's Choice Act were tasked with 
examining.
    You have my commitment and this committee's commitment to 
work with you as this conversation begins in earnest.
    Now, I have several areas of concern that I hope you and 
our second panel can address. First, and I am going to be frank 
as I have in the past with you on this particular issue, the 
proposal to reallocate any portion of the $10 billion 
appropriation for the Veterans Choice Program is a non-starter.
    I understand there is a great degree of uncertainty about 
the program's utilization. But in appropriating the money, the 
Congress had to work with the best estimates that we had at the 
time to stretch those dollars including limited eligibility 
criteria for veterans.
    So if there is going to be any reallocation, it is going to 
be to further improve and strengthen the program itself and not 
address other unspecified needs.
    Secondly, the budget requests an additional $1.3 billion 
for VA medical care on top of the advanced appropriation for 
fiscal year 2016, bringing the total proposed increase to 7.4 
percent.
    At a threshold level, I do not understand how this request 
interacts with the $15 billion that Congress provided last 
summer for non-VA care and infrastructure as part of the 
Veterans Access, Choice and Accountability Act.
    It would appear that there are considerable unknown 
variables in this area such as the degree to which the Choice 
Program alleviates the workload and resource pressure on VA, 
the productivity standards that VA should expect from its 
clinical workforce, and the ability for VA to hire medical 
professionals in the face of an already large vacancy rate and 
a national shortage of healthcare professionals.
    I hope to expand on this a bit more during questioning.
    Thirdly, I note the 6.5 percent increase for the Veterans 
Benefit Administration principally to hire additional staff to 
address the workload.
    Mr. Secretary, there are several of us on this committee, 
the ranking member included, who have long memories on this 
issue. We know the disability claims staffing has doubled in 
ten years and nearly tripled since I arrived in Congress in 
2001. We have invested over a half a billion dollars in VBMS, 
millions more in other systems, and we have provided tools to 
encourage veterans to file fully developed claims which in turn 
enables a quicker decision.
    All of these investments were made with a promise that 
productivity would markedly improve and shift the department 
away from the usual trend of relying on an ever-increasing 
workforce and overtime to deal with the workload.
    Although I note the production improvement in the backlog 
over the last two years, it is a far cry from seeing individual 
worker productivity improve given the resources that have 
already been provided to the department. Again, this is another 
area I hope to address in questioning.
    And, finally, a big lesson learned last year is that 
veterans are better served with constant and aggressive 
oversight. Ms. Brown and I have asked for a larger committee 
budget towards that end.
    One thing that you and I have talked about is the Office of 
Inspector General. I, too, believe that they need an increase 
larger than the .3 percent increase provided in the budget. The 
proposed amount is not even enough to cover inflationary costs, 
let alone the increased oversight we all rely on so heavily.
    Again, Mr. Secretary, thank you for what you are doing. I 
look forward to your testimony and I look forward to hearing 
from the veteran service organizations on the second panel. The 
VA system is for them and those they represent, so their input 
on budgetary matters is critical in informing the committee and 
the Congress on VA's budget request.

    [The prepared statement of Chairman Jeff Miller appears in 
the Appendix]

    And with that, I recognize Ms. Brown for her opening 
remarks.

       OPENING STATEMENT OF RANKING MEMBER CORRINE BROWN

    Ms. Brown. Thank you, Mr. Chairman.
    And welcome, Mr. Secretary. I want to say that I am very 
happy that you are here this morning and I am looking forward 
to hearing how this budget request will meet the needs of our 
veterans.
    The President has proposed a large increase for VA. For 
fiscal 2016, the President has proposed nearly an eight percent 
increase in funding for VA healthcare, personnel, construction, 
research, and claim processing.
    Given this large request, I am looking forward to our 
discussion today and how it will assist our work as a committee 
to make sure that this proposed budget gives you the dollars 
that you need but also assures us how in Congress that every 
dollar you receive will be spent wisely.
    I certainly wish that my bill, H.R. 216, the Department of 
Veterans Affairs Budget Plan and Reform Act of 2015, was the 
law of the land. It is an important tool to assist us and you 
in matching resources to the needs of our veterans and ensuring 
that we are planning for the future to make sure that we don't 
let our veterans down.
    Mr. Secretary, the first question I will ask is does your 
proposed budget give you all of the dollars you need to fix the 
problems that you face, meet the goals and initiatives the 
department has laid out, keeping in mind that funding provided 
by the Choice Act.
    I hope that we can discuss whether you have enough 
resources to ensure that veterans do not face intolerable 
delays in getting access to healthcare. I hope we can discuss 
how you are looking down the road to ensure that veterans have 
the access to VA care in the future.
    I always hear from veterans how they prefer VA care when it 
is available. I hope that we are going to all work together to 
make sure that healthcare our veterans prefer is available to 
them when they need it.
    This is the first year that VA benefits programs will be 
fully funded under advanced appropriations, how veterans won't 
have to worry about what we are doing in Congress, and it won't 
affect how we operate.
    Finally, I want to hear about your reform and 
reorganization efforts and how this budget request will support 
these efforts.
    I also want to hear about how you are making progress in an 
effort to reform and re-energize, invigorate the VA. Too often 
all we hear about is the problems VA is having. I would like us 
to also consider what we can do to fix those problems and to 
point out what VA is getting right.
    I am pleased with this budget request and I hope these 
dollars can fix what is wrong and strengthen what is right with 
the VA.
    And with that, Mr. Chairman, I yield back the balance of my 
time.
    The Chairman. Thank you very much, Ms. Brown.

    [The prepared statement of Ranking Member Corrine Brown 
appears in the Appendix]

    I would like to welcome our first panel to the table this 
morning.
    Accompanying the Honorable Robert McDonald, Secretary of 
the Department of Veterans, is Dr. Carolyn Clancy, Interim 
Under Secretary for Health; the Honorable Allison A. Hickey, 
Under Secretary for Benefits; Mr. Ronald Walters, Interim Under 
Secretary for Memorial Affairs; Ms. Helen Tierney, Executive in 
Charge for the Office of Management, and VA Chief Financial 
Officer; and Mr. Stephen Warren, Executive in Charge and Chief 
Information Officer with the Office of Information and 
Technology.
    Mr. Secretary, again, thank you for being here and please 
proceed with your statement.

STATEMENT OF ROBERT A. MCDONALD, SECRETARY, U.S. DEPARTMENT OF 
VETERANS AFFAIRS, ACCOMPANIED BY CAROLYN CLANCY, INTERIM UNDER 
  SECRETARY FOR HEALTH, U.S. DEPARTMENT OF VETERANS AFFAIRS; 
     ALLISON A. HICKEY, UNDER SECRETARY FOR BENEFITS, U.S. 
  DEPARTMENT OF VETERANS AFFAIRS; RONALD E. WALTERS, INTERIM 
   UNDER SECRETARY FOR MEMORIAL AFFAIRS, U.S. DEPARTMENT OF 
 VETERANS AFFAIRS; HELEN TIERNEY, EXECUTIVE IN CHARGE FOR THE 
  OFFICE OF MANAGEMENT, AND VA CHIEF FINANCIAL OFFICER, U.S. 
 DEPARTMENT OF VETERANS AFFAIRS; STEPHEN WARREN, EXECUTIVE IN 
CHARGE AND CHIEF INFORMATION OFFICER, OFFICE OF INFORMATION AND 
        TECHNOLOGY, U.S. DEPARTMENT OF VETERANS AFFAIRS

                STATEMENT OF ROBERT A. MCDONALD

    Secretary McDonald. Thank you.
    Chairman Miller, Ranking Member Brown, Members of the 
committee, thanks for the opportunity to discuss VA's 2016 
budget and 2017 advanced appropriations request.
    Thank you as well for joining me at 810 Vermont last week 
for a groundbreaking town hall meeting.
    We deeply appreciate the President's and Congress's 
steadfast support for veterans, their families and survivors, 
as well as the advocacy of veteran service organizations.
    Our Nation is emerging from the longest war in its history. 
VA is emerging from one of the most serious crises the 
department has ever experienced. We now have before us the 
greatest opportunity we have ever had to improve care for 
veterans and to build a more efficient and more effective 
system. With your support, VA intends to take full advantage of 
this remarkable timely opportunity.
    Members of this committee and VSOs share my goal to make 
the VA a model agency with respect to customer experience and 
stewardship of taxpayer resources, an example for other 
government agencies.
    With efficient and effective operations, we look to be 
comparable to the very top private sector businesses. This is 
how we best meet the Nation's obligations to all veterans.
    The cost of fulfilling those obligations to our veterans 
grows and we expect it will continue to grow for the 
foreseeable future. We know that services and benefits for 
veterans do not peak until roughly four decades after a 
conflict ends.
    [Chart]
    Secretary McDonald. This chart demonstrates the number of 
veterans receiving service-connected disability benefits from 
World War I peaked in 1958. For World War II, it peaked in 
1985. For Korea, it peaked in 1993 and for Vietnam veterans, it 
was just last year, 2014, when it peaked.
    It is worth remembering that today, almost 150 years after 
the Civil War ground to a halt, VA is still providing benefits 
to the child of a Civil War veteran. We still have troops in 
both Iraq and Afghanistan. And in the last decade, we have 
already seen dramatic increases in the demand for benefits and 
care.
    [Chart]
    Secretary McDonald. This chart shows how for 40 years, from 
1960 to 2000, the percentage of veterans receiving compensation 
from VA was stable at about eight and a half percent. But in 
the last 14 years, since 2001, the percentage has dramatically 
increased to 19 percent, more than double.
    Simultaneously, the number of claims and the number of 
medical issues in rating related claims that VA has completed 
has soared.
    [Chart]
    Secretary McDonald. As this chart shows, in 2009, VBA 
completed almost 980,000 claims. In fiscal year 2017, we 
project we will complete over 1.4 million claims. That is a 47 
percent increase. But there has been even more dramatic growth 
in the number of medical issues in claims, 2.7 million in 2009 
and a projected 5.9 million in 2017. That is a 115 percent 
increase over just eight years.
    These increases were accompanied by the dramatic rise in 
the average degree of disability compensation granted to 
veterans. For 45 years, from 1950 to 1995, the average degree 
of disability held steady at 30 percent. But since the year 
2000, the average degree of disability has risen to 47.7 
percent as this chart shows.
    [Chart]
    Secretary McDonald. So while it is true that the total 
number of veterans is declining, the number of those seeking 
care and benefits from VA is increasing. Fueled by more than a 
decade of war, Agent Orange related disability claims, an 
unlimited claims appeal process, increased medical claim 
issues, far greater survival rates among those wounded, more 
sophisticated methods for identifying and treating veterans' 
medical issues, demographic shifts, veterans' demands for 
services and benefits has exceeded VA's capacity to meet it.
    It is important that Congress and the American people 
understand why this is happening. The most important 
consideration is that America's veterans are aging. As with any 
population, healthcare requirements and the demand for benefits 
both increase as veterans age and exit the workforce.
    [Chart]
    Secretary McDonald. This chart reveals an astounding shift. 
In 1975, the year I graduated from West Point, just 40 years 
ago, only 2.2 million American veterans were 65 years old or 
older, 7.5 percent of our veteran population. In 2017 here on 
the far left, we expect 9.8 million will be 65 or older or 46 
percent of veterans. That is 7.5 percent to 46 percent, an 
astounding increase.
    So today we serve a population that is older with more 
chronic conditions and less able to afford private sector care. 
We predict that benefits for veterans of recent conflicts will 
peak around 2055 if we assume that Afghanistan and Iraq are 
winding down this year.
    And it is fair to imagine that Members of Congress, the 
President, and the secretary of Veterans Affairs in 2175 will 
be debating resources that will in part help care for the 
family members of Iraq and Afghanistan veterans.
    Currently 11 million of the 22 million veterans in this 
country are registered, enrolled, or use at least one VA 
benefit or service. Veterans are demanding more VA services 
than ever before. The number of all veterans who are seeking VA 
medical care is steadily growing.
    The requirement for women veterans, a very important issue 
for us, and mental health, another very important issue for us, 
have increased dramatically. Over 635,000 women veterans are 
now enrolled in VA healthcare and over 400,000 actively use VA 
for care. That is double the number using VA care in the year 
2000.
    We see annual increases in women veterans seeking care of 
about nine percent and this trend will continue and probably 
even go higher. Our women veteran call center now connects with 
over 100,000 women veterans per year.
    Over 1.4 million veterans with a mental health diagnosis 
are enrolled in VA, an increase of 64 percent from the year 
2015. There were approximately 19.6 million mental health 
outpatient encounters in 2014. That is an increase of 72 
percent from 2005.
    Since its inception in 2007 through 2014, the veterans' 
crisis line has answered over 1.6 million calls and assisted in 
over 45,000 rescues. Over one million veterans received 
services through the primary care mental health integration 
program begun in 2007 through November 2014. The annual number 
of encounters has grown from about 182,000 in fiscal year 2008 
to over one million in 2014.
    As veterans witness the results of the positive changes VA 
is making and regain trust in the VA and as the military 
simultaneously downsizes, the number of veterans choosing VA 
services will continue to rise. It should and our veterans have 
earned it.
    We are listening hard to what veterans, Congress, 
employees, VSOs, and other stakeholders are telling us. And 
what we hear drive us to a historic, unprecedented department-
wide transformation changing VA's culture and making the 
veteran the center of everything that we do.
    That transformation we call MyVA because that is the way we 
want veterans to think about VA. It is theirs. It is 
personalized. It is customized. And this transformation entails 
many organizational reforms to better unify the department's 
efforts.
    MyVA focuses on five objectives, which I have shown here on 
the bottom. First is improving the veteran experience so that 
every veteran has a seamless, integrated, and responsive 
customer service experience every single time.
    Second, improving the employee experience and eliminating 
barriers to customer service to achieve people excellence so 
employees can better serve veterans. We have no hope of taking 
care of veterans if we don't take care of the employees of VA.
    Third, improving our internal support systems and services.
    Fourth, establishing a culture of continuous improvement so 
local levels can identify and correct problems more immediately 
and then replicate proven solutions across our entire network.
    And, fifth, enhancing strategic partnerships. MyVA 
revolutionizes VA's culture and reorients the department around 
the needs of veterans, measuring success by veterans' outcomes 
as opposed to some kind of internal metrics.
    We intend every veteran to have a seamless, integrated, and 
responsive customer service experience every single time.
    Reorganizing the department geographically is a first 
substantial and important step in achieving this goal.
    In the past, VA had nine disjointed geographic organization 
structures, one for each line of business. So imagine a 
business with nine different businesses, nine different sub-
businesses each having a different organization structure and a 
different middle management.
    Our new unified organizational framework has one national 
structure as shown in this chart.
    [Chart]
    Secretary McDonald. This new structure has just five 
regions aligning VA's disparate organization boundaries into a 
single framework. This facilitates internal coordination and 
collaboration among business lines, creates opportunities for 
integration at a much lower level, and promotes effective 
customer service. Veterans will see one VA rather than 
individual disconnected organizations.
    Last, MyVA is also about ensuring VA is a sound steward of 
taxpayer dollars. We will integrate Lean Six Sigma systems and 
efficiencies across our operations to ensure we balance 
veteran-centric service with operational efficiency, but we 
need the help of Congress.
    VA cannot be a sound steward of the taxpayers' resources 
with the asset portfolio that we are currently carrying. No 
business would carry such a portfolio. Veterans deserve much 
better. It is time to close the VA's old substandard and 
underutilized infrastructure.
    Nine hundred VA facilities are over 90 years old and more 
than 1,300 are over 70 years old. VA currently has 336 
buildings that are vacant or less than 50 percent occupied. 
That is 10.5 million square feet of excess, which costs us an 
estimated $24 million a year to maintain. These funds could be 
used to hire roughly 200 registered nurses for a year or to pay 
for 144 primary care visits for veterans or to support 41,900 
days of nursing home care for veterans in community living 
centers.
    We need your support to do the harder right rather than the 
easier wrong. These MyVA reforms will take time, but over the 
long term, they will enable us to better provide veterans the 
services and benefits they have earned and that our Nation 
promised them.
    Our 2016 budget will allow us to continue this critical 
transformation to meet the intent of MyVA. The 2016 budget for 
VA requests $168.8 billion, $73.5 billion in discretionary 
funds and $95.3 billion in mandatory funds for benefit 
programs.
    The discretionary request is an increase of $5.2 billion or 
7.5 percent above the 2015 enacted level and it provides the 
resources necessary to continue to serving the growing number 
of veterans who have selflessly served our Nation. The budget 
will increase access to medical care and benefits for veterans. 
It will address infrastructure challenges including major and 
minor construction, modernization and renovation. It will end 
the backlog of claims and veterans' homelessness by the end of 
calendar year 2015. It will fund medical and prosthetics 
research and it will address the IT infrastructure and 
modernization.
    We know this is a large request, but it is not sufficient 
to meet all the requirements for either 2016 or 2017. 
Therefore, the President will transmit a legislative proposal 
to allow flexibility as necessary to reallocate, if needed, a 
portion of the Veterans Choice Act funds to improve VA 
operations within a fiscally responsible, budget-neutral 
approach to best care for veterans.
    [Chart]
    Secretary McDonald. As this chart demonstrates, this 
proposal is largely driven by our uncertainty of what resources 
we need to fund the new Veterans Choice Program. It is 
difficult to predict veterans' use of the program or its 
interaction with the medical care base budget because it is all 
new.
    We have no long-term data to draw upon yet. Our current 
estimates of demand range from a low of about $4 billion to a 
high of about $13 billion over the three-year program. We want 
and need the flexibility to move resources if veterans decide 
to stay inside VA rather than move outside VA.
    This is about ensuring every veteran receives the care they 
have earned and deserve regardless of where they choose to get 
it from.
    Mr. Chairman, Members of the committee, we meet today at a 
historically important time for VA and the Nation. March will 
mark the 150th anniversary of President Lincoln's solemn 
promise to those who had fought the most devastating war in our 
country's history. He promised that we would care for those who 
shall have borne the battle and for their families and their 
survivors.
    That is VA's primary mission. It is our only mission. It is 
the noblest mission supporting the greatest clients of any 
agency in the country, and we count on your support to uphold 
that sacred commitment.
    Thank you again for your unwavering support for veterans, 
for working with us on these budget requests, and for making 
things better for all of our great Nation's veterans. We look 
forward to your questions.

