[Senate Hearing 111-]
[From the U.S. Government Publishing Office]



 
   MILITARY CONSTRUCTION AND VETERANS AFFAIRS, AND RELATED AGENCIES 
                  APPROPRIATIONS FOR FISCAL YEAR 2010

                              ----------                              


                        THURSDAY, JUNE 11, 2009

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 1:30 p.m., in room SD-124, Dirksen 
Senate Office Building, Hon. Tim Johnson (chairman) presiding.
    Present: Senators Johnson, Murray, Reed, Nelson, Pryor, 
Hutchison, and Murkowski.

                     DEPARTMENT OF VETERANS AFFAIRS

STATEMENT OF HON. ERIC K. SHINSEKI, SECRETARY
ACCOMPANIED BY:
        GERALD M. CROSS, MD, FAAFP, ACTING UNDER SECRETARY FOR HEALTH
        PATRICK W. DUNNE, UNDER SECRETARY FOR BENEFITS
        STEVE L. MURO, ACTING UNDER SECRETARY FOR MEMORIAL AFFAIRS
        RITA A. REED, ACTING ASSISTANT SECRETARY FOR MANAGEMENT
        ROGER W. BAKER, ASSISTANT SECRETARY FOR INFORMATION AND 
            TECHNOLOGY

                OPENING STATEMENT OF SENATOR TIM JOHNSON

    Senator Johnson. The meeting will come to order. I welcome 
Secretary Shinseki and those accompanying him to the 
subcommittee. The leadership has announced that there will be a 
conference meeting regarding the supplemental at 3 o'clock, so 
we had to start this hearing early. I want to thank the 
secretary for accommodating this change. We are going to have 
to compress the hearing today, so I would like to waive all 
opening statements from members and go straight to the 
secretary's testimony. This will allow more time for senators 
to ask questions. The secretary's statement will be made part 
of the record as any member wishing to submit theirs. I request 
that our members limit their questions to 6 minutes. Again, 
thank you Secretary Shinseki for appearing before the committee 
today.
    Senator Hutchison, do you have any comments you would like 
to make?
    Senator Hutchison. Mr. Chairman, let's go forward. I think 
you're right to try to compress the hearing.
    Senator Johnson. Secretary, you may proceed.

                     STATEMENT OF ERIC K. SHINSEKI

    Secretary Shinseki. Thank you Chairman Johnson, Ranking 
Member Hutchison, other distinguished members of the committee. 
Thank you as always for this opportunity to discuss the 
President's budget for the Department of Veterans Affairs.
    I'm pleased to be joined today by VA's senior leadership, 
and I'd like to take a few seconds just to introduce them. 
Beginning on my far left Under Secretary Pat Dunne, who takes 
care of our benefits administration. Next to me is Acting 
Assistant Secretary for Health, Dr. Gerald Cross. To my right 
Acting Assistant Secretary for Management, Rita Reed. To her 
right Acting Under Secretary for Memorial Affairs, Steve Muro, 
and then to the far right Assistant Secretary for Information 
and Technology, Roger Baker.
    Let me also acknowledge the presence of leaders of our 
veterans service organizations in the audience today. We, in 
fact, are partners as advocates for our Nation's veterans.
    In my short tenure as Secretary, every Member of Congress 
who has welcomed me back to Government has almost in the same 
breath asked me to do more, better, faster for our veterans 
longstanding needs that they face and need help on. I guess I 
would tell you that your individual and your collective 
devotion to our veterans is clear to me from my visits with 
you. Clear, comprehensive, and unwavering. And so, Mr. 
Chairman, to you and the members of this committee I want to 
express upfront my thanks for your support of VA, first to care 
for those veterans, and most especially for the generous 
appropriations in some years past when budgets were lean. You 
ensured that we were able to meet mission for those veterans.