    [The prepared statement of Robert A. McDonald appears in 
the Appendix]

    The Chairman. Thank you very much, Mr. Secretary, for 
your----
    Secretary McDonald. Thank you, sir.
    The Chairman [continuing]. Testimony. And as we approach 
President Lincoln's birthday tomorrow, we are ever mindful of 
his commitment to the veterans of this Nation and our 
responsibility as a Congress and as an administration.
    Can you tell me a little bit about how the $15 billion that 
was appropriated last year in addition to the budget, how that 
is accounted for in this budget?
    Secretary McDonald. Well, sir, as you know, that money gets 
obligated only when veterans use the program. So, so far in 
terms of Veterans Choice Program, we have had nearly a half a 
million calls from veterans about the program, veterans and 
providers. So far, we have had roughly 24,000 veterans make 
appointments on the program and go outside. So we obligate that 
money as it is.
    Also, we are in the process of leasing 27 new facilities 
and that work is already underway. And we are using the money 
to hire more doctors, more medical professionals. We have a net 
new increase of over 8,000 medical professionals. That is in 
the last nine months. November was our biggest month of hiring. 
We hired over 2,000 more medical professionals than we lost.
    Our turnover rate is about eight percent, 8.9 percent. The 
turnover rate in the industry is about 18 percent, so we are 
trying everything we can do to retain the medical professionals 
and hire those that we need.
    Let me ask Helen. Is there anything I missed, Helen?
    Ms. Tierney. Thank you.
    Yes, we did have a shift of just over $500 million where we 
think the costs will shift to the Choice Program.
    The Chairman. Yeah. Could you explain that a little bit 
further? I know there was a telephone conference with staff, 
but talk about the shift.
    Ms. Tierney. So understanding the program is still very 
new, we thought that some of the costs that we normally see in 
the Fee Program would be picked up by the Choice Program. Right 
now, though, our actual results are we are seeing much more 
demand for the Fee Program on the VA side of the budget.
    The Chairman. Yeah. I would say that is a critical 
component to knowing whether this request is adequate or not. 
That is why the hesitance to do anything, Mr. Secretary, with 
the Choice piece.
    Again, we arrived at the 40-mile criteria because we wanted 
to have zero. Any veteran out there had a choice. That number 
came back from CBO at about 50 billion. We couldn't do that, so 
that is where the 40 got.
    But there has to be some savings, I would suspect, that are 
derived by alleviating some of the pressure within the system 
by those that are going outside because of the Choice Program.
    Ms. Tierney. And we are going to be looking at that very 
carefully. What we also don't understand is what level of 
suppressed demand that we had from veterans who did want to use 
the services who weren't using the services because of long 
wait times, distance. So there is still a lot to understand 
about Choice.
    Secretary McDonald. Mr. Chairman, I don't know that now is 
the time to make a move of any funds. What I am trying to do is 
sensitize the committee to the fact that there is a lot of 
uncertainty. And in our budget, we have roughly 70 line items 
where we have inflexibility. We can't move money from one line 
item to another.
    And what I am asking is that we work together to have 
flexibility so no matter where a veteran goes, we can move the 
appropriate money there and make sure that veteran receives 
care.
    The Chairman. I will commit to helping you have 
flexibility, Mr. Secretary, in just about everywhere within 
your agency except within that Choice piece because of the 
uncertainty that is there. That is what is interesting about 
this budget request.
    You talk about, Ms. Tierney, about all the uncertainty that 
is out there, yet we are asking for increases in FTEs. We are 
asking for increases in dollar amounts.
    Let me get back real quick. I have got one other question 
and then I need to give it to Ms. Brown.
    One of the things that I think a lot of us have asked, I 
know the physicians on this committee have asked over and over 
again, have never really gotten an answer, it is twofold, 
number one, how much does it cost for a veteran to be seen 
within the VA versus the private sector? The private sector, 
Mr. Secretary, you know could answer that right away. We have a 
hard time answering that within the department. And then the 
other issue is, do we know whether the clinical workforce is 
operating at its maximum capacity and efficiency based on the 
workload that is out there? There has just been a lot of 
anecdotal evidence that has been presented to this committee 
that would say that it is not, that physicians are seeing as 
few as two patients a day which is just absolutely unheard of.
    Dr. Clancy.
    Secretary McDonald. Let me ask Dr. Clancy to comment on 
that. But before she does, let me say that, as you know, my 
first trip was to Phoenix. And when I arrived in Phoenix, I 
discovered we were short 1,000 people and each primary care 
doctor had one clinical room. And in the private sector today, 
a primary care doctor has three clinical rooms.
    So we have an issue of both staffing, which the committee 
helped with the Choice Act, but we also have an issue on 
infrastructure. It is an old infrastructure. We have got women 
veterans and we don't have the clinical rooms that are 
currently the situation today.
    In Boston, I would visit operating rooms where operating 
rooms are 35 percent smaller than they need to be. If you have 
an operating room which is 90 years old, they didn't use robots 
or computers in operating rooms 90 years ago. We need that 
equipment today to be able to provide our veterans the best 
operating surgery that we can possibly do.
    Dr. Clancy.
    Dr. Clancy. Yes. So just on the productivity issue which I 
think is incredibly important, we have a tool, and we have 
discussed this and briefed Representative Wenstrup, called 
SPARC where facilities can look at the productivity of 
different types of clinics understanding that it is both about 
what the clinician is doing about the space issues that 
Secretary McDonald just mentioned and also about the efficiency 
and capabilities of the people around them who are supporting 
those needs.
    That tool has been deployed system wide. We are right now 
examining some of the data quality issues and very importantly 
are having that externally reviewed. So we would be happy to 
come back and brief you in more depth.
    We think it is a good tool. At this point, it is more 
diagnostic than it is kind of in a place where we could give 
people grades, for example, but we also want to make sure that 
some of the best and brightest minds have taken a look at it, 
have kicked the tires and so forth so that we are confident as 
we measure productivity.
    And I just want to reinforce what the secretary just said a 
minute ago. Some of our clinics, some of the better clinics, it 
would bring tears to your eyes in terms of how well they are 
doing, but they are really, really landlocked. One room almost 
feels like a gift much less the two or three that you would see 
in the private sector.
    The Chairman. Ms. Brown.
    Ms. Brown. Thank you, Mr. Chairman.
    Before I begin my questions, Mr. Secretary, I understand 
that you were down in Orlando last Wednesday meeting with the 
Nurses Association. Can you give us an update of how that went?
    And also you made an announcement about the opening of a 
hospital in Orlando. Can you give us an update on that also?
    Secretary McDonald. Yes, ma'am.
    I was in Orlando. I spoke to the American Nurses 
Association and I was there to tell them about how exciting it 
would be to work in VA today. And just like you and the 
chairman went with me to the medical schools in Florida to 
recruit, we were recruiting. We picked up quite a few people 
who were interested in coming to work for VA.
    The VA is the largest employer of nurses in the country and 
it is important. Our nurses are very important to us and they 
do a great job. So that is why I was there.
    Separately I did visit the Orlando hospital, Orlando 
Medical Center. There are now patients being seen. We are in 
the process of moving in. We expect to have a commemoration 
ceremony of sorts by Memorial Day.
    But between now and then, there will be new clinics being 
set up every single week there. It is a fantastic facility and 
I think the citizens of Orlando and the area of Florida will 
really enjoy going there.
    Ms. Brown. Thank you.
    Dr. Clancy, it is a lot of discussion on this committee 
about, you know, we have doctors on this committee and they 
talk about the duties and responsibilities. It is a little 
different working with the VA because what we expect of the VA 
physicians is a little more comprehensive.
    When a person goes in, let's say I am going into the 
podiatrist, but they can't just go in and deal with a 
podiatrist. It is comprehensive. I mean, it is the blood 
pressure. It is a whole different casework.
    Can you explain that to us?
    Dr. Clancy. So we believe that primary care and care for 
the whole veteran, if you will, is really the foundation of the 
system. So for the most part, we don't have people just coming 
in for podiatry or for a hearing aid, for example, a very 
popular use of our facilities, without also checking some of 
their other risks to their health and so forth.
    We are taking a very, very hard look because our two 
overarching goals for this year are getting access right, 
whether it is within our facilities, whether it is virtually by 
telehealth or something like that, fee care, or with the Choice 
Program, that all of that is seamless, and our equally high 
second goal is exceptional veteran experience.
    We recognize that some veterans actually might choose to 
simply come in for podiatry and skip the rest. So we are going 
to be looking at different options for doing that by way of 
maximizing efficiency and, frankly, making the veteran 
experience very satisfactory.
    But in general, we have an incredible opportunity because 
of the entirety of the department to actually have an impact on 
health that no other healthcare system has because a lot of 
things affect health besides medical care. That is income. It 
is education. It is whether you have a place to live and so 
forth.
    And the department has tools through VBA and so forth to 
actually address all of those needs. So we take that very, very 
seriously.
    Ms. Brown. The last question I have, what are we doing 
working with the Department of Defense as veterans transition 
to make it seamless and, you know, the bumps in the road?
    I just met a veteran who has been out two years and only 
ten percent disability. But the point is he can't get his 
paperwork from DoD. What are we doing? And we have asked this 
question for years.
    Secretary McDonald. It is a great question. I have to say 
that Secretary Hagel and I are totally aligned that we want to 
have a seamless handoff from the Department of Defense to VA. 
That is why we have instituted programs like TAP while the 
person is on active duty.
    Maybe I will ask Allison to talk about that.
    Ms. Hickey. So, Congresswoman Brown, some good news to 
report on this front, though it didn't obviously help that 
particular veteran two years ago.
    We are actively engaged now in the mandatory TAP Program 
for all of our separating servicemembers including national 
guard and reserve for which there are now nearly a million who 
qualify for benefits that did not previously.
    Another thing that is starting literally right now is the 
mandatory separation health assessment. The choice to the 
veteran told at the TAP session is that if you are going to 
make a claim to VA for anything, then VA will do a complete 
separation health assessment on you top to bottom before you 
leave service so that we capture absolutely everything service 
connected right there on the spot.
    The next thing I will tell you is we have moved 
substantially forward with DoD on the new Haines System where 
they give us the complete service treatment record, all the 
parts and pieces we have talked about before that we used to 
call the gold standard.
    For a while there, the numbers of late ones were really 
high, but they have come down to now about 21 percent of them 
are overdue. So they are getting better and we are getting them 
faster. And we have built all the IT connections now such that 
we simply note in VBMS that we have got a claim. The system 
tells the DoD system we are asking for the records and then the 
records come back automatically into VBMS and are instantly 
loaded up into our VBMS system for the raters to do it. That 
has helped substantially.
    The last thing I will share with you that we have also done 
is we have reduced substantially those folks waiting in the 
IDES process and now are getting much better in our timeliness 
in the IDES process.
    And I can tell you also that the Benefits at Discharge 
Program, the backlog has been reduced by a significant amount. 
There is only about five or ten percent of those who are now 
over 125 days.
    Ms. Brown. Thank you very much.
    And I yield back the balance of my time.
    The Chairman. Mr. Secretary, I just want to read a text 
that I just got from a friend of mine. Said had a reason to 
deal with the VA in Jacksonville this morning on a home we just 
finished for a veteran. A guy named X handled my request and 
was very efficient and friendly. I left the conversation warm 
and complete. Very good experience. Never had that before. 
Thank you.
    Secretary McDonald. Mr. Chairman, may I get the name so I 
can send a note of recognition?
    The Chairman. Yes, you may.
    Secretary McDonald. No, I am serious. I do that.
    The Chairman. Unsolicited. It just came in while I am 
sitting here.
    Secretary McDonald. As you know, I have given out my cell 
phone number publicly and nationally and I get about 120 
contacts a day. And right now I would say 30, 35 percent are 
positive. That is not enough. All of us sitting here at this 
table want 100 percent of those to be positive and we are 
working on it.
    The Chairman. You bet ya. I will be glad to provide you his 
name.
    Ms. Brown. Mr. Chairman.
    The Chairman. Yes, ma'am.
    Ms. Brown. You did say Jacksonville.
    The Chairman. Yeah, I did.
    Ms. Brown. All right.
    The Chairman. Maybe that is why they never had a good 
experience before.
    Mr. Lamborn.
    Mr. Lamborn. Thank you, Mr. Chairman.
    And thank you for being here, Secretary McDonald.
    I am pleased to see that you have focused a portion of your 
budget on construction efforts. Can you tell me the status of 
the southern Colorado National Cemetery Project and when you 
anticipate that they will begin accepting earlier burials? I am 
very concerned that this project stays on track.
    Secretary McDonald. We are as well. We are in the design 
phase right now and we think that design phase will take about 
a year, year and a half.
    Ron, would you like to provide more detail?
    Mr. Walters. Yes.
    Congressman Lamborn, as you know, we have made progress, 
significant progress on establishing the cemetery in southern 
Colorado. We acquired the 374 acres at Rolling Hills Ranch in 
El Paso County. We do have sufficient funds in the budget right 
now to complete the design, complete it through construction 
documents, the final phase of design.
    Once that is completed, we will begin the solicitation 
phase for construction of phase one. Assuming construction 
funds are provided in the next budget cycle and that is, you 
know, yet to be determined, we would expect the first burials 
to occur sometime in calendar year 2018.
    Mr. Lamborn. Well, I am disappointed that the time line 
seems to be slipping. I will do everything I can to make sure 
that those funds are in the budget and I will work with other 
folks to try to achieve that, but it sounds like there has been 
some slipping to the right and that is disappointing.
    Secretary McDonald. We are going through a complete review 
right now of our construction management process. As you know, 
Sloan Gibson, the Deputy Secretary, is leading that. And we 
have asked the Corps of Engineers help. We have got to find a 
way to shorten these time lines that we face. And so we will be 
looking at that and obviously any work we can do to accelerate 
it, we would like to do.
    Mr. Lamborn. And I will work with you if any amendments are 
necessary or any other legislative action to help you have the 
authority to make faster progress in the future on this or 
other projects.
    Changing subjects, Secretary McDonald, you mentioned that 
there are five proposed regions as opposed to 21 VISNs. I guess 
that is more efficient. Does that mean that you will have fewer 
personnel doing the same job as before which to me is a 
hallmark, a result of more efficiency?
    Secretary McDonald. Well, as I said in my remarks, this 
organization is focused on productivity improvement. We don't 
feel like we can come to you and ask for more money unless we 
are demonstrating that we are saving money at the same time. 
That is why we have identified the buildings that are empty 
that cost us money every year.
    Think of nine different geographic maps, each one for a 
different line of business, whether it is insurance or 
disability----
    Mr. Lamborn. And I have one other question, so if you could 
just summarize.
    Secretary McDonald. Okay. It goes to five regions and we 
haven't yet determined how many VISNs we will have, but they 
have to fit those five regions.
    Mr. Lamborn. Okay.
    Secretary McDonald. And we have a team of directors looking 
at that now. Everybody is trying to fit into that structure. 
The point is there will be more efficiency at the middle 
management level.
    Mr. Lamborn. Good. And I hope that means fewer people doing 
the same job which means less budget dollars going to 
personnel.
    Secretary McDonald. We are trying to put every budget 
dollar we can against the veteran experience----
    Mr. Lamborn. Okay. Thank you.
    Secretary McDonald [continuing]. Making the veteran 
experience better.
    Mr. Lamborn. Thank you.
    And lastly, I know we have touched on this, but the 
transition between DoD and VA, and I have 100,000 veterans in 
my district and almost that many dependents and other family 
members. And the Military Compensation and Retirement 
Modernization Committee has just come out with recommendations. 
They have said there needs to be better transition.
    You have mentioned some things that you are working on. 