                           PREPARED STATEMENT

    Veterans are our sole reason for existence. In today's 
challenging economic environment we must be diligent stewards 
of every dollar if we are to deliver timely, high quality 
benefits and services to the men and women we serve. The growth 
in funding for fiscal year 2010 is significant, I will say that 
upfront. We accept the responsibility for being accountable and 
showing measurable returns on this investment that we've been 
entrusted with. I will do everything possible to ensure the 
funds Congress appropriates will be used to improve the quality 
of life for veterans and the efficiency of our operations. So 
with those comments, Mr. Chairman, thank you for this 
opportunity, and I look forward to your questions.
    [The statement follows:]

              Prepared Statement of Hon. Eric K. Shinseki

    Mr. Chairman, Senator Hutchison, distinguished members of the 
Committee: Thank you for this opportunity to present the President's 
2010 budget for the Department of Veterans Affairs (VA). The 
President's vision for the Department is to transform VA into a 21st 
Century organization that is Veteran-centric, results-driven, and 
forward-looking. This transformation is demanded by new times, new 
technologies, new demographic realities, and new commitments to today's 
Veterans. It requires a comprehensive review of the fundamentals in 
every line of operation the Department performs.
    VA's budget request for 2010 provides the resources for this 
transformation that will take more than one year to complete. It 
provides the resources to move the Department closer to achieving the 
President's vision for VA, and will help ensure that Veterans--our 
clients--receive timely access to the highest quality benefits and 
services we can provide and which they earned through their sacrifice 
and service to our Nation.
    Some have complained that, in the past, VA has been seen as 
difficult and bureaucratic in providing for our Nation's Veterans. 
Change requires strong leadership amidst finite resources to improve 
access, quality, safety, timeliness, and advocacy for the care and 
services we provide to our Veterans. This is not about nibbling around 
the edges of change.
    The President's budget request for 2010 provides the Department 
with resources needed to become a 21st Century organization as the 
Department's leadership develops further the individual investments 
currently in the Budget to better align with evolving Departmental 
priorities.
    The President has requested that I do two things--first, transform 
VA into a 21st Century organization, and second, to ensure that we 
approach Veterans care as a lifetime initiative, from the day the oath 
is taken until they are laid to rest. With this budget, the 
transformation begins.
    At present, the budget request contains four major categories of 
transformational activity collectively designed to initiate the process 
of creating a 21st Century VA. These transformational initiatives 
include creating a reliable management infrastructure, delivering 
ongoing services, making progress on Departmental priorities, and 
instituting important new initiatives to meet the needs of Veterans 
today and tomorrow.
    VA's request for 2010 is nearly $113 billion--an increase of over 
$15 billion, or 15.5 percent, from the 2009 enacted budget. This is the 
largest 1-year percent increase for VA requested by a President in over 
30 years.
    I would like to take this opportunity to highlight how this budget 
will help VA begin the transformation in these four areas.
    First, Management Infrastructure. In order to transform VA, we must 
begin with ourselves. Transformation must start within our own doors. 
VA will create a reliable management infrastructure that expands or 
enhances corporate transparency at VA, centralizes leadership and 
decentralizes execution, invests in leader training, and focuses on 
research and development on 21st Century requirements. This 
infrastructure also is a key to dramatically improved client services 
and enhanced responsiveness to the needs of Veterans and all VA 
stakeholders. Examples include increasing investment in training and 
career development for the VA career civil service; improving capacity 
to manage IT services and major programs; employing a suitable 
financial management system to track expenditures; and achieving 
significant realignment of VA's acquisition processes for improved 
transparency of and accountability for spending across the VA.
    Second, delivering and maintaining ongoing services. Transformation 
does not mean throwing out the baby with the bath water. What it does 
mean is that we must identify the things that work best and improve 
upon them. Some of the services that we can improve upon, and must 
improve upon, are our ongoing services provided to Veterans on a daily 
basis, such as care for polytrauma, substance abuse, mental health, and 
preventive health care. Such activities include access to the highest 
quality care, delivered at best-in-class facilities, and powered by 
excellence in medical research. These also encompass fair, consistent, 
and rapid processing of benefits claims, memorial services that honor 
service to the Nation, and evolving needs, such as rural care and 
outreach, care for homeless Veterans, Veterans' families, and women's 
health care.
    Third, the 2010 budget will provide VA with sufficient resources to 
continue to make progress on Departmental priorities. VA will assess 
and revitalize core programs that have already been recognized by the 
VA and Congress as important to improving quality and access to 
services for Veterans. These programs provide access for additional 
Priority 8 Veterans; improve interoperability and coordination between 
the Department of Defense (DOD) and VA; increase investment in mental 
health and telemedicine; and continue the development and 
implementation of the Post-9/11 GI Bill. Progress on these initiatives, 
begun in 2009, will be sustained in 2010 to ensure that VA follows 
through on its existing commitments.
    Lastly, transformation is about making bold moves to introduce 
entirely new concepts of best business practices that lead the 
organization into the 21st Century. The fiscal year 2010 budget request 
will enable new approaches to meet emerging needs that change the way 
VA serves Veterans. The on-going work of the VA's Transformation Task 
Force will further inform the development of these elements. And while 
these four areas of transformation represent the opportunities 
presented by the 2010 budget, below are specific examples to 
demonstrate how these funds will help our Veterans thorough their 
entire service lifetime, beginning at the day they take their oath.