That is good to hear, but what can be done in the future, what 
could be improved to make that transition better?
    Secretary McDonald. We met with that committee throughout 
their work. I think they have done some excellent work. Some of 
the ideas that Allison mentioned are brand new and before that 
committee wrote its report. In fact, when they gave us the 
report, we mentioned some of these things and they missed the 
report. The report was already in printing.
    But this idea of the medical exam before the servicemember 
leaves the service, that is the biggest idea. And I think the 
problems that we have had in the past we will be able to 
resolve with that and also with the way we strengthen the TAP 
Program. So I think we are getting better, but we are going to 
continue to look and see if there are other things we can do.
    Mr. Lamborn. Okay. Thank you so much.
    The Chairman. Ms. Titus.
    Ms. Titus. Thank you, Mr. Chairman.
    Thank you, Mr. Secretary. It is nice to see you again.
    Secretary McDonald. Good to see you, ma'am.
    Ms. Titus. We appreciate you being here. Before I ask kind 
of my general question, I am going to bring up what I always 
bring up and that is the Reno office. You know, we have been 
without a permanent director for about two years. We are on our 
second interim.
    I understand they haven't started to recruit yet. But if 
you moved it to Las Vegas, it would be a lot easier to recruit 
a person to come and take that position. So that is my first 
point.
    Second, you know, the hospital built in Las Vegas was too 
small by the time it was completed because they didn't 
anticipate the increased usage. We heard Deputy Secretary Sloan 
say they were going to move some resources to help with the 
hospital that is out from Denver, I believe it is, Aurora. I 
want to be sure that you aren't moving any resources from the 
Las Vegas hospital to fix the problem in Aurora. So if we could 
just follow-up with that.
    Now, my general question is, for the last couple of years, 
we have focused on the backlog, fixing that problem and also 
problems with our hospitals. So I would like to see us as we 
move into the next two years look at other areas, of benefits 
and make the VA more relevant to our 21st century veterans.
    And I appreciated the things that you mentioned in your 
testimony. One is women, second is LGBT veterans, and third is 
the issue of medical marijuana. These are all big issues during 
these times. You talked about how many more women veterans you 
expect to have, but really what we don't know is what we don't 
know.
    And the Women Veterans Task Force recommended two positions 
that are data gathering positions so we can get a better handle 
on this, a performance analyst and a demographics and research 
analyst. So I would like to know if the VA is making those two 
positions a priority and if we have your commitment that those 
would be positions that would be funded and utilized.
    Second, I would ask you, Mr. Secretary, if you would commit 
to whether you think the law needs to be changed that prevents 
the VA from giving LGBT veterans the same benefits that other 
veterans get. They earned them. They deserve them. They just 
happen to live in the wrong state. I don't think that is fair.
    And, third, with the medical marijuana, as more and more 
states are legalizing medical marijuana, VA doctors aren't able 
to make any kind of recommendations concerning that. I wonder 
how VA policy might be moving to address that issue.
    Secretary McDonald. Thank you for the questions.
    First on women, I took down a painting in my office that 
had probably been on the wall since Omar Bradley was the 
administrator of VA and I put up a poster that says women in 
the military. And it has a picture of a woman in service in 
each branch of the military. And I did that on purpose because 
this is going to be a defining issue for those of us leading 
the VA right now.
    You already heard that our buildings are old. We need space 
to be able to create the women's clinics. We just opened a 
women's clinic here in Washington, DC, at our facility. I would 
encourage you to go see it. It is a beautiful clinic, but it is 
different than where the men would want to go.
    Ms. Titus. Yes.
    Secretary McDonald. And, of course, the care is different 
because we have gynecologists and other kinds of care. So this 
is a very important issue for us and we are working very hard 
to identify where can we put women's clinics with women care.
    We just got a building from DoD in Fort McPherson, Georgia, 
where we have set up a women's clinic. This is a very big issue 
for us and we are going to stay after it.
    Relative to LGBT, we are following the law. You know, if 
the couple is married in a given state, we will give them 
benefits. We need a new interpretation in the law or a change 
in the law. We are following the law.
    There is an exception to that. In national cemeteries, if 
we are able because of the legal authority I have to be able to 
bury partners together when they so choose, and in every case 
that we have done that, we have looked at the relationship and 
we have granted that, so----
    Ms. Titus. If I may interrupt you. I appreciate that. But 
in state cemeteries, it still remains a problem as I understand 
it.
    Secretary McDonald. Yes, ma'am. I don't control those.
    Ms. Titus. Yeah. But they get funding from the VA, the 
state----
    Secretary McDonald. Some. Some.
    Ms. Titus [continuing]. Veteran cemeteries.
    Secretary McDonald. Some.
    On the medical marijuana, let me ask Dr. Clancy to comment.
    Dr. Clancy. Sure. So a fair number of our clinicians have 
veterans who use marijuana, I will put it medically in quotes. 
They live in areas where this is legally possible and so forth. 
It is very, very early for us to have medical policies, but 
there are active discussions going on now and trying to learn 
from what we know about treating it for different conditions 
which, by the way, are not necessarily identical with those 
conditions for which veterans believe that they are helpful.
    I actually think that there is an incredible opportunity 
for us to learn from some of those experiences, but I think 
that we have to be careful given the variation in legal issues. 
But we would be happy to provide more detail for the record.
    Ms. Titus. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    I yield to Ms. Brown for 30 seconds.
    Ms. Brown. Yeah. On the area of medical marijuana, we have 
constantly passed the bill saying that the VA doctors cannot 
administer even if the state in the area says it is legal and 
they could be charged with a felony. So it passed last year on 
the floor. I didn't vote for it. And it is an issue for 
Congress. I mean, so if you feel strongly about it, then I 
think maybe you should introduce a bill. But as we speak, it is 
illegal for a VA doctor to administer marijuana.
    Dr. Clancy. Yeah, that is correct, Representative Brown, 
and I was not clear enough on that point. That said, again, 
trying to be responsive to veterans' experiences and what they 
are telling us. We are trying to learn from that and understand 
and anticipate what a different future might look like.
    Ms. Brown. Oh, absolutely. There are all kinds of 
additional kind of therapy, but as we speak now, it is illegal 
for a physician to administer it. Am I correct?
    Dr. Clancy. [Nonverbal response.]
    Ms. Brown. And last year, we passed a bill on the floor 
saying it was illegal for a VA physician.
    I yield back.
    The Chairman. Thank you.
    Mr. Bilirakis.
    Mr. Bilirakis. Thank you, Mr. Chairman, very much. Thank 
you.
    First of all, I wanted to thank you, of course, Mr. 
Secretary, first of all, for taking the position and being so 
accessible to us, but more importantly to our veterans. And, 
again, you have made a great deal of progress and we want to 
help you make more progress, so thank you for your cooperation 
and we are here for you.
    First of all, I have some questions with regard to lease 
authorizations. First of all, I want to thank you for working 
with me to ensure veterans and community stakeholders in my 
area are being engaged regarding the Pasco County lease 
consolidation located in central Florida.
    To ensure the success of its utilization, it is important 
that their opinions on potential locations and what specialty 
services should be offered are considered. I know you agree.
    I am pleased to hear that there will be a potential site 
visit. Can you give me an idea of when that might be?
    Secretary McDonald. Our staffs are meeting. They met this 
morning actually. So I don't know the outcome of that meeting, 
but I think it should be imminent, tomorrow or the next day.
    Mr. Bilirakis. Thank you.
    Again, is there something we can work with you on to 
expedite the activation of these leases in general, the leases 
in general? I am talking about the 27 leases that were 
authorized last year.
    Secretary McDonald. Right. As I said, Sloan Gibson, our 
Deputy Secretary, is going through a process right now to 
understand how can we speed up our ability to design, lease, 
construct. And as we go through that, if it looks like there is 
an opportunity for legislation, we will come back to you and 
ask you for your help. Right now we are not ready for that, but 
we are taking a close look at it.
    Mr. Bilirakis. All right. My next question has to do with 
the future lease authorizations. I understand that there is an 
issue between VA and GSA with future lease authorizations, not 
the 27 that were authorized last year.
    Can you discuss what options are being considered and if 
there is enough requested in the budget, should funds for the 
full extent of the lease be required? It is so very important 
that we plan ahead.
    Secretary McDonald. I will start and then maybe Helen can 
help.
    At one time, over a year ago now, we had a blanket lease 
authorization from GSA which would allow us to enter into 
leases quickly, easily with our authority. That has been 
revoked and it requires us to go to GSA for them to study our 
leases. In some cases, if the cost of the lease exceeds, I 
think it is $2.85 million, then they actually have to take it 
to a committee which takes even more time.
    They have been very helpful. We have been working with them 
to speed up the process, but we are also trying to see if there 
is a totally different way that we can do it. We are applying 
Lean Six Sigma technically to see if there is a way we can 
improve the process even more.
    Helen.
    Ms. Tierney. GSA has been working very cooperatively with 
us. We are working on getting those processes right and making 
sure that we all are working under the same standards for 
scoring. So I think that is progressing well right now.
    Mr. Bilirakis. Okay. Very good.
    Anyone else.
    [No response.]
    Mr. Bilirakis. Thank you very much.
    I do want to discuss with you in the future, Mr. Secretary, 
expanding dental healthcare for our veterans within the VA and 
some of the clinics.
    But I yield back at this time. Thank you, Mr. Chairman.
    Secretary McDonald. We would be happy to do that.
    Mr. Bilirakis. Thank you.
    The Chairman. Ms. Kuster, you are recognized.
    Ms. Kuster. Thank you very much, Mr. Chairman.
    I want to start by commending you, Secretary McDonald, for 
the efforts that your team has done to settle the lawsuit out 
in west Los Angeles.
    We had a hearing yesterday in the Oversight and 
Investigation Committee and we had a discussion about the steps 
that will be taken.
    A couple of things in follow-up and I will be working with 
our subcommittee chair, Mr. Coffman. But one is we want to stay 
in very close touch with your team about the plan for the west 
LA facility, particularly addressing homelessness of veterans 
in west LA, and then we have suggested to have a follow-up 
hearing next fall when you come back with your report so that 
we can stay closely engaged with that.
    Secretary McDonald. We would love to do that. I think what 
we demonstrated in west LA more than anything else is this is a 
team sport and we all need to play together on the same team. 
And it is just silly to think that we have a national issue 
with veterans being homeless. And in the city with perhaps the 
largest homeless population in the country, we had a lawsuit 
going for four years that prohibited us from making progress.
    Ms. Kuster. Yeah. And the representative from The American 
Legion said it had been 30 years that they have been working on 
this problem which obviously goes through a number of 
administrations, so----
    Secretary McDonald. We got the land in 1880 something.
    Ms. Kuster. 1888, yeah. I wanted to go to the opposite end 
of the country to my district in New Hampshire and talk briefly 
about the Veterans Choice Program. My colleagues in the Senate, 
Senator Ayotte and Senator Shaheen, have introduced a bill to 
make sure that the Veterans Choice Program, whatever happens 
elsewhere, will continue in the states that do not have a full 
service VA hospital.
    This is critical for us because we have got folks that, and 
I know they don't travel the distances that my colleague, Beta 
O'Rourke's constitutes travel, but with weather and such 
particularly of late, that is important.
    Can I ask about how the Veterans Choice Act is working in 
those states? And you mentioned briefly about hiring new 
physicians and medical personnel for filling the gap. I am 
particularly interested in mental health provider and if you 
could comment on that, it would be very helpful.
    Secretary McDonald. First of all, I want to make sure that 
we are clear that the leadership of VA believes that the system 
of the future will be a network of both VA and outside care. 
Already we, in the last year, we did about 550 million 
appointments in outside care. That was up 48 percent above a 
year ago. So that is even before the Choice Program.
    So we are believers in that because that is the way our 
veterans will get served the best. It was misinformation. There 
was never intent to either gut the Choice Program or somehow 
eliminate the Choice Program. It was simply I was asking for 
recognition that we have 70 line items of budget that we can't 
move money from.
    Imagine your household. You have a checking account for 
gasoline. You have a checking account for groceries. The price 
of gasoline goes down by half. You are hungry, but you can't 
move the money from the gasoline account to the food account. 
Well, that is the situation I face. I am trying to serve 
veterans and I don't have the flexibility to do that. I ran a 
relatively large business. You know, it is very hard to achieve 
customer satisfaction when you have all these strictures and 
restrictions on how you can take care of customers. So that was 
the only point I was making.
    The Choice Program is a good program. It is very early 
days. As I said, we have had nearly 500,000 calls and about 
24,000 appointments, but we are going to be watching it very 
closely every single day and we will let you know what we see.
    Ms. Kuster. Yeah. Again, that is something that I would 
assume the Oversight Committee would want to stay in close 
contact.
    Secretary McDonald. We invited over, and I will make this 
invitation to everyone, we invited over Congresswoman Brown, 
Chairman Miller. They came over. They went through our daily--
we have something we call a daily standup. It is a Lean Six 
Sigma technique. We review the data from that day and you make 
changes to the next day.
    Deputy Secretary Gibson leads it. And I would invite any 
Member to come over and watch us do that. I would argue that it 
might give you confidence in the data that we are giving to you 
and you can also see the trend lines.
    Ms. Kuster. Thank you very much. My time is expired.
    Secretary McDonald. You are welcome. Thank you.
    Ms. Kuster. I yield back.
    The Chairman. Mr. Coffman.
    Mr. Coffman. Thank you, Mr. Chairman.
    Mr. Secretary, in the budget submission for the Office of 
General Counsel, you list as recent accomplishments, and this 
is a quote, ``Defending against complex litigation such as the 
construction projects in Orlando and Denver,'' end quote. How 
is that a success? You lost that case on every single point.
    For the hospital in my district that is hundreds of 
millions of dollars over budget and years behind schedule and 
the only way the construction could continue was that the 
general contractor demanded that the VA construction management 
personnel be kicked off the project and that the Army Corps of 
Engineers come in and take over the project.
    And so, you know, I think that is just characteristic of 
your glossing over the extraordinary problems confronted by 
your department. This is a department mired in bureaucratic 
incompetence and corruption.
    And I have got to tell you I think the public relations is 
great today, but there is no substance. There is no substance. 
And I----
    Secretary McDonald. I am highly offended by your comments, 
Mr. Coffman.
    Mr. Coffman. Let me finish first because I fundamentally 
believe that as unfortunate as it is that at the end of the 
day, at the end of this President's term that you will not have 
made a difference in changing the culture of this organization 
by virtue of the fact that you continue to gloss over its 
problems.
    Secretary McDonald. I am offended by your comment. 
Actually, I have been here six months. You have been here 
longer than I have. If there is a problem in Denver, I think 
you own it more than I do.
    I found it ironic that when I went out to LA to solve a 
four-year-old lawsuit, you were busy calling for a hearing to 
discover what happened five years ago. I am working on the 
future, sir, and I am going to correct the past. But I am 
working on the future because that is what our veterans want.
    Mr. Coffman. For you to say that you are going to the Army 
Corps of Engineers to advise you as to how to correct the 
extraordinary problems, let me tell you I think what you need 
to do is focus on providing the healthcare benefits and the 
other benefits that veterans have earned and get out of that 
construction management business and to cede it to the Army 
Corps of Engineers.
    Secretary McDonald. We know that is your point of view 
and----
    Mr. Coffman. Each major construction project is hundreds of 
millions of dollars over budget and years behind schedule. That 
is a problem.
    Secretary McDonald. I think we work very closely with the 
Corps of Engineers. General Bostick is a good friend. He has 
also been very helpful. He has told us he does not want total 
responsibility for all of VA's construction.
    We are going to work with him. We are going to find out the 
right balance of that. We are doing it in Denver, as you know, 
and we appreciate your help to get that building finished and 
get it finished for a good value for taxpayers.
    Mr. Coffman. I hope you can make a difference. I hope you 
can.
    Secretary McDonald. I would just say maybe if you want, I 
will give you my cell phone tonight and you can answer some of 
the calls and see if I am making a difference for veterans and 
see what they say or go on the Web sites, see what the veterans 
are saying on the Web sites. Ask the VSOs in the next group.
    Mr. Coffman. The fundamental challenge----
    Secretary McDonald. I run a large company, sir.
    Mr. Coffman. The fundamental challenge is for this 
organization to reflect your values and I am not sure that that 
is going to happen. And I hope that it does.
    Secretary McDonald. I want your help to do that.
    Mr. Coffman. Mr. Chairman, I yield back.
    Secretary McDonald. I need your help.
    The Chairman. Thank you, Mr. Secretary.
    Mr. O'Rourke.
    Mr. O'Rourke. Thank you, Mr. Chairman.
    Mr. Secretary, let me begin by thanking you for your 
service. I have only been in Congress a little over two years. 
But in that short time, I really feel that you personally have 
set a new bar for leadership and accountability and 
responsibility for the problems that you encountered that you 
are turning around and, in fact, facing the future so that we 
build a better VA and do better for the veterans whom we serve.
    Case in point, two days after the tragic murder of Dr. 
Fjordbak in El Paso, Texas, you were there on the ground 
meeting with VA leadership, the incredible staff that works 
under Mr. Dancy. You, in fact, ensured that we had Mr. Dancy 
there to begin with. You replaced leadership and ensured that 
we had someone there who could be transformational and that is 
what we need in El Paso right now. So I want to thank you for 
that.
    I also want to thank you for your willingness to work with 
us to do better in El Paso. I mean, again, no need to focus on 
the past. We are not a top-tier performer. We want to be and I 
want to figure out how we are going to do that.
    To some of the points that Mr. Coffman just raised and a, 
you know, six or eight hundred million dollar facility now 
projected to be $1.1 billion or 1.4 at the high end, we can't 
do that anymore.
    In El Paso, we have partners like Texas Tech and the four-
year medical school there, University Medical Center, the 
public hospital, private providers, Tenet and ACA, all of whom 
are desperate to work with us.
    I would like your commitment that we are going to in the 
short time that we know that you have within this 
administration, 22 months, put together a plan and get it to a 
point where it is unstoppable so that should we be lucky enough 
to have you as secretary in the next administration or your 
successor will be able to work with us to implement that.
    Can I have that commitment from you publicly to work with 
me on that?
    Secretary McDonald. As you and I talked when we were there 
and we went to the Texas Tech site, what we want to do in El 
Paso is exactly what we did in Los Angeles which was we got 
everybody together. We looked at all the options and we are 
going to make the decision together. We are going to work 
together to get this done.
    This is a team sport. We can't do it by ourselves and we 
know that. And so I look forward to working with Texas Tech. I 
look forward to talking to Department of the Army because, as 
you know, currently our facility is connected to Beaumont, but 
Beaumont is closing. But, yes, we will work together to develop 
a plan for El Paso.
    Mr. O'Rourke. Thank you.
    And I also want to thank you for the presentation you made 
at the outset of this meeting. I think you placed our current 
problems in context. And they, not all of them, some of them 
originate in the VA, but the wars that we choose to engage in, 
and you mentioned that, you know, hopefully we are at the 
conclusion of our commitment in Afghanistan and Iraq and we are 
going to peak in terms of commitments to those veterans in 
2055.
    I would argue the point that we are still at war in 
Afghanistan. We have 10,000 servicemembers there whose lives 
are on the line. The NATO commander says expect more U.S. 
casualties. We are about to consider an authorization for the 
use of military force in Iraq and Syria. We are and have been 
in a state of perpetual war and there is a cost to that beyond 
sending the servicemember over, funding the assets that follow 
him or her. It is the cost to care for them and their family 
and their children when they return.
    And I just hope that we are all keeping that in mind as we 
go forward. There is a much larger cost than the immediate one 
that we consider.
    The Veterans Choice Act passed this August included a 
component to assess VA healthcare processes and it was supposed 
to be an independent assessment.
    What do you have in this 2016 budget that would fund 
implementing the findings from those assessments, if any? And I 
don't know when that assessment is supposed to conclude.
    Dr. Clancy. Thank you, Representative O'Rourke.
    As you said, the Choice Act actually has required a number 
of assessments which, frankly, we think are an incredible gift.
    I last weekend spoke to a Blue Ribbon panel that they have 
assembled who will take a look across all of the assessments. 
They will be finished their work by this August and are working 
very, very hard, weekends, evenings, whatever they need to make 
sure that that happens. And they are looking at all aspects of 
our operations.
    Mr. O'Rourke. You have dollars in this budget to implement 
the recommendations that are made?
    Dr. Clancy. I don't think that we have explicit dollars. I 
think what we have is we expect that this will be a core part 
of management and how we do business. And we are providing them 
with all of the data that they need to actually make the 
recommendations as actionable and relevant to VA as possible. 
So we are very much looking forward to those.
    Mr. O'Rourke. Okay. My time is expired, but I would love to 
follow-up with you on that----
    Dr. Clancy. Great.
    Mr. O'Rourke [continuing]. To find out what that might 
cost. Thank you.
    Thank you, Mr. Chair.
    The Chairman. Dr. Wenstrup.
    Dr. Wenstrup. Thank you, Mr. Chairman.
    And thank you all for being here today.
    If I may, I am going to go back to something I touched on 
briefly the last time that we met and that is what we actually 
spend for the care that is delivered.
    And I had asked about knowing the number of how many RVUs 
per year does the VA generate with their caregivers, the 
relative value units. And that is a common term used both in 
private sector and in the VA, and then what the total cost is. 
And then by total cost, I don't mean just what the doctor is 
getting paid, but you are including everything, administration, 
physical plant.
    And Mr. Gibson said, oh, we are a long way from coming up 
with that number. And my question is, how do you come up with a 
budget if you can't say what that number is today? So how much 
did we spend on everything to do with healthcare per RVU that 
was generated?
    And so I am curious why we can't come up with that number 
for one because I wonder sometimes when we look at Choice, are 
we really determining is it more cost effective and a patient 
benefit in some regions to refer out rather than build out, you 
know?
    And because the cost per RVU to the outside doc is pretty 
easily defined. You know what you paid that doctor, but that 
doctor is then paying for their physical plant and their staff 
and their malpractice and all those other expenditures. So that 
is pretty well defined, but we are not being realistic if we 
don't look at the overall picture of what we are spending per 
RVU.
    So if you could comment to those issues.
    Secretary McDonald. As Sloan said, that is a system we have 
to develop. We are in the process of doing that. It is not 
perfected yet. The numbers aren't as valuable yet.
    The department has had a history of working to a budget. It 
has not worked to a demand or to a customer focus. As a result 
of that, Congress would provide a budget and that is what the 
department would work toward. That budget would be allocated 
throughout the department.
    So we are actually, contrary to what Congressman Coffman 
thinks, we are actually making some relatively large changes 
here to focus the organization on the customer and to be able 
to get that data.
    Dr. Clancy can talk about the process of doing that, but 
this is a big undertaking.
    Dr. Wenstrup. So if we know what the budget is for all the 
health administration costs and what that is, can't that give 
us something to start with? In other words, I feel like we need 
a baseline. We can start to look at that more closely at 
different facilities as we project out.
    I am looking down the road, you know. I am here for the 
same reason I think you are, is to make a difference and to 
make good decisions, but we have got to come up with those 
numbers because you can't decide if Choice is working better or 
worse and effectively, especially when it comes to the dollars.
    Secretary McDonald. Yeah.
    Dr. Clancy. Thank you.
    That is part of the independent assessments that we will be 
getting as well. One of the wild cards here that I am sure you 
are quite familiar with in terms of comparing how efficient and 
productive we are, cost per RVU versus the private sector is 
that there is a big difference in terms of fixed costs versus 
variable costs.
    If you have got a building where you have to keep a 
cafeteria running and all that kind of stuff, that is the point 
that was in the overall opening statement from Secretary 
McDonald. In the private sector, they have got a lot more 
flexibility.
    But we will be looking at that very, very hard because as 
we look to a future where, as Secretary McDonald said a few 
minutes ago, it is going to be both about what we provide in VA 
as well as what we send out to community partners through non-
VA or fee care and Choice and so forth or something like it 
possibly with a different name.
    We have got to be very, very smart and as strategic as 
possible about make or buy decisions and----
    Dr. Wenstrup. Well, I look forward to seeing those types of 
numbers because that has got to be our guide----
    Dr. Clancy. Yes.
    Dr. Wenstrup [continuing]. As we try to decide what is best 
for the veteran and the VA itself as we go down the road.
    Dr. Clancy. Absolutely. And those answers are probably 
going to be different in some communities than in others 
depending on local capacity and so forth.
    Dr. Wenstrup. Sure. No, I think you do have to evaluate 
locally, but you can start with what it is in the big picture--
--
    Dr. Clancy. Yes.
    Dr. Wenstrup [continuing]. And then take a look locally, 
because every place is going to have a little different demand 
based on VA population, et cetera. So I look forward to working 
with you on that and, thank you, I yield back.
    Dr. Clancy. Great.
    The Chairman. Mr. McNerney.
    Mr. McNerney. Well, thank you, Mr. Chairman.
    Hey, I am really glad to be back on the committee. I was 
here for three terms starting with the 110th Congress. It is a 
pleasure to be back.
    I want to thank you, Mr. Secretary and the Under 
Secretaries for your dedication. This is an enormous challenge, 
as you pointed out in your opening remarks. A lot more service 
is required, a lot more veterans seeks help and so on. So, I 
think we are making progress, but there is still a long ways to 
go.
    My first question will go to Ms. Hickey, who I have had 
that lot of dealings with in the past. I would like to just 
give a brief update on the backlog, specifically focusing on 
some of the California ROs who had such a problem a few years 
ago, and please kind of be brief, if you would.
    Ms. Hickey. Absolutely. So let me just start, for all of 
you, the backlog is down nationally sixty-two percent and we 
are on target to hit our 2015 goal.
    Our productivity is up 25 percent, per FTE. We are 
producing now, at the claim's perspective, 47 percent more than 
we did before we started this transformation effort; a 101 
percent from a claims--from a medical issues' perspective.
    Our quality, we have not traded for; in fact, it is up 
eight percentage points at the claim level at 91 percent, and 
at the medical issue level, it is now up at 96 percent.
    What I will tell you--a non-rating, by the way, we have not 
put off non-rating; we just have a lot of it, it is volume, it 
is need. When we do more regular, you know, first-time claims, 
it opens the door to more follow-on non-rating opportunity for 
our veterans. So, by exactly, when we did record breaking, 
never done in our history before, at 1.32 million claims last 
year, and as you saw on the chart, the disability level is now 
on average at 47.7 percent, you have a wider opportunity for 
many more veterans to get that additional benefit as well.
    Oakland, since we last saw you here in the room--glad to 
have you back, Congressman--phenomenally much better. Their 
backlog is down 67.3 percent. Their quality is up at 90 percent 
on issue basis and they are doing much better than they were. 
They also have done much better on the mail issues, which we 
are doing nationally, so I thank this whole Committee, both now 
for the funds that you have invested in centralized mail. We 
are really starting to see the benefit of that, moving mail 
timeliness down from 32 days down to eight days; that is a 
phenomenal saving to our veteran, in getting that mail 
associated with that client.
    Mr. McNerney. Okay. Well, you know President Reagan had a 
saying, ``Trust, but verify.'' I am really glad to hear these 
numbers, and you know that we are going to be looking into them 
to be sure.
    Ms. Hickey. Absolutely.
    Mr. McNerney. Thank you.
    The next question goes to Mr. Secretary. Following up on 
Mr. Bilirakis' questioning, I would like you to comment a 
little bit on meeting construction challenges. You said in 
almost a quote that the VA is not ready for legislative help on 
this issue. But I would like to see if you think private 
partnerships would be beneficial in moving forward with the 
construction backlog or where do you stand on that sort of 
issue?
    Secretary McDonald. First of all, as I said in my remarks, 
on my VA, strategic partnerships is one of the five planks. 
This is a really big deal. Historically, VA has not had as many 
strategic partnerships as had been possible, and one of the 
first things I found as secretary is I had a lot of people 
willing to offer help that we did not accept.
    So we set up an office of strategic partnerships. We have 
somebody leading it. They came from the private sector. We are 
hoping to making good progress there.
    Secondly, relative to construction, a lot of changes have 
been made over the years, probably since the last time you were 
on the committee. Number one, originally, a lot of the times, 
the design was done by architects. Engineers have now been 
added to the design committee and there is a whole design 
committee now that reviews it.
    Many of the structures that we are building now, frankly, 
as an engineer--I am an engineer--I would not have built, 
because they are architects' dreams, but they are very 
expensive and they will be very expensive to operate.
    Secondly, we have looked at that entire process. We are 
training, do a better job of training the project managers. We 
will implementing GAO recommendations, about how to make the 
process more efficient. So there are a number of steps being 
taken.
    As Congressman Coffman said, we are now also working with 
the Corps of Engineers and we have asked them to do a complete 
review for us from A to Z of our process and see if we can 
improve it, as well as what part of the process could they help 
us in.
    Mr. McNerney. Well, thank you.
    On a parochial issue, in the French Camp Project there is 
been some temporary structures put up, but some of the basic 
requirements such as disability-accessible bathrooms have not 
been met yet, even though the project has been up there for 
more than year.
    Can I get your commitment to take strong action to make 
sure that those basic requirements are met, sir?
    Secretary McDonald. We will get into that.
    Mr. McNerney. Thank you, Mr. Secretary.
    Secretary McDonald. Thank you.
    The Chairman. Dr. Abraham.
    Mr. Abraham. Mr. Secretary, first, if you for your effort 
and your attitude, and that of your staff, for trying to help 
our veterans, as great as they are.
    Two quick questions. One, on the--we have hit this before 
on some of the electronic health record issues, the VA budget 
states, and I will quote this, ``In addition to VistA 
improvements, the VHA 2016 investment supports our commitment 
to achieve interoperability with the Department of Defense 
electronic health record and community health care providers, 
including those who are participating in the new Veterans 
Choice Program.''
    My question is this: With a 136 percent increase in EHRs 
and VistA funding from fiscal year 2015 to 2016, and given your 
stated emphasis on making seamless transition possible, can we 
now expect to see third-party administrators and non-VA 
providers get access to these systems?
    Secretary McDonald. Let me talk on the high level and then 
I will ask Steph to talk about specifics.
    Mr. Abraham. Okay.
    Secretary McDonald. I believe that the electronic medical 
record that will win in the future will be a record which is 
open-source, free to everyone----
    Mr. Abraham. Right.
    Secretary McDonald [continuing]. As well as crowd-sourced 
in terms of the innovation. Crowd-sourced innovation occurs in 
a much more rapid pace than any company with protect their own 
innovation rate. So our record is open-source. It is crowd-
sourced in terms of innovations. We get innovations back--I was 
at the AMA convention talking about the importance of private 
sector providers using our record so we could do a really warm 
handoff of our veterans to the private sector and back under 
the Choice Program.
    Mr. Abraham. Is that working pretty good, the warm handoff?
    Secretary McDonald. It is early days. It is early days. But 
we have more work to do to make sure that the veteran's record 
is there when they get there and to make sure that we get the 
annotations back from the doctor in the private sector who 
works on them, and that is part of the work that we are doing.
    Mr. Abraham. You know, heretofore, some of the private 
providers were getting the veteran's health records, but it was 
the entire record and sometimes it was hundreds and maybe even 
thousands of pages----
    Secretary McDonald. Yes.