  THE TRANSFORMATION FROM WITHIN--INCREASING INVESTMENT IN TRAINING, 
          CAREER DEVELOPMENT AND OTHER ORGANIZATIONAL REFORMS

    In order to transform VA, we must begin with a commitment to 
critically assess ourselves. Transformation must start within our own 
doors. The transformation of VA will require many organizational 
reforms to better unify the Department's efforts on behalf of Veterans. 
These will take time and may even result in up-front costs within our 
overall budget, but all are designed to save taxpayer dollars over time 
while ensuring VA successfully accomplishes its mission. Lastly, where 
we can save costs to our Veterans, without impacting quality of care, 
or diminishing our core mission, we will be sound stewards of the 
taxpayer dollar. Some of these key reforms are presented below.
Increasing Investment in Training and Career Development
    The 2010 budget will help ensure that VA's workforce will remain 
leaders and standard-setters in their fields. The Department will 
continue to grow and retain a skilled, motivated, and client-oriented 
workforce. Training and development (including a leader development 
program), communications and team building, and continuous learning 
will all be components of reaching this objective.

Establishing an Office of Analysis and Evaluation
    The Department will establish an office with robust program 
analysis and evaluation capability. This office will conduct in-depth 
reviews of VA programs and operations, and will assess their return on 
investment. These independent evaluations will help inform program and 
budget decision-making.

Enabling Improved Communications
    The Department will invest in a virtual forum and related services 
to enable better communications with Veterans, Veterans Service 
Organizations, Congress, and other government agencies.
Implementing Management Control Systems for Acquisitions
    This initiative will allow VA to gather and use information to 
assist senior leadership in steering the Department toward its 
strategic objectives. This will involve allocating resources, 
motivating employee behavior, and evaluating performance.

Improving Medical Collections
    The Department expects to receive nearly $2.9 billion from medical 
collections in 2010. About $8 of every $10 in extra collections will 
come from increased third-party insurance payments, with the vast bulk 
of the remaining collections growth resulting from rising pharmacy 
workload. The 2010 budget supports the establishment of additional 
consolidated patient account centers (CPACs) that help maximize the 
efficiency and effectiveness of VA's medical collections program 
through standardized processes, accountability for results, improved 
decision support capabilities, and more stringent internal controls. 
The implementation of six more centers from 2009 to 2011 will generate 
approximately $1.7 billion in additional revenue during the next 
decade.
    In addition to investing in VA to provide the best quality of care 
to our Veterans, we are rededicating ourselves to improving our VA 
infrastructure, construction and logistics, to provide Veterans with 
the comfort in knowing that they will always have a place to go to seek 
their care that they can call their own.