    Mr. Abraham [continuing]. Whereas that provider only needed 
maybe the last discharge summary, and it would have taken two 
to three hours to get through that stack.
    So we need something certainly more seamless, certainly 
more efficient----
    Secretary McDonald. Yes.
    Mr. Abraham [continuing]. For the outside Choice providers.
    Secretary McDonald. In a sense, the good news is that we 
need that interoperability too, with DoD, too.
    Mr. Abraham. Right.
    Secretary McDonald. So we need the interoperability back 
and we need it forward, and Steph can talk about the steps that 
we are taking.
    Mr. Warren. Thank you, Mr. Secretary.
    If I could submit for the record, actually, four charts 
that walk through what is the sharing that we are doing today?
    [Chart]
    The Chairman. Yes.
    Mr. Warren. And it includes sharing with third-party 
providers. So we have 31 partners, UC Davis Medical Systems in 
terms of where we are sharing data already. There also is a way 
of sending the email as--or sending the information to the 
third-party provider as an email.
    The other piece that we are doing, to recognize your point 
about, we would send the full medical record.
    Mr. Abraham. Right.
    Mr. Warren. We are taking the Janus Viewer which shows a VA 
record and the DoD record together and we are going through and 
modifying it so we can actually provide that to the third-party 
provider. So when we send the veteran out for that third-party 
care or through Choice, we are able to send a URL. The provider 
can click on the URL and the record comes up.
    Mr. Abraham. Do you have a timeline when this might--is 
this going to happen within six months? Twelve months?
    Mr. Warren. Again, these documents are what is happening 
now. It will give you the record in terms of using the existing 
systems. The one where we are sending the provider a link so 
they can look at, we are about a year away.
    Mr. Abraham. Okay.
    Mr. Warren. Because we need to make sure when we do it--we 
have a Choice issue with respect to veterans opting in to us 
sharing that information to somebody outside of the system, and 
that is one of the systems that we are working through 
programatically.
    So, the technology piece, the team is looking at it. We are 
using the viewer that we deployed last year to add in the 
capability out to third-party providers.
    Mr. Abraham. Okay. My second question real quickly, because 
my time is limited, going back to the efficiency of the 
providers, whether it be a physician, a PA or an NP, and I 
understand the limitation of space being one or two exam rooms, 
but even with that, is there a measurement for a provider on a 
daily basis that we can access or you can access and give it to 
us that shows how many patients they are seeing a day? Like 
Chairman Miller said, two patients a day, even with one exactly 
room is not anywhere close to being acceptable. As a physician, 
I know what one exam room can see during a day. And I 
understand the complications that VA patients have, as having 
multiple-organ system issues, so can you address that, please?
    Mr. Warren. The answer is and I will let Carolyn talk about 
it.
    Dr. Clancy. So, the great news, and as a few of you got to 
see last weekend, the secretary invited anyone else who wants 
to come, we literally go over these data every single morning, 
so it is much more visible how many patients per day providers 
are seeing. Understand that some of our providers are also 
teaching or doing research and so forth, but we have to be as 
transparent about all aspects of that as possible. So this 
entire exercise not only gives us close to realtime 
information--and we post this publicly every two weeks, in 
terms of----
    Mr. Abraham. Are we doing anything with the information?
    Dr. Clancy. Yes.
    Mr. Abraham. Are we incentivizing or maybe--and punishment 
is the wrong term--but if that physician or that provider is 
not pushing himself a little bit, are you guys pushing him or 
her a little bit more?
    Dr. Clancy. I think the word would be ``motivating.''
    Mr. Abraham. That would probably be a better word.
    Dr. Clancy. Yes. Yes.
    Secretary McDonald. Given the issues on access, that is not 
a problem. Everybody is looking at this data locally and 
regionally and nationally because of our issues on access.
    Mr. Abraham. Okay. Thank you.
    The Chairman. Mr. Walz.
    Mr. Walz. Thank you, Mr. Chairman and Ranking Member, and 
thank you for the opportunity to be back on this committee. It 
truly is one of the greatest honors that I have experienced in 
my life.
    Mr. Secretary, thank you for being here for numerous 
reasons. I say thank you as a veteran. I am glad to know you 
are there and that means a lot.
    I think this room, when I look around, I mean back here, is 
filled with some of the most honorable, patriotic and 
professional people I know, at this table, those behind you, 
the VSOs, members here. I have to say it is certainly somewhat 
objective, but over the last year we have had difficult 
conversations, all of us, and we have worked closely together. 
They were difficult because all of us understood the 
implications of our actions impacted veterans, and if it was 
Phoenix or wherever--but trying to find solutions.
    And I can say from my experience, and I think it is the one 
that you are hearing here, the professionalism and the 
willingness to fix this amongst this team has been greatly 
gratifying, and I say again, maybe subjectively, but it feels 
to me like for the first time in a while, the Department has 
its feet back under it. That this idea of moving towards 
solutions--and it is not that we will ever going to stop having 
accountability of where we are going to stop, whether it is 
problems as they bring up, but trying to find those solutions.
    So I, for one, accept that and I believe that your 
challenge is right; we all are in this together. We have 
responsibilities to get this. And when we bring up these 
things, these parochial issues, those are the things that our 
constituents are talking about. Those are the things.
    But I go back to what you said, Mr. Secretary, I do believe 
this is a unique opportunity for transformational change, and 
this window will close over a certain amount of time, just the 
nature of politics and everything else that goes with it, so I 
think we need to seize on it. The feeling I have gotten is that 
there is a desire.
    And I can tell you from the folks that work out there--and 
I just came from a meeting with a group of your fantastic VA 
nurses and they are committed. They want to get this right. 
Their morale is--I care about that, because if we freeze their 
pay and we hammer them and we tell them that the VA is not 
working, they know that is not true in the cases where they are 
out there on every case. So I think when we hear from them, I 
hear this feedback, I hear from the different groups and we try 
to get it right.
    And I just wanted to go on, on this providing solution 
things, that I think there are new ideas out there. I think 
this new model is starting to get there and I want to tie it 
all together. When I first got here eight years ago, the first 
thing I worked on was VHA's pain management issue, and this 
comes back to me again and again, mainly because it ties in on 
so many levels of veterans care, especially mental healthcare.
    And I think it is timely in that yesterday we signed in and 
tomorrow it will be signed by the President, the Clay Hunt Bill 
which is--we recognize one step. I recognize the incredible 
work that is already being done at VA, but I think it might be 
a new way at looking at this, a new approach, and it ties in 
with, again, why we bring these solutions and why we want to 
interact with you is, is the Tomah situation with the opiates. 
These are all connected. And I agree with you, if I had been 
here eight years and Tomah's in my area of operation, I own 
some of that, and I get that.
    So what I ask is, when we provide and we move forward on 
something like Clay Hunt, if we figure out a new model on how 
that Act is going to--and before we wait for it to run its 
course, we correct and self-correct. So I know it is a--I am 
throwing it out to you because I, for one, have bought into 
your vision of transformation. I, for one, want to be that 
partner and I, for one, want to make sure that I didn't pass a 
piece of legislation that added more to your plate and didn't 
improve the care of veterans.
    Secretary McDonald. We are very much in favor of the Clay 
Hunt act or the SAV Act, as it is called. We partnered with 
everybody who wants to do it. We are very much in favor of it.
    I had the opportunity to be on the Charlie Rose show last 
night with the writer of American Sniper with the leader of 
Team Rubicon, and I talked about the fact that we at VA are the 
canary in the coal mine for American medicine. We see things 
because of the battlefields that our veterans go on way before 
the American public. Mental health is a big issue in this 
country. Any veteran committing suicide is disastrous.
    And the work that you have done on the Clay Hunt Act, it 
gives us more residencies. It gives us the ability to pay back 
student loans. The average medical school student is graduating 
with about $185,000 in debt. The Care Act moved it--we can 
repay from $60,000 to $120,000. This is $30,000, additionally. 
I am working hard to try to get more residencies for mental 
health and to get greater throughput for mental health.
    But of those 22 veterans who we estimate commit suicide 
today, 17 of them aren't committed to the VA, aren't connected 
to the VA.
    Mr. Walz. That's right.
    Secretary McDonald. So one of the things I am working on is 
how do we get more people connected, because we do have 
treatments for post-traumatic stress. We do know how to 
alleviate it, and we just need to get those people connected. 
So we are working very, very hard on that.
    Mr. Walz. Well, to all of you, again, I am thankful, and 
thank you for working as partners in this, and as I said, they 
are difficult conversations because our veterans are counting 
on us to have those difficult conversations.
    I yield back.
    The Chairman. Ms. Radewagen.
    Ms. Radewagen. Thank you, Mr. Chairman.
    Mr. Secretary, I first want to thank you for the 
opportunity to have breakfast last week and share with you the 
concerns of some of our American Samoan veterans, who, because 
of our geographic and economic isolation, don't share in all 
the benefits that they are entitled to. And I want to thank you 
for presenting me with the seal, the beautiful seal of the 
Department.
    Our veterans, who make up ten percent of our entire 
population, have issues that are basic and comparatively small, 
but they are generally taken for granted, here in the States. 
In a nutshell, they need a cemetery. We have no map flights. We 
need access to better health care. Our local hospital has no 
CAT scan, no cancer specialists, so our veterans must always 
seek care off-island.
    ObamaCare, most of our veterans do not understand. Our 
troop store is always out of merchandise and there is always 
complaining as to why it is that we don't get merchandise and 
services provided to the PXs off-island.
    Our veterans have difficulty getting their medical records 
to even apply for benefits.
    But, Mr. Secretary, what I would like to ask you is: The 
VA's budget submission has identified an expected increase in 
claims receipts for fiscal year 2015 at $1.3 million and fiscal 
year 2016 at $1.4 million. These figures represent an increase 
of 17 and 20 percent, respectively, over the 1.14 million 
claims received in 2014.
    Can you please explain what factors and information you 
considered in determining the anticipated volumes of claims 
receipts for these two years?
    Ms. Hickey. Congressman [sic], absolutely.
    Let me just tell you that the largest portion of that is 
not going to be the brand-new veteran who is now leaving 
service, transitioning to us; it is going to be the fact that 
we have done so many veterans claims, 1.32 million, and every 
veteran is entitled to come back for any supplemental claim, 
which, by the way, is about 67 percent of our workload, meaning 
it is the majority of our workload is not our original claim, 
it is the, it has been aggravated, it got worse, and so as a 
result, you can come back and get another one. That growth 
largely attributed to the increased expectation for 
supplemental claims, and that is where the majority of it is.
    Ms. Radewagen. Thank you, Mr. Chairman.
    Secretary McDonald. Ma'am, I would like to--if we can, I 
would like to bring our leadership over and sit down with you 
and go through all the issues on Samoa and see if we can help 
and fix it. We care very much about every veteran and we care 
about those in Samoa.
    Ms. Radewagen. That would be great, Mr. Secretary.
    Secretary McDonald. We would love to do that.
    Ms. Radewagen. Thank you, Mr. Chairman.
    The Chairman. Ms. Brownley.
    Ms. Brownley. Thank you, Mr. Chairman.
    And, Mr. Secretary, I, too, want to thank you for your 
extraordinary leadership over the last six months, and I feel 
very confident that the rudder of the VA is being repaired and 
we certainly--I believe we are on a good trajectory for really 
righting the ship, and I really want to thank you for that 
leadership. And I want to thank you also for today's 
presentation and the analysis in the presentation, because I do 
think it absolutely demonstrates what the challenges are within 
the VA, both in the short and the long-term, and the fact that 
all of the challenges that we all must, collectively, tackle 
for our veterans. So thank you very, very much for that.
    I appreciate the meeting that we had in our office last 
week and I was very excited to go home this weekend and talk to 
my veterans in Ventura County and to let them know an important 
milestone has occurred here, including a new clinic in Oxnard 
for our veterans. It was quite clear to me that our veterans 
were under-served when I was first sworn into Congress, and I 
think this clinic will, indeed, right a wrong, and our veterans 
will be better served.
    And so I just wanted you to speak to that because I wanted 
my veterans in Ventura County to hear from you directly your 
agreement for the need of this clinic and what you think the 
time estimates will be to acquire the lease and build out the 
facility. If you could comment on that, I would really 
appreciate it.
    Secretary McDonald. Well, first of all, I apologized to you 
for not visiting Ventura County when I was in Los Angeles. That 
was a relatively quick trip and I was there for one reason, 
which was to get a settlement with the community and get the 
homeless veterans off the streets of skid row in Los Angeles. 
But I will come to Ventura county and get together with you and 
perhaps this would be a good topic to talk.
    As Deputy Secretary Gibson goes through and looks at our 
construction leasing process, I am hoping that the kind of time 
we have seen in the past to get something like Oxnard going 
will be shortened, and we will work together with you on that. 
Right now I don't have any estimates, but we will get together 
with you and we will work on that, and I want to meet the needs 
of the veterans in Ventura County.
    Ms. Brownley. Very good.
    And just as a follow-up, could you just describe, briefly, 
what the process will be in terms of--are stakeholders, are 
veterans being included in this process?
    Secretary McDonald. Absolutely. Absolutely.
    Just like I have done everywhere else I have gone, I bring 
together all of the stakeholders, members of Congress, veteran 
service organizations, mayors. Because as I said earlier, and I 
really do mean this, this really is a team sport.
    And, particularly, in the case of homelessness as an 
example, we can't do the right thing unless--we can have all 
the HUD house vouchers we want, but if there is not a landlord 
in the City of Los Angeles willing to rent at that rate, we are 
still going to have a homeless veteran. So, for me, what we did 
in Los Angeles is going to be a prototype of what I hope to do 
everywhere else in the country, which is VA can be the 
lightning rod to call the community together with the local 
mayor and work to improve the situation. In this case, we will 
work with you on the Oxnard facility.
    Ms. Brownley. Thank you very much.
    And I think we are making progress on the VHA side, and I 
think there is more progress to be done on the benefits side. 
This year is 2015. I was just curious to ask--we set an 
ambitious goal, your predecessor set an ambitious goal in terms 
of the backlog--just your comments in terms of meeting that 
goal?
    Secretary McDonald. As Allison said earlier, we think the 
goal is doable, so we are not changing the goal. But one thing 
that is really clear is we do need more people. Even though the 
productivity is up, the inflow is so great, the inflow has 
grown so much and the repetitive appeals has created a workload 
issue, that we have had to work mandatory overtime. Mandatory 
overtime is a prescription for disaster with a workforce--I do 
have some experience leading large organizations--and as a 
result of that, we have got to get more people or find either 
further productivity improvements, which we are working on.
    But going to the entire digital record has been a big, big 
improvement, and one of the nice things about it is we don't 
need any more space. We can hire additional people and all the 
space that used to be taken up with paper can now be people 
working on digital files.
    Ms. Hickey. In fact, Congresswoman, I want to thank the 
entire committee for increasing VBA's budget. We would not have 
been able to accomplish this without the support of this 
committee and every person on it.
    You saw the growth in the requirement from 2000, so thank 
you, Chairman, and thank you Ranking Member for being here long 
enough to really see us through that growth. I really 
appreciate that.
    But one of the things I wanted to tell you is there is a 
savings implication to this, we are not yet ready to be able to 
realize because we have got--working through the agreements 
with DoD on what we do with half a million cubic feet of paper 
we no longer touch, and that is 5,000 tons, and equal to ten 
Mt. Everests and 200 Empire State Buildings, just to give you a 
visual. We don't touch that anymore. Ninety-five percent of 
what we are doing now is in a paperless environment. We are 
working with DoD on a solution to get that out of the 
buildings. When we do, we have some potential lease savings in 
the tune of $30 million a year that we can bring back to you 
and say, ``This is what the benefit is by our not needing to 
house all of those cabinets and all those things anymore.''
    We are already realizing a $2.4 million savings in simply 
shipping costs of not moving all that paper around on a regular 
basis.
    Ms. Brownley. Thank you.
    And my time is way out, and I yield back.
    The Chairman. Mr. Huelskamp.
    Dr. Huelskamp. Thank you, Mr. Chairman.
    I appreciate the opportunity to visit with you, Mr. 
Secretary, particularly last week, and I would like to ask you 
a few questions and discuss the Choice Program, which is very 
important to me.
    As we discussed last week, my district includes 63 
counties; it touches four different VISNs, and that creates 
some problems. But distance is the main problem and access; 
there is no VA hospital in the district. I just had an email 
contact from a veteran who drives 340 miles one way for 
cardiology. If the VA Choice Program can't provide something 
closer for him, then we need to relook at how we are 
implementing that.
    One thing I would like to ask you, and there is some 
concern, particularly with providers, with veterans that are 
looking into taking advantage of that, is the fact that it is 
only a temporary program. Are you and the Administration 
committed to making this a permanent option for our veterans?
    Secretary McDonald. As you know, we have had an external 
program, and so I think an external program is necessary as we 
look forward to a future where the network is both VA care and 
outside care. We are also going through an analysis right now--
given the relatively low take rates, but, again, I don't want 
to assume that is going to continue, we are talking about how 
can we do a better job marketing it, and also, should we look 
at that 40 miles and change the interpretation of it, get CBO 
to score something differently so we can make sure the program 
is robust.
    Dr. Huelskamp. And your thoughts on making the Choice 
Program permanent, Mr. Secretary?
    Secretary McDonald. I am all for it. I am all for whatever 
it takes to satisfy veterans, to aid veterans.
    Dr. Huelskamp. And I appreciate and thank you for that. I 
appreciate the 40-mile discussion, because that creates 
problems. If you were in a place, for instance, that a CBOC was 
implemented sometime in the last 20 years, all of a sudden, 
that keeps you out of the Choice Program. And as I understand, 
the interpretation is even if the services aren't provided at 
the CBOC, that restricts that access.
    So for the gentleman in Dodge City, Kansas, that is asked 
to drive to Kansas City, again, 340 miles one way, it is only 
because there is a CBOC there and they are never going to 
provide the cardiology services that we need. So is that 
something that you are willing to look at interpretation or you 
are going to require us to pass some changes in the law? 
Because I think that can be interpreted that you would have 
that flexibility to make that determination.
    Secretary McDonald. Actually, it is pretty straightforward 
in the law, at least that is what we have heard from CBO and 
from others.
    But we are going to work on different options. Each option 
will have a different estimated price and we will come back to 
you and let you know what those options are and together we 
will decide what is the best thing to do. I agree with your 
point of view that distance from a place you can't get the 
service seems like a relatively weak measure, but that is what 
has resulted in the current appropriations. So we have got to 
work with CBO to score all of those opportunities and decide 
together.
    Dr. Huelskamp. And I can follow some of that, but as the 
crow flies versus as a real person drives, I think that is an 
interpretation that can be changed.
    But even with the 40 miles that is in the Choice Program, 
there is nothing that would prohibit you from using a fee-for-
service approach in this exact same situation, which has 
created many of these problems.
    Secretary McDonald. Correct.
    And that is the marketing that we have to do, too; we have 
got to get the word out that that is possible.
    Dr. Huelskamp. Well, the word, I think needs to go with the 
folks answering the phone at the VA Regional Medical Center, 
because that is not what they are told, that you could get your 
cardiologist services and drive a hundred miles to Hays, no. 
You can go to Wichita, which by the way is only 157 miles, but 
he wanted services that were a little bit better, and so they 
said you can drive 340 miles when he probably could have gotten 
those right in his own hometown.
    The answer always should be, Yes, we can, we are going to 
look at a way. And if it is not the Choice Program, we have got 
the fee-for-service that we should be using--should have been 
using all along. And I know it varies if you are in an urban 
area, but, again, when I am in a rural area, I actually have 70 
community hospitals that are coming to my office and say, Tim, 
we would like to serve those veterans and we are not able to. 
And the Choice Program, if we can make that permanent and then 
expand our understanding of the fee-for-service approach to 
that, I think we are going to serve veterans better and give 
them access to the care they deserve.
    So I appreciate your efforts on that, Mr. Secretary. 
Appreciate your commitment to making these programs permanent, 
because I think they are critical to making sure that the VA 
works long-term, so thank you.
    I yield back, Mr. Chairman.
    The Chairman. Ms. Rice.
    Ms. Rice. Thank you, Mr. Chairman.
    So, Mr. Secretary, I wanted--as everyone here has thanked 
you, I thank you for spending time with me yesterday. I think 
it is incredibly informative, and I, personally--all the brave 
men and women that work so hard to protect our freedoms deserve 
the help right now. But what they don't--and I know that is 
what you are working towards and your whole team is working 
towards--but what they don't deserve is a ``knee-jerk, try to 
Band-Aid on a gaping wound fix,'' and so I appreciate, as I am 
sure everyone on this committee does, the thoughtful way that 
you are approaching all of these reforms. Because I think that 
they are going to serve the brave men and women that protect us 
in the long run.
    So I just have a couple quick questions. You mentioned the 
22 veterans who commit suicide every day. I think you said 17 
of them had not accessed any service within the VA. How are you 
going to--and we had spoken briefly about this yesterday--but 
how are you going to reach out to them?
    Secretary McDonald. There are a number of things we have to 
do. Number one, we have to eliminate the stigma in this 
country, but it exists across the world, around mental health 
care. I am thinking that this is a fortuitous moment in time 
because American Sniper, the movie, the largest-selling war 
movie, is starting to do that. That is why I went on the 
Charlie Rose show last night was to talk about this.
    When Congressman O'Rourke and I were together in El Paso--I 
will never forget it--we were looking at a private sector 
hospital and there was a neon sign at the top of this one 
building that said mental health clinic, and there wasn't a car 
in the parking lot. And I turned to him at the time and I said, 
well, of course, there is not--it wasn't his hospital; it 
wasn't our hospital--but, of course, there is not a car in the 
parking lot.
    What we do is we take our veterans, through the primary 
care physician, into the mental health treatment, and as a 
result of that, the stigma doesn't exist, and they may not even 
know that they are talking to a psychiatrist. So we have got to 
get rid of the stigma.
    Number two is we have to reach all of the veterans. We have 
the ability to put on the TV, a public service campaign that 
the Ad Council is working with us pro bono to get people signed 
up, but I don't feel, yet, that we are ready for that. That our 
capacity is so strained that if we were to get a lot more 
people into the system not for mental health, that we might 
have issues.
    And, third, we have to train the American public. If you 
see somebody who you think has an issue--we have an algorithm 
or not an algorithm--an acronym called SAV. S is about seeing 
and recognizing that the individual may have an issue. We have 
a hotline, a 1-800 hotline that you can call to get that person 
help and then we go immediately into action.
    Those are some of the things we are doing. It is not 
everything. The medical exam when you leave DoD is also a big 
help, but we have got to get our arms around the 17 veterans 
and care for them.
    Ms. Rice. Now, I know that there is discussion in terms of 
the facilities in California that are vulnerable to 
earthquakes. The VA is just outside my district, but I still 
claim it as my own, obviously, on behalf of the veterans that 
live in my district and have to travel out there.
    Superstorm Sandy hit my congressional district harder than 
any other place in New York state, and I was wondering if part 
of your construction plan included--I mean I understand the 
focus on earthquakes in places like California, but in 
similarly fragile and vulnerable areas like Long Island, is 
there a plan to have some emergency preparedness to prevent 
any----
    Secretary McDonald. Yes.
    Ms. Rice [continuing]. Interruption in services?
    Secretary McDonald. When we do our construction management 
process, we call it SCIP; it is another acronym. I owe you that 
acronym dictionary.
    Ms. Rice. We need an encyclopedia of acronyms in 
Washington.
    Secretary McDonald. But safety is number one, and we 
consider seismic and other natural disasters as safety, so that 
is always the first priority.
    In the case of Sandy, for example, we have a facility near 
the Battery, near Battery Park in Lower Manhattan, and it was 
devastated. The entire first floor was water. I visited the 
facility.
    We are now building a wall that can help us keep out higher 
levels of water should another storm occur. So express safety 
is always number one--and I don't have the specific facts on 
the facility in Long Island, but we can get together with you, 
and we can go through that.
    Ms. Rice. I would appreciate that.
    Again, thank you so much, Mr. Secretary and to your entire 
team.
    Secretary McDonald. You're welcome. Thank you.
    Ms. Rice. And I yield back my time.
    Thank you, Mr. Chairman.
    The Chairman. Dr. Benishek.
    Dr. Benishek. Thank you, Mr. Chairman.
    Thank you, Secretary Vilsack [sic], for being here with 
your team. I think a lot of the members this morning, we asked 
a lot of great questions and touched upon a lot of the issues 
that I want to talk about. I want to commend Dr. Wenstrup there 
for bringing up the costs of care.
    And that is something that I am very concerned about, and I 
wanted to ask a few more questions about when you think that 
you are going to have an idea of when that is going to be or is 
this independent review of the VA system, is that going to help 
look at that number? Because I know I am very concerned about 
it in continuing to implement access to care locally.
    Can you just elaborate on that a little bit?
    Ms. Hickey. Sure. In addition to the external independent 
assessments, which we anticipate will be here around August or 
before then, we are also commissioning some internal work, 
internal contracts and so forth from some of the leaders in 
industry just to figure out how do we get to some of the 
questions that you raised in your recent hearing when Dr. 
Tuchschmidt presented and so forth.
    One of the issues that we struggle with in terms of cost is 
this reliance factor, you know, where some veterans use VA for 
some of their needs, but they go outside for others. My uncle 
recently proudly told me he got his hearing aid, but by and 
large, given where he lives, does not actually go to VA for 
most of his care; he goes closer to home. So that is part of 
the issue that we have got to work through, as well as this 
issue of fixed and variable costs.
    And, again, I think this is why the secretary raising this 
issue of fixed costs that are kind of a drag on the budget in 
terms of getting to the issues of access and veteran experience 
are so important.
    Dr. Benishek. I think that is what Dr. Wenstrup was talking 
about, is that, you know, the cost of these half-a-billion-
dollar hospital overruns, that all adds to the costs of taking 
care of a patient who walks into the clinic. I just want to 
make sure that all of these costs are included in that because 
we are supporting a bureaucracy that--are we supporting way too 
much of a bureaucracy for the care that we are getting out of 
it. I mean that is my concern.
    Ms. Hickey. That is a fair question and it is one that----
    Dr. Benishek. Let me just ask another question here, and 
this is something else that we have talked about in our 
subcommittee as well, is this management of pain within the VA. 
Because I know it has been over a year that we have talked 
about this in my subcommittee and this opioid medication and 
the high doses and the number of prescriptions written, and 
then this recent troubling incident with the IG in Tomah. What 
has been going on in the VA recently to try to address pain 
management; is there a better pain management system? Is there 
a referral to a pain management specialist?
    Tell me a little bit more about what is happening more 
recently, and how are we going to put an end to this, you know, 
the practice of using opioids on a chronic basis for people 
with chronic pain.
    Secretary McDonald. I will ask Dr. Clancy to give you the 
specifics, but one of the things that I wanted to say at the 
beginning is we take this opioid use very, very seriously, and 
we track it very closely.
    And one of the things that I am very proud of that we do in 
the VA that I don't see as much of in the private sector is we 
use a lot of alternative approaches, alternative medicines. We 
use acupuncture. We use yoga. We have used electronic devices 
that have shown to be effective amongst some of our veterans. 
Anything we can do to get that veteran off of opioids is 
something we want to do. And we are developing quite a broad 
array of tools that we can use that allow us to reduce the 
opioid use.
    Dr. Benishek. Well, I mean that sounds great, Mr. 
Secretary, but I think if you look at the numbers of people who 
are not on the alternate treatment versus the opioids, you 
would find that there are a lot of people on opioids compared 
to the number of people that are getting alternate therapies.
    Secretary McDonald. There are.
    Dr. Benishek. And it is great that you mentioned those 
things, but it seems like there should be a lot more people 
having access to pain management specialists than are being 
treated by their family physician or their primary care 
physician with narcotics.
    Dr. Clancy. So, really an incredibly important and serious 
issue. I think, as you know from your prior hearing--and we, 
again, would be happy to brief you in more detail--we actually 
track opioid use per facility. Each facility has a dashboard, 
and nationwide since we launched this safety initiative, we 
have seen the trend line go down, which is a good thing. But we 
are also looking at the prescribing patterns of individual 
physicians to see--to make sure that an overall positive trend 
that is going down isn't masking some practices that we would 
consider suboptimal.
    We are supporting a lot of research in this area as well, 
because the combination of non----
    Dr. Benishek. Well, again, that is great, but it is 
unfortunate that apparently the situation in Tomah sort of 
contradicts what you are saying here today, and we just want to 
make sure that we maintain a high vigilance on this problem.
    So, I am out of time, but I certainly appreciate your 
efforts.
    Dr. Clancy. Thank you.
    The Chairman. Thank you very much.
    Members, Ms. Brown has one final question.
    Ms. Brown. Thank you, Mr. Secretary, and thank you for your 
service.
    I have one question. Just a few minutes ago, the 
congressional audit came out, and I don't know whether you have 
seen the article, VA health care is at high risk, and I guess 
they do this audit every two years. In reading it, it seems 
like they were rehashing a lot of the stuff that is going on.
    You know, I appreciate you going on television, I just 
think we need to respond in our town hall meetings. You know, 
we see about seven million people a year that once they get in 
the system, they are happy with the service.
    So, can you speak to the article that is just coming out 
today and whether or not you would be willing to do an updated 
piece to USA TODAY, because I think it is important that 
veterans are not sidetracked. We are definitely headed in the 
right direction.
    Secretary McDonald. Yes, ma'am.
    I actually met with the comptroller general, and we were 
talking about whether or not he should put VA on the high-risk 
list. I actually encouraged him to, and the reason I did that 
is because we are a healthcare system, and we are going through 
a large amount of change right now. And during the time that 
any organization goes through a large amount of change, we need 
to make sure that we have the appropriate oversight, the 
leadership, as well as those responsible for it.
    So while I think the VA system is absolutely essential to 
American medicine--we train 70 percent of U.S. doctors. We have 
developed innovations that are absolutely critical for American 
medicine, the first liver transplant, first implantable 
pacemaker, nicotine patch, first time bar code is used to 
connect patients with medicine. We have got to make sure we 
have a robust VA.
    And so as we go through this change, I am thankful that you 
in your oversight role and others will be helping us get 
through this change and develop this robust system that this 
country and our veterans need.
    Thank you.
    Ms. Brown. I want to, again, thank you all for your 
service.
    The Chairman. Mr. Secretary and everybody at the table, 
thank you for being here today. You are excused.
    If we could go ahead and have the second panel come to the 
table, we need to continue.
    I invite the second panel to the table and welcome Mr. Carl 
Blake, Associate Executive Director of Government Relations at 
Paralyzed Veterans of America who is going to be testifying to 
the committee on behalf of the co-authors of the Independent 
Budget. Accompanying Mr. Blake is Mr. Joe Violante, National 
Legislative Director, DAV; Mr. Ray Kelley, Director, National 
Legislative Service, Veterans of Foreign Wars; Ms. Diane 
Zumatto, national legislative director, AMVETS, and we are also 
going to be having testimony from Mr. Ian de Planque, 
Legislative Director, The American Legion.
    Mr. Blake, you are now recognized for five minutes.