NEW CONSTRUCTION AND FUNDING THE NEW OFFICE OF THE ASSISTANT SECRETARY 
              FOR ACQUISITION, CONSTRUCTION, AND LOGISTICS

Establishment of a New Office of Acquisition, Construction, and 
        Logistics
    The President's 2010 budget request is so firmly committed to this 
goal, that it includes funding for the establishment of a new Office of 
the Assistant Secretary for Acquisition, Construction, and Logistics. 
The necessity of this new office is highlighted by the $1.921 billion 
in capital funding for VA in the 2010 budget. Our request for 
appropriated funds includes $1.194 billion for major construction 
projects, $600 million for minor construction, $85 million in grants 
for the construction of State extended care facilities, and $42 million 
in grants for the construction of State Veterans cemeteries.
    The 2010 request for construction funding for our health care 
programs is $1.584 billion--$1.077 billion for major construction and 
$507 million for minor construction. All of these resources will be 
used to further renovate and modernize VA's health care infrastructure, 
provide greater access to high-quality care for more Veterans, closer 
to where they live, and help resolve patient safety issues.
  --Major Construction Initiatives. Within our request for major 
        construction are resources to continue five medical facility 
        projects already underway:
    --Orlando, Florida ($371.3 million)--complete a new medical center 
            consisting of a hospital, medical clinic, community living 
            center, domiciliary, and full support services;
    --Denver, Colorado ($119.0 million)--replacement medical center on 
            the same campus as the University of Colorado Hospital 
            complex in Aurora, consisting of an inpatient medical 
            center, spinal cord injury and community living center, and 
            research building;
    --Bay Pines, Florida ($96.8 million)--inpatient and outpatient 
            facility improvements;
    --San Juan, Puerto Rico ($42.0 million)--seismic corrections to the 
            main hospital building; and
    --St. Louis, Missouri ($19.7 million)--medical facility 
            improvements and cemetery expansion at Jefferson Barracks.
  --New Facilities. Major construction funding is also provided to 
        begin seven new medical facility projects:
    --Livermore, California ($55.4 million)--design and land purchase 
            for new community-based outpatient clinic in East Bay, 
            expanded community-based outpatient clinic and new 
            community living center in the Central Valley, and 
            minimally invasive procedure center at the Palo Alto VA 
            Medical Center;
    --St. Louis, Missouri ($43.3 million)--design new inpatient bed 
            tower, emergent response unit, spinal cord injury beds, 
            intensive care unit beds, and clinical expansion at the 
            John Cochran Division;
    --Canandaigua, New York ($36.6 million)--design new community 
            living center and new domiciliary/residential 
            rehabilitation facility;
    --Long Beach, California ($24.2 million)--design new mental health 
            center and community living center;
    --Brockton, Massachusetts ($24.0 million)--design new long-term 
            care spinal cord injury unit;
    --San Diego, California ($18.3 million)--design new spinal cord 
            injury building and renovations to provide a community 
            living center and hospice unit; and
    --Perry Point, Maryland ($9.0 million)--design new community living 
            center.
  --Minor construction.
    Minor Construction is an integral component of our overall capital 
program. In support of the medical care and medical research programs, 
minor construction funds permit VA to realign critical services; make 
seismic corrections; improve patient safety; enhance access to health 
care; increase capacity for dental care; enhance patient privacy; 
improve treatment of special emphasis programs; and expand research 
capability. Further, minor construction resources will be used to 
comply with energy efficiency and sustainability design requirements.
    We are requesting $162.9 million in construction funding to support 
the Department's burial program--$112.2 million for major construction 
and $50.7 million for minor construction. Within the funding we are 
requesting for major construction are resources for gravesite expansion 
and cemetery improvement projects at two national cemeteries--Abraham 
Lincoln ($38.3 million) and Houston ($35.0 million).
    VA is requesting $25.5 million for land acquisition in the major 
construction account. These funds will be used to purchase land as it 
becomes available in order to quickly take advantage of opportunities 
to ensure the continuation of a national cemetery presence in areas 
currently being served. All land purchased from this account will be 
contiguous to an existing national cemetery, within an existing service 
area, or in a location that will serve the same Veteran population 
center.
    VA's commitment to our clients does not end at building a world-
class, 21st Century Veterans healthcare and benefits organization. We 
also have an obligation to ensure that America never forgets their 
sacrifices. The 2010 Budget assures that the legacy of honoring our 
Veterans continues.
    Although the foundation of transformation is laid first internally, 
by focusing on our own transformation within the walls of VA, at the 
end of day, we are judged by our performance, not our promises. The 
President has charged VA with providing for our Veterans for their 
entire lifetime. The President's 2010 Budget allows VA to focus on this 
continuity of care earlier than ever before.