  STATEMENTS OF MR. CARL BLAKE, ASSOCIATE EXECUTIVE DIRECTOR, 
GOVERNMENT RELATIONS, PARALYZED VETERANS OF AMERICA, ON BEHALF 
 OF THE CO--AUTHORS OF THE INDEPENDENT BUDGET, ACCOMPANIED BY 
MR. JOSEPH A. VIOLANTE, NATIONAL LEGISLATIVE DIRECTOR, DISABLED 
     AMERICAN VETERANS; MR. RAY KELLEY, DIRECTOR, NATIONAL 
  LEGISLATIVE SERVICE, VETERANS OF FOREIGN WARS; MS. DIANE M. 
ZUMATTO, NATIONAL LEGISLATIVE DIRECTOR, AMVETS, AND MR. IAN DE 
       PLANQUE, LEGISLATIVE DIRECTOR, THE AMERICAN LEGION

                    STATEMENT OF CARL BLAKE

    Mr. Blake. Thank you, Mr. Chairman, Members of the 
Committee.
    On behalf of the co-authors of the Independent Budget 
seated here at the table, I would like to thank you for the 
opportunity to testify today on the VA's fiscal year 2016 and 
2017 budget. I ask that our report, the Independent Budget for 
the Department of Veterans Affairs for fiscal year 2016 and 
fiscal year 2017, be admitted into the official hearing order.
    The Chairman. Without objection.
    Mr. Blake. Thank you, Mr. Chairman.
    Let me begin by saying we believe this is probably the best 
VA budget we have seen in my many years of being up here on the 
Hill. That being said, recent media reports have pointed out 
that the VA has had hundreds of millions of dollars in unspent 
resources carried over in recent years. The IB does not dispute 
that fact. In fact, the VA has done a questionable job of 
managing the insufficient resources it has been given in the 
past. We believe that the access problems and the long waiting 
lists identified over the last year clearly affirm that point.
    However, we also believe that the VA, prior to this year, 
has continuously requested insufficient funds to adequately 
provide healthcare and benefit services to veterans. Yes, 
Congress has given the Administration virtually everything it 
has requested yearly, but that certainly does not mean that the 
VA has requested what it truly needs. Perhaps the Office of 
Management and Budget would have something to say about this.
    This does not mean that the VA should not be properly 
scrutinized for what it spends or does not spend; in fact, we 
wholeheartedly support this notion. But it should be scrutiny 
grounded in facts, not in rhetoric or poorly formulated 
assumptions.
    The Independent Budget recommendations represent our view 
of the actual resource needs of the VA to provide services 
across the entire spectrum of programs. Our views are not 
clouded by a particular agenda or by politics. Despite the 
closeness of our recommendations, the IB is an independent 
assessment of the VA budget requirements developed before the 
Administration even released this most-recent budget request.
    It is not bloated with unnecessary resources and 
administrative support. I would call your attention to the 
clear differences between our recommendations for such line 
items as medical support and compliance, general of 
administration and IT to affirm that point. Our recommendations 
focus on the areas where service is the linchpin: medical 
services, major/minor construction, the Veterans 
Administration, the National Cemetery Administration, and other 
key areas. A couple of those key areas were recently identified 
in our policy agenda that we released back in January. Those 
include women veterans programs and Caregiver Support Programs. 
We appreciate the emphasis this Committee has put on these two 
areas. We certainly appreciate the fact that the Committee held 
a hearing back in December to review the Caregiver Support 
Program; it is a high priority for many of our members. Those 
two issues are particularly critical issues in this year's 
Independent Budget.
    Clearly, there are wide-ranging opinions about how the VA 
manages its capital infrastructure. We have no doubt that VA 
construction and contract management has been a disaster. The 
only people to suffer the consequences of these failures are 
veterans seeking care, particularly in the Denver area. But 
none of this changes the fact that the VA has a huge backlog of 
valid building projects that are in various stages from initial 
planning to near completion.
    Nevertheless, we believe the VA has not shown the level or 
degree of commitment in its request for resources to get all of 
these projects moving in the right direction or to complete 
them. We stand with the Committee to resolve these VA 
construction management problems and we hope that that will be 
done quickly.
    Lastly, I would just like to comment on a couple of points 
that have been raised here. With regards to the question about 
cost for care, we are certainly not experts, but I would 
suggest that in all of the briefings I have received about the 
VA's Enrollee Health Care Projection Model, that if one wanted 
to know how much it cost to do a particular procedure in any 
region in the United States, that that model would produce a 
number, at least that is what we have been told over the years 
when we have been briefed on this.
    So what I would expect that if the Committee wanted to know 
how much it cost to do a colonoscopy which came up over and 
over again in the cost for care hearing, that the VA can 
probably produce a number. We appreciate the fact that the VA 
is committed to providing better information with regards to 
the cost for care. We look forward to having an opportunity to 
review that information, as well.
    And then lastly, the question about the Choice Program, 
which the VA has brought right out into the light of day, I 
think the Independent Budget probably agrees with the principle 
that the secretary has laid out, that, you know, you shouldn't 
be obligated to spend the money you have been given for one 
singular purpose. I thought the secretary's analogy he used 
about gas versus food is a perfect way to describe the need to 
be able to shift money around.
    That being said, I'm not sure that we also agree with 
taking money from a program right now that is clearly in its 
infant stage. I think that program clearly has to be given time 
to flush itself out and see what actually occurs. Three months 
is certainly not enough time to do a thorough evaluation of 
utilization of the Choice Program. So until there has been more 
time to really fully evaluate what will happen, I'm not sure 
that we fully support what the Administration is requesting.
    With that, Mr. Chairman, I would like to thank you again 
for the opportunity to testify, and I would be happy to answer 
any questions that you or the members of the committee may 
have.

    [The prepared statement of Carl Blake appears in the 
Appendix]

    The Chairman. Thank you, Mr. Blake.
    Mr. de Planque.

                  STATEMENT OF IAN de PLANQUE

    Mr. de Planque. Good afternoon, Chairman Miller, Ranking 
Member Brown, Members of the Committee.
    I would also like to thank Secretary McDonald and his staff 
for their words today.
    I am very fortunate to sit here and speak on behalf of The 
American Legion for our National Commander Mike Helm and the 
2.4 million members in over 14,000 posts across the country, 
who make up the backbone of the world's--the nation's largest 
wartime service organization.
    We are focused on getting things right, not just for our 
over two million members, but for over twenty million members 
beyond that who are veterans, people who have worn this. I was 
struck by something that Secretary McDonald said earlier today, 
``This is a team sport; we can't do it by ourselves.'' I think 
everyone agrees that the country owes a great service to the 
veterans, that the country owes a lot of things to the 
veterans. The country is not just the federal government. The 
VA is a piece of that, but I think everyone here, everyone here 
at this table, everyone here in this room is also a piece of 
that. We all have to work together on this.
    I spent two of the last four weekends out at various 
grassroots events for The American Legion in Nebraska and 
Kansas out there with blue cappers like myself, you know, who 
were there, actually out there wanting to go out and go into VA 
hospitals and help out in whatever way they can. We had over 
7,000 legionnaires donating almost a million hours of volunteer 
service to the VA. This only works if we are all on the same 
page, if everyone is on the same page.
    And, Ranking Member Brown, you mentioned earlier that you 
wished H.R. 216 was the law of the land, as an important 
resource and tool that would help with that. I think we agree 
very much, and I know in the legislative hearing earlier when 
it was discussed, I think there was a lot of agreement on both 
sides of the aisle on that. We have to be able to look back and 
forth and compare these things.
    I was speaking with a colleague of mine about VA's 
Strategic Capital Investment Plan and whether or not they are 
putting enough money into these things. The American Legion 
about four years ago was talking about looking at VA's 
construction figures. It was going to take them 60 years to 
complete the 10-year plan in SCIP if they went forward with 
those numbers. But trying to compare the figures together and 
what are still there, you are pulling up a budget from one year 
and you are trying to hold it next to another--having it all 
laid out there, right for you where all stakeholders can 
participate in that--I know, Chairman Miller, when that bill 
was up in a legislative hearing, you spoke about the importance 
of the transparency for it and how you had seen in Armed 
Services that they are transparent with that. We need to have 
that same kind of transparency with the planning for the VA 
budget so we can maximize the resources that everyone is 
putting into this.
    We have a lot of great organizations. We have a lot of 
great veterans who are out there trying to make this a better 
system. We believe in a VA system. We believe the Choice card 
is important because we have to get access to care for 
veterans, but we want to make sure that the veterans still have 
access to that system.
    It is there because Secretary McDonald talked about the 
demand expanding beyond VA's capability to meet that. Well, we 
need to make sure the resources are allocated to meet those 
demands, but we can't lose sight of the focus that it is the VA 
that we want to be needing that. The VA that we want to be the 
leader that is pioneering medicine, that is the utmost expert 
in so many conditions. You look at a traumatic brain injury, 
you look at post-traumatic stress disorder, you look at 
amputation injuries, there is no reason that the VA should not 
be the world's leading authority on that and we need that to 
happen, and that comes from everybody working together, and 
that comes from everyone being on the same page.
    The American Legion is absolutely devoted to that. We need 
to be able to look at these pieces. I think VA's request for an 
additional 700, 770 full-time employees to work on the claims 
backlog, it is important. I think there is a very good point 
that they have been given more staff and that they were 
supposed to have been increasing their productivity, but you 
can't deny the fact that they have been on mandatory overtime 
for four years. Going through four weeks on mandatory overtime 
says you might have a little bit of a problem. Going through 
four years on mandatory overtime says you might not have enough 
people to do that. Now, we don't know exactly how many people 
we need in every office, and that is why we all need to be able 
to look at these figures on the same page together.
    I think working together we can do that. We are very 
committed to being a major partner in that and helping to drive 
that. We want this system to be the best system that can be for 
veterans. I think the Committee has been very generous in 
giving budgets to the VA to work with, we just need to keep 
everyone working on the same page and I think we can accomplish 
that.
    Again, I thank you for having The American Legion here to 
speak on this. Thank you for having all the veterans' groups to 
speak on this, and I look forward to any of your questions.

    [The prepared statement of Ian de Planque appears in the 
Appendix]