                      ONE LIFE CONTINUITY OF CARE

    One of VA's highest priorities is to ensure that active and Reserve 
component Veterans returning from service in Operation Enduring Freedom 
and Operation Iraqi Freedom receive everything they need to 
effortlessly make their transition from active military service to 
civilian life. The Department will take all measures necessary to 
provide them with timely benefits and services, to give them complete 
information about the benefits they have earned through their military 
service, and to implement streamlined processes that simplify their 
interactions with VA.

Early Transition Initiatives
    The most effective way to ensure servicemembers receive continuous 
care from military service to civilian life is to begin the transition 
process at the time they are sworn in for active duty. VA will continue 
to collaborate with DOD to facilitate the transition of military 
personnel into civilian status through a uniform approach of both 
registering into VA and accessing electronic records data. This will 
involve the development and implementation of a Joint Virtual Lifetime 
Electronic Record that will contain both administrative and medical 
information, resulting in improved delivery of benefits and assuring 
the availability of medical data to support the care of patients shared 
by VA and DOD. This will be achieved while maintaining the privacy and 
security of servicemembers' and Veterans' personal information.

Developing and New Partnerships with DOD
    The Department will continue to partner with DOD to establish and 
administer programs to support this continuity of care, including 
participation in demobilization events, the Yellow Ribbon Reintegration 
Program, the Center of Excellence in Psychological Health and Traumatic 
Brain Injury, and others. Our facility-to-facility collaborations 
foster improved care coordination and delivery at the local level and I 
will continue to work with Secretary Gates to ensure this continuum of 
care is supported and addressed at the highest levels. To this end, I 
am establishing a new VA/DOD Collaboration Office with dedicated 
staffing to support our efforts at the Departmental level.
    As our Veterans move from DOD to VA as their principal care 
provider, we must ensure that we are poised to address their specific 
needs. This requires that VA look at the most effective ways to meet 
the needs of this latest generation of Veterans. We will strive not to 
repeat the mistakes of the past, and ensure that once Veterans are 
fully under our care, we are poised to deliver the specialty health 
care and services that they need and that this budget will provide.

Meeting Emerging Needs of All Veterans Across All Generations
    In addition to this newest generation of veterans, we must ensure 
that the budget addresses the needs of all Veterans, across all 
emerging demographics. This includes funding initiatives for women 
Veterans, the growing elderly population of Veterans, and Veterans 
living in rural areas. VA's request for 2010 provides the resources 
required to treat nearly 6.1 million patients as they enter our system 
of care. This is 474,000 (or 9 percent) above the patient total in 2008 
and is 122,000 (or 2 percent) higher than the projected number in 2009.

Advance Appropriations for VA Medical Care
    The President and I share the concern that the care our Veterans 
receive should never be hindered by budget delays. The Administration 
plans to work with the Congress to develop a specific advance 
appropriations proposal for the VA Medical Care program.
        funding care for a new and changing veteran demographic

Meeting the Medical Needs of Women Veterans
    The 2010 budget provides $183 million to meet the gender-specific 
health care needs of women Veterans, an increase of $15 million (or 9 
percent) over the 2009 resource level. The delivery of enhanced primary 
care for women Veterans is one of VA's top priorities. The number of 
women Veterans is growing rapidly and these women are increasingly 
reliant upon VA for their health care. More than 450,000 women Veterans 
have enrolled for care and this number is expected to grow by 30 
percent in the next five years. We will soon have 144 full-time Women 
Veterans Program Managers serving at VA medical facilities. They will 
function as advisors to and advocates for women Veterans to help ensure 
their care is provided with the appropriate level of privacy and 
sensitivity.

Expanding Care for Veterans in Rural Areas
    The Department appreciates the additional resources provided by 
Congress for rural health care initiatives. Using some of these 2009 
funds as well as additional resources we are requesting in 2010, VA's 
budget includes $440 million to implement the President's initiative to 
continue improving access to medical care for Veterans in rural and 
highly rural areas, including use of rural health resource centers, 
mobile clinics, rural health consultants, and outreach. VA will also 
continue to expand its telehealth program which is the largest of its 
kind in the world. Where appropriate, the Department will provide fee-
basis access to mental health professionals when VA services are not 
reasonably close to Veterans' homes.

Emerging Elder and Long-term Care
    VA's budget for 2010 contains more than $5.9 billion for long-term 
care, a rise of $663 million (or 13 percent) over the 2009 resource 
level. About 60 percent of the additional resources will support 
institutional care while 40 percent will be devoted to expanding non-
institutional long-term care services. We anticipate increased demand 
for long-term care services resulting from severe injuries, such as TBI 
and polytrauma.
    The Department's 2010 request includes $1.2 billion for non-
institutional long-term care, an increase of $265 million (or 28 
percent) over 2009. By enhancing Veterans' access to non-institutional 
long-term care, VA can provide extended care services to Veterans in a 
more clinically appropriate setting, closer to where they live and in 
the comfort and familiar settings of their homes. These services 
include adult day health care, home-based primary care, purchased 
skilled home health care, homemaker and home health aide services, home 
respite and hospice care, and community residential care. During 2010 
we will increase the number of patients receiving non-institutional 
long-term care, as measured by the average daily census, to nearly 
91,000. This represents a 25 percent rise above the level we expect to 
reach in 2009.

Funding Care for Newly Qualified Veterans (Priority 8)
    Building on the resources provided by Congress in 2009 for VA to 
begin a gradual expansion of health care eligibility for non-service-
disabled Veterans earning modest incomes (Priority 8 Veterans), the 
President's Budget includes funds to expand eligibility to this group 
for the first time since 2003. This year, VA will open enrollment to 
Priority 8 Veterans whose incomes exceed last year's geographic and VA 
means-test thresholds by no more than 10 percent. We estimate that 
266,000 more Veterans will enroll for care by the end of 2010 due to 
this policy change. Furthermore, the budget includes a gradual 
expansion of health care eligibility which will enable over 500,000 
Veterans who were previously not eligible for VA medical care to enroll 
by 2013. This expansion of health care eligibility will be accomplished 
while improving the timeliness of care and maintaining the quality of 
VA health care that already sets the national standard of excellence.

Funding Care for OEF/OIF Veterans
    The number of patients who served in Operations Enduring Freedom 
and Iraqi Freedom will rise to over 419,000 in 2010. This is 61 percent 
higher than in 2008 and 15 percent above the projected total this year. 
In 2010 we are requesting $2.1 billion to meet the health care needs of 
Veterans who served in Iraq and Afghanistan. This is an increase of 
$463 million (or 29 percent) over our medical resource requirements to 
care for these Veterans in 2009. The treatment of this newest 
generation of Veterans has allowed us to focus on and improve treatment 
for PTSD as well as TBI, including new programs to reach our Veterans 
at the very earliest stages of these conditions.
     enhancing outreach and services for mental health care and tbi
    VA's 2010 budget includes nearly $4.6 billion for mental health 
care, an increase of $288 million, or 7 percent, above the 2009 
resource level. These resources will allow the Department to expand 
inpatient, residential, and outpatient mental health programs. A key 
element of VA's program expansion is integrating mental health services 
with primary and specialty care. Veterans receive better health care 
when their mental and physical needs are addressed in a coordinated and 
holistic manner.