    The Chairman. Thank you very much for your testimony. I 
would like to ask either of you, if you would, kind of one of 
the critical components and probably one of the toughest things 
that the secretary is confronted with is going to be closing 
outdated, old substandard, or particularly underutilized 
facilities. It is not easy politically. It is not easy, as the 
secretary has already alluded, but I would like to know if you 
feel like that is an important step that the secretary has to 
look at.
    Mr. Blake. Mr. Chairman, I am going to defer to my 
colleague, Crandall Construction, for the IB.
    Mr. Kelley. Mr. Chairman, absolutely.
    If VA is holding property that it no longer uses or is 
underutilized, they need to find out how to get rid of that 
property. But in the process of figuring out how to get rid of 
it, they also need to have that conversation with the community 
to ensure that those veterans understand there are going to be 
services still there.
    That is the fear in the community, is my hospital is going 
away, therefore, my services are going away. They need to 
understand that full continuum of care is still going to be in 
the community and it is just going to be right-sized for that 
community. There is no need to spend three dollars per square 
foot to maintain a building that is no longer being used, just 
to keep it mothballed.
    Mr. de Planque. If I could dovetail onto that, the thing 
that comes to mind is Hot Springs which The American Legion has 
been very involved in, and that community desperately wants to 
keep their medical center. I can absolutely understand if you 
have an underutilized building and it is just taking up empty 
money that is not serving any veterans in the community. And 
certainly there are probably regions where it is just not 
effective, but we have to make sure that those veterans are 
included as a part of that planning process and that they are 
being listened to.
    I know there has been a tremendous amount of frustration in 
Hot Springs, that the community is adamant, it is vehement, and 
it has been organized and has tried to voice its opinion at 
every step along the way, that we need this facility here, this 
is serving the veterans in this area, and they are very 
concerned that that is not being heard.
    So, yes, I think that it is important to be able to open up 
to some possibilities with that, but let's make sure that we 
are also still serving the veterans.
    The Chairman. Any other comments?
    Mr. Blake. Mr. Chairman, I would only add, too, one thing 
we would caution as they make a determination of where 
facilities are underutilized or unused, that they be innovative 
also. You know, we have talked for years about using some of 
these underutilized spaces for the homeless veterans issue.
    You know, one of the challenges of homelessness is having 
supportive housing that allows them to then transition into 
finding a job and being able to sort of become a productive 
member of society again. So before they choose to close a 
facility, I would hope that they would think outside the box in 
some of these areas where these facilities can serve a purpose.
    That doesn't mean that some facilities shouldn't just be 
closed, especially if they are sitting empty and have been 
sitting empty too long.
    The Chairman. Mr. Blake, where, specifically, do you think 
the administrative costs within VA could be reduced and where 
could those funds be reallocated? And, specifically, I guess we 
are talking about page 3 in your testimony.
    Mr. Blake. Well, I would suggest, Mr. Chairman, from the 
perspective of the recommendations we have made, we have sort 
of stuck to the same principle over the last couple of years, 
that we directed most of our recommendations at the medical 
services line where the rubber meets the road for providing 
healthcare.
    There has been some discussion about plussing up staff like 
in the general administration line items, which are a lot of 
the offices here in Washington, DC. We have also had some 
conversations with the Committee staff on the VHA side about 
the administrative costs that exist at the VISN level and 
across the various layers that exist within VHA. We were 
interested to see the plan to seemingly transition the regional 
framework of VA. What we would certainly hope to see--or hate 
to see, I should say, is we transition to a five-region 
alignment and where we go from 22 VISNs with 125 to 150 staff 
to five regions that are just those people shifted into a 
regional alignment and you didn't streamline your 
administrative support at all.
    The Chairman. If I could, the secretary asked Mr. Coffman 
to ask a question of the VSOs, and since Mr. Coffman is no 
longer here in the room, I will ask the question on behalf of 
the secretary: Have you seen a difference in the VA?
    Mr. Violante. Mr. Chairman, the fact that the secretary and 
his leadership team are still here I think answers that 
question. I think we have all been impressed of what he and 
Deputy Secretary Sloan Gibson have done in the short time that 
they have been here. So I would have to say that, yes, we 
appreciate what he is doing and what he is trying to do and 
hope that you will work with him to make sure that these 
changes happen.
    The Chairman. Mr. Kelley.
    Mr. Kelley. Yes, we see a difference in spots. There are 
going to be areas that are slower to change than other areas, 
but we are seeing pockets of improvement.
    Just solving the problem in West LA, that land-management 
issue in a very short time, something that has been around for 
years, is indication that he is hands-on, he is going to get 
things done, and he expects people at all levels to do the same 
thing.
    The Chairman. And if I could--my time has expired, but 
could I just get a yes or a no, Mr. Blake?
    Mr. Blake. I will give a yes.
    The Chairman. Mr. de Planque.
    Mr. de Planque. Definitely a yes, and they are starting to 
own problems, too, which is a big change.
    The Chairman. Ms. Zumatto.
    Ms. Zumatto. I would agree with my colleagues.
    The Chairman. Okay. Very good. Thank you.
    I agree, too. There is a difference, and I would also say 
that Ms. Brown's H.R. 216 is scheduled to be marked up 
tomorrow, and so we would expect to see that pass very quickly.
    Ms. Brown.
    Ms. Brown. Thank you.
    I would like to associate myself with the remarks of the 
gentleman from Florida. I absolutely think there is a change in 
VA and it is headed in the positive direction.
    And when you talk about VA, I remember going to LA, and we 
had four brand new units sitting for over two years that we had 
built those units, 400 units, four separate buildings that 
stood vacant for two years because we built them, but the State 
of California did not have the money to operate it. We have got 
to make sure that that does not happen in the future, and I am 
very pleased that he was able to go in and resolve those 
issues.
    For the first time we have forwarding budget in all of the 
categories. Can you give me a response as to how you feel about 
how this is going to help VA move forward. I just want to hear 
from all three.
    Mr. Blake. Well, I would say Ms. Brown that, you know, we 
offered our support for the legislation at the legislative 
hearing a couple of weeks ago. I think Mr. de Planque hit on an 
important point, that this would allow for more transparency as 
they develop their needs going forward.
    I would also suggest that, you know, the secretary--what I 
appreciate seeing is I believe this is the first time that I 
have seen the VA take serious, this requirement, as part of the 
advanced appropriations process. You know, for the last several 
years since this was passed, one of our chief complaints has 
been that the Congress passes an advance appropriation, as 
requested by the VA, and then the next year, there is no real 
adjustment or no consideration given to how that should be 
adjusted.
    And this is certainly the first year that I can remember 
where a substantial analysis review and re-estimate for its 
need has taken place. So we appreciate the fact that this 
leadership team in particular seems to have taken this 
requirement far more seriously than in the past.
    Mr. de Planque. I also want to note I think the forward 
funding, you are not going to have veterans who are worried 
about not getting their checks if, for some reason, there is 
some friction between the Congress and they can't get a budget 
passed. I am not as worried about that immediately, but I mean 
that is an important guarantee for them down the road, but I 
also think that that planning component that is going along 
with your legislation is a critical, like handshake with that 
bill. The ability to plan is critical as we are forward-funding 
things and to be able to look down the road and see the 
anticipated results beyond that. So I think they are kind of 
hand in hand with each other and very helpful.
    Ms. Brown. One other thing. Let me mention that when I 
first came here, we were going through a bright process and, of 
course, we support closing some of the VA facilities, but keep 
in mind as meant, just as long as you don't close any in 
Florida. But that is kind of the mentality of the members of 
Congress. So as we work through it, we have to keep in mind it 
is a team effort and that those communities need to have input 
and involvement as we evolve as to what we want the VA to look 
like. Because we are sitting up here saying, This is the right 
thing. This is the best thing for the country.
    But when we go to some little place in, what, high 
springs--Hot Springs?
    Mr. de Planque. Hot Springs.
    Ms. Brown. Hot Springs.
    You know, that community feels that they are going to be 
disenfranchised, so the question is: How do we have these other 
communities and everybody involved in those decisions?
    And don't think that politics doesn't play a part, because 
when you get ready to close that, when the senators weigh in 
and, you know, some senators say, We don't do that, we are just 
interested in what is best for the country. That is not always 
the case, as experienced it with brack.
    So I want to thank you all for your service and for your 
presentation. Any closing remarks? I have thirty seconds.
    Mr. Blake. I would say this, Ms. Brown, we have also--it 
has been nice to see that some of the folks in central office 
have been more open to deal with us on a regular basis. I have 
already had two briefings on VHA's model and their cost for 
care since the cost for care hearing, which was two weeks ago.
    Prior to that, the last hearing or last meeting we had with 
VA employees on the healthcare model was back in 2009. So they 
are clearly more in tune with the concerns of the Committee, 
the concerns we raised and trying to get us more involved in 
the discussion so we know what they are doing. Whether we 
necessarily wholly support it or not, at least we have a better 
idea of where they are going and what they are doing.
    Ms. Brown. Well, I feel the same way.
    I think I have been over there about four times at 8:00 in 
the morning or 7:00-something, and I want to get the entire 
committee over there to review like the town hall and the 
discussion so that we have a better feel as to what is going on 
over there, because I think it is very exciting to have the 
employees involved in what we are doing and it is not from top 
down, but it is the input of the employees, too. And one-third 
of them, I often see are veterans or more.
    So, thank you, Mr. Chairman. Thank you for the hearing, and 
I yield back the balance of my time.
    The Chairman. Thank you very much.
    Dr. Abraham.
    Mr. Abraham. As a new Congressman and fortunately a new 
member of this Committee, I am very honored to be here. And 
just six weeks ago I was a practicing physician that was 
privileged to see veterans in my clinic. I am jumping up and 
down with joy for this Choice Program.
    And my question is, on these guys' levels, are you, 
Members, are ya'll getting feedback on the implementation of 
the Choice? Is it working? Is it fairly seamless? Where does it 
stand from ya'll's Members perspectives?
    Mr. Kelley. The VFW commissioned a survey through our 
membership to get feedback and we are doing a two-part survey. 
We cut it off at the beginning of this month, so for a two-
month period. We found that a good portion of veterans who 
called for an appointment to VA, when they interacted with VA 
to get an appointment, were not told that they had a choice.
    But now that we are in the second phase of this survey, we 
are finding more of those veterans are understanding that they 
have a choice, and VA employees are being educated to provide 
that choice. So we are seeing that trend of access go up, but 
at the same time, early on, the perception of choice was very 
positive or the experience of choice was very positive; there 
seems to be a trend that now that it has more people in it, 
that there is a slight down-tick in people's opinion of it, of 
the care that they received.
    It is something that we are going to continue to monitor. 
We will have a report very soon that weighs out those 
analytics.
    Mr. Abraham. Fair enough.
    Mr. de Planque. Likewise, I wanted to touch on that 
because, again, I just recently talked to a number of people. 
One of the biggest earlier concerns was there was a lot of 
confusion over whether or not people were eligible. There was a 
lot of confusion among the access. I mean we get calls in the 
office in DC all the time about this, as well, and so we have 
been working hard and I know that VA has been working hard as 
well to try and educate better about that.
    There is a lot, particularly the 40-mile straight line when 
you are in a rural area where the roads aren't that accessible, 
the, well, I am close to a clinic, but the clinic doesn't offer 
the services I need, as was mentioned I believe by Mr. 
Huelskamp in Kansas. You know, when you are driving 340 miles 
to get to something. So there was a lot of concern about that 
and we have heard a lot of bad feedback from the members.
    As far as, you know, whether they want to use the Choice 
Program or whether they want to use the VA, it has been mixed. 
We have some people that have been very happy with the care 
that they got at the VA, they just couldn't get access to it 
and they were frustrated by that and they want to get back into 
the VA; on the other hand, some people were very excited about 
the options of looking out.
    So we are continuing to monitor that. The biggest part that 
we noticed early on has been a little bit of the confusion 
about eligibility, particularly with that sort of 40-mile 
circle and whether or not--how that interacted with facilities 
that didn't treat the condition they had.
    Mr. Abraham. Gotcha.
    Mr. Blake. I think the playing field is a little unlevel in 
trying to evaluate it right now, too, when you consider that, 
one, the VA doesn't have the capacity to meet all the demand as 
we see it, and at the same time, we don't know for sure that 
the private sector truly has the capacity to meet the demand 
that might come from the Choice Program. I think that is a 
great unknown.
    I think we forget that private healthcare is a business and 
they maximize their revenue for their business by not operating 
with excess capacity, and so it would stand to reason that when 
people try to access the private healthcare system that they 
might find challenges. I mean we find challenges using private 
insurance now. If I try to get an appointment for specialty 
care at George Washington University Hospital right here in 
town, it could be six months.
    So there are challenges. So the field is not level on the 
VA side or the private sector side yet. Until we have had a 
little more time to let the program itself even out, allow the 
VA to get its footprint more firmly planted by expanding its 
capacity, I am not sure that we can do a real thorough 
analysis.
    Mr. Violante. From DAV's standpoint, we are getting ready 
to go out with a survey of our members to see what they are 
hearing, and we are not really hearing complaints. There is 
some confusion, as has been said, and I get X amount of miles 
for beni-travel, but then when I apply for this, they are 
telling me that I am not that far away and that is because of 
the way the law was written.
    But early on, our people were more concerned of being 
forced out of the system, thinking that if they lived more than 
40 miles away or had to wait longer than 30 days that they 
wouldn't be able to come into VA, and that concerned them 
greatly.
    Mr. Abraham. But that has been dispelled, certainly--that 
misinformation has certainly, hopefully been dispelled.
    I think what we all envision here is that the veteran, when 
he needs primary care, such as a bronchitis--and I don't mean 
to minimize a simple bronchitis--he can go maybe to a Choice 
doctor, and certainly if he needs specialty, he has the option 
to go to any VA facility he wants. We just want it as seamless 
for the veteran.
    And I guess my question was, are we slowly obtaining that 
goal?
    Mr. de Planque. I think right now it is a little early and 
that is why in terms of making an analysis of what utilization 
of the program is, and I understand that the secretary stated 
before that, you know, it wasn't so much about what the 
utilization was right now, he was kind of trying to give a 
warning light that they might need to reappropriate things.
    For us, you know, it is a little bit early to make any 
decisions about that because people are just starting to get 
their feet wet with the program, but it is something that I 
know we are, and I know that all the other groups up here are 
watching very closely to see how this interacts and how this 
works----
    Mr. Abraham. Okay. Thank you.
    I am out of time. I just wanted to get ya'lls take. Thank 
you.
    The Chairman. Mr. O'Rourke.
    Mr. O'Rourke. Thank you, Mr. Chairman.
    Mr. Violante pointed this out earlier, that the secretary 
and his team are here, and I really appreciate you saying that. 
I just want to make sure that it is noted for the record, 
because if we are going to be successful in this team approach, 
it is going to take all of us literally being in the same room 
and listening to each other. So I thought that was important 
that you pointed it out.
    I wanted to ask you, any person at the table to respond to 
this, that the secretary also mentioned working collaboratively 
in terms of how we build and offer medical care, beyond this 
question of the Choice Act. An example that we talked about 
last week in a hearing was this hospital in Aurora, Colorado, 
you know, $604 million now to $1.1 billion, originally supposed 
to be affiliated with an academic institution. That affiliation 
is broken. I couldn't help but get the sense that veterans in 
that area and perhaps VSOs were insistent that that be flagged 
solely as a VA facility, and that might have had some cost and 
some consequences to that.
    What is your openness or what are your thoughts on this 
idea of working collaboratively and involving other non-VA 
institutions in the provision of healthcare or the development 
of facilities or organizing how we deliver that healthcare in a 
community like El Paso where I don't know that we need a 
hospital--I don't know that we are going to get a $1.1 billion 
facility, so we may have to work collaboratively. So, if I 
could start with you, Mr. Violante and work rightwards down the 
table, I would love to get your response.
    Mr. Violante. Sure. We have mixed feelings. I mean we have 
seen other facilities, particularly DoD facilities where VA and 
DoD have gone in together and sometimes there are problems 
because the troops that are stationed there get deployed and 
then the services really start lacking. But I think some of the 
facilities up in Great Lakes may be working fine with a federal 
VA kind of emphasis, so it just depends on the area and how it 
is structured.
    Mr. Kelley. We have to look at every option. We have to 
look at building standalone VA hospitals. We need to look at 
public-private partnerships. We need to look at 
intergovernmental partnerships. We just have to. It has to be 
right-sized and the services need to be in place for veterans. 
And so every avenue, not just with university hospital 
partnerships, but with county hospitals, with city hospitals. I 
think that as they start planning what they are going to 
replace for their need, if there is room for VA at that same 
campus and it is purchased, it is a co-purchase, it is co-
owned, and services are interoperable, then it is a smart move.
    Mr. O'Rourke. To include, you mentioned city, county. To 
include private sector, potentially, if there is a capacity and 
expertise and a center of excellence in a particular area where 
there is a gap in VA care?
    Mr. Kelley. Absolutely.
    Mr. O'Rourke. Great.
    Mr. Blake.
    Mr. Blake. I think it would be unreasonable to think that 
they shouldn't take advantage of affiliate opportunities and 
partnerships if it maximizes opportunity for healthcare. That 
being said, you mentioned Aurora, you know, part of the problem 
with that over the years was figuring out--I can remember a 
time when the vision for that was sort of a joint facility that 
had a mix of veteran patients and non-veteran patients, 
civilian patients, and you ran into challenges with something 
as simple as, you know, identification of two. And then you got 
into more complicated issues with like governance and priority 
of access and service.
    And so you have to be careful when you get into that sort 
of concept. The Denver issue is clearly--you know, I think it 
is even more unique than the problems that existed in Las Vegas 
and New Orleans that are still going on and Orlando. The Denver 
project has been going on for 20-plus years now and if nothing 
else, veterans are being unsatisfied there because there are 
many promises that have been made and still no access to 
healthcare there and that is a clearly under-served population.
    Mr. O'Rourke. Thank you.
    Mr. de Planque. I think it clearly is a team sport. I 
think, clearly, it is a country that takes care of veterans, 
and we have certainly seen in the past, teaching hospitals 
working in conjunction with VA facilities and I think there are 
some great partnerships that can be achieved there. Obviously, 
the VA has to be the core of that and the taking care of 
veterans. There is a reason that a lot of our veterans like to 
go to the VA and that is because it is something that 
understands them.
    But at the same time, if they are going to be innovative, 
if they are going to be leading the way, like I was saying, you 
know, the leading authorities on TBI, PTSD, et cetera, that is 
beginning to involve partnerships. That is going to involve 
finding the best people out there, and I think it is absolutely 
within their grasp to be able to do that.
    Mr. O'Rourke. Thank you.
    Mr. Chair, could I have 30 seconds for Ms. Zumatto to 
answer? Thank you.
    Ms. Zumatto. Thank you.
    I would say that while VA certainly has many fine doctors 
and experts, they don't corner the market. There are lots of 
people in the civilian community who could bring new ideas, 
research and other possibilities. So to say that we shouldn't 
be considering public-private partnerships I think would be a 
serious mistake.
    Mr. O'Rourke. Thank you.
    Thank you all for your answers and for your work.
    The Chairman. Thank you very much.
    Ms. Brown, do you have additional comments or questions?
    Ms. Brown. No, sir.
    Thank you very much for this hearing.
    The Chairman. Thank you very much for being here. Thank you 
for presenting the Independent Budget; we appreciate that. 
Expect questions to the second panel post-hearing questions and 
to the first panel. There are some issues that we were not able 
to bring up, given the time.
    But, Mr. Secretary, thank you, sir, for staying through the 
entire budget hearing, and with that, I request that all 
Members have five legislative days with which to revise and 
extend their remarks.
    Without objection, so ordered.
    This hearing is adjourned.
    [Whereupon, at 1:12 p.m., the committee was adjourned.]

                                APPENDIX

               Prepared Statement of Chairman Jeff Miller

    Good morning. This hearing will come to order. We are here to 
discuss the President's Fiscal Year 2016 budget request for the 
Department of Veterans Affairs (VA). Mr. Secretary, welcome. I 
understand that your testimony will be a bit different than what the 
Committee is accustomed to, with references to charts to help us better 
understand what you're seeing in terms of the challenges ahead. That's 
a welcome change. So, too, is the openness that you have had with me, 
Members of this Committee and the Congress about your plans to change 
the culture at VA.
    As your testimony illustrates you've been extremely active in 
visiting VA facilities, talking with employees, veterans groups, and 
your private sector colleagues with one aim in mind . . . putting 
everyone's focus squarely on the needs of veterans. Thank you for your 
willingness to take the job of Secretary, and thank you for putting 
everything you have in to it.
    Turning now to the business of examining the VA budget request, I 
see some very positive things but also some areas with considerable 
question marks. The Committee's task will be to learn as much as 
possible in order to inform our ``Views and Estimates'' letter to the 
Budget Committee due next Friday.
    On the positive side, Mr. Secretary, you have boldly tackled the 
sensitive issue of VA's aging infrastructure. Coupled with a more 
realistic budget request for VA's major construction program, 
addressing the closure of unsafe, vacant, or underutilized facilities 
begins an important conversation about the future alignment of VA's 
infrastructure. I have long argued that we needed a strategic 
reassessment of VA's construction program. That is, in part, what the 
independent assessment and the Veterans Healthcare Commission, 
established in last summer's Choice Act, were tasked with examining. 
You have my commitment to work with you as this conversation begins in 
earnest.
    I do have several areas of concern that I hope that you and our 
second panel can address.
    First, and I will be frank, the proposal to reallocate any portion 
of the $10 Billion appropriated for the Veterans Choice Program is a 
non-starter. I understand there is a great degree of uncertainty about 
the program's utilization. In appropriating the money, the Congress had 
to work with the best estimates we had at the time to stretch those 
dollars, including limiting eligibility criteria for veterans. If there 
is to be any reallocation it will be to further improve and strengthen 
the program itself and not to address other, unspecified needs.
    Second, the budget requests an additional $1.3 billion for VA 
medical care on top of the advance appropriation for Fiscal Year 2016, 
bringing the total proposed increase to 7.4%. At a threshold level, I 
do not understand how this request interacts with the $15 Billion 
Congress provided last summer for non-VA care and infrastructure as 
part of the Veterans Access, Choice and Accountability Act. It would 
appear that there are considerable unknown variables in this area, such 
as the degree to which the Choice Program alleviates workload and 
resource pressure on VA, the productivity standards VA should expect 
from its clinical workforce, and the ability for VA to hire medical 
professionals in the face of an already large vacancy rate and a 
national shortage of healthcare professionals. I hope to expand on this 
a bit more in questioning.
    Third, I note the 6.5% increase for the Veterans Benefits 
Administration, principally to hire additional staff to address the 
workload. Mr. Secretary, there are several of us on the Committee who 
have a long memory on this issue. We know that disability claim 
staffing has doubled in 10 years and nearly tripled since when I first 
arrived in Congress. We've invested over a half-a-billion dollars in 
the VBMS system and millions more in other systems. And we've provided 
tools to encourage veterans to file fully- developed claims which, in 
turn, enables a quicker decision.
    All of these investments were made with the promise that 
productivity would markedly improve and shift the department away from 
the usual trend of relying on an ever-increasing workforce and overtime 
to deal with the workload. Although I note the production improvement 
in the backlog over the last two years, it is a far cry from seeing 
individual worker productivity improve given the resources that have 
already been provided. Again, this is another area I hope to address in 
questioning.
    Finally, a big lesson learned last year is that veterans are better 
served with constant and aggressive oversight. Ms. Brown and I have 
asked for a larger Committee budget toward that end. I believe the 
Office of Inspector General, too, needs more than a .3% increase. The 
proposed amount is not even enough to cover inflationary costs, let 
alone the increased oversight we all rely so heavily upon.
    Again, I look forward to hearing your testimony, Mr. Secretary. I 
also look forward to hearing the views of our VSO panel. The VA system 
is for them and those they represent, so their input on budgetary 
matters is critical to inform the Committee and the Congress on VA's 
budget request.

                                 

          Prepared Statement of Ranking Member Corrine Brown,

    Thank you, Mr. Chairman.
    Secretary McDonald, I want to welcome you this morning. I look 
forward to hearing how this budget request will meet the needs of our 
veterans.
    The President has proposed a large increase for VA. For FY 2016 the 
President has proposed nearly an 8 percent increase in funding for VA 
health care, personnel, construction, research, and claims processors.
    Given this large request, I look forward to our discussion today, 
and how it will assist our work as a Committee to make sure that this 
proposed budget gives you the dollars you need, but also assures us 
here in Congress that every dollar you receive will be spent wisely.
    I certainly wish that my bill, H.R. 216, the Department of Veterans 
Affairs Budget Planning Reform Act of 2015, was the law of the land. It 
is an important tool to assist us, and you, in matching resources to 
the needs of our veterans and ensuring we are planning for the future 
to make sure we don't let down our veterans.
    Mr. Secretary, the first question I will ask is does your proposed 
budget give you all the dollars you need to fix the problems you face, 
meet the goals of the initiatives the Department has laid out?
    Keeping in mind the funding provided by the Choice Act, I hope that 
we can discuss whether you have enough resources to ensure that 
veterans do not face intolerable delays in getting access to health 
care. I hope we can discuss how you are looking down the road to ensure 
that veterans have access to VA care in the future.
    I always hear from my veterans how the prefer VA care when it is 
available--I hope that we are going to all work together to make sure 
that this health care our veterans prefer is available to them when 
they need it.
    This is the first year that VA benefit programs are to be funded 
under advance appropriations. Now veterans won't have to worry as much 
if we here in Congress can't do our job.
    Finally, I want to hear about your reform and reorganization 
efforts, and how this budget request will support these efforts. I also 
want to hear about how you are making progress in your efforts to 
reform and reinvigorate the VA.
    Too often, all we hear about is the problems VA is having--I would 
like us to also consider what we can do to fix these problems and to 
point out what VA is getting right.
    I am pleased with this budget request, and hope that these dollars 
can fix what is wrong and strengthen what is right with the VA.
    Thank you Mr. Chairman and I yield back the balance of my time.
    
    
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