PTSD and TBI Commitments
    This budget allows us to continue our effort to improve access to 
mental health services across the country. We will continue to place 
particular emphasis on providing care to those suffering from post-
traumatic stress disorder (PTSD) as a result of their service in 
Operations Enduring Freedom and Iraqi Freedom. The Department will 
increase outreach to these Veterans as well as provide enhanced 
readjustment and PTSD services. Our strategy for improving access 
includes expanding our tele-mental health program, which allows us to 
reach thousands of additional mental health patients annually, 
particularly those living in rural areas.
    To better meet the health care needs of recently discharged 
Veterans, the 2010 budget enables VA to expand its screening program 
for depression, PTSD, TBI, and substance use disorders. The Department 
will also enhance its suicide prevention advertising campaign to raise 
awareness among Veterans and their families of the services available 
to them.
    VA's 2010 budget contains $298 million for the care of Veterans 
with TBI, an increase of $41 million (or 16 percent) over the 2009 
resource level. TBI and polytrauma are serious conditions that Veterans 
injured as a result of their service in Operations Enduring Freedom and 
Iraqi Freedom experience, and we must find even more ways to address 
their needs. While VA's Polytrauma System of Care is unique in its 
expertise and capabilities, we are learning more every day about 
effective treatments. The additional resources in 2010 will help ensure 
these Veterans receive the specialized care they require.

Investments in New Vet Centers to Address Unique Mental Health 
        Challenges of Combat
    In 2010, VA will open 28 new Vet Centers providing readjustment 
counseling services to Veterans, including those suffering from PTSD. 
The Department will also improve access to mental health services 
through our community-based outpatient clinics. Where appropriate, we 
will provide fee-basis access to mental health providers when VA 
services are not reasonably close to Veterans' homes. We will also 
expand use of Internet-based mental health services through 
``MyHealtheVet,'' which provides an extensive degree of health 
information to Veterans electronically. These steps are critical to 
providing care to Veterans living in rural areas.
    In addition to identifying and funding care for the evolving 
Veteran demographic, VA must commit adequate resources to addressing 
the needs of today's Veteran, and that can only be accomplished with 
adequate funding for research. The President's 2010 budget allows us to 
commit dramatically increased resources to research.

  INCREASING INVESTMENTS IN RESEARCH AND OTHER HEALTH CARE INITIATIVES

    The 2010 budget provides $580 million for medical and prosthetic 
research, an increase of $70 million (or 14 percent) over the 2009 
resource level. Our request will fund nearly 2,400 high-priority 
research projects to expand knowledge in areas critical to Veterans' 
health care needs, most notably in the areas of mental illness ($74 
million), aging ($51 million), acute and traumatic injury ($46 
million), military occupations and environmental exposures ($43 
million), and cancer ($41 million).

Groundbreaking Research Initiatives
    Some of this research will focus on TBI and polytrauma, including 
studies on blast force-related brain injuries, enhancing diagnostic 
techniques, and improving prosthetics. We will strengthen our burn 
injury research to improve the rehabilitation and daily lives of 
Veterans who have suffered burns. VA will also enhance research on 
chronic pain, which afflicts approximately two of every five recently 
discharged and enrolled Veterans. And the Department will also advance 
research on access to care, particularly for Veterans in rural areas, 
by studying new tele-medicine efforts focused on mental health and 
PTSD.
    One of our highest priorities in 2010 will be to continue our 
aggressive research program aimed at improving the lives of Veterans 
returning from service in Operations Enduring Freedom and Iraqi 
Freedom. The President's budget request for VA contains $299 million 
devoted to research projects focused specifically on Veterans returning 
from service in Afghanistan and Iraq, an increase of $20 million (or 7 
percent) over the 2009 resource level. The new research initiatives 
will focus on post-deployment mental health, spinal cord injury, 
sensory loss, TBI and other neurotrauma, and pain.
    The President's request for research funding will help VA sustain 
its long track record of success in conducting research projects that 
lead to clinically useful interventions that improve the health and 
quality of life for Veterans and the general population. Recent 
examples of VA research results that have direct application to 
improved clinical care include the successful use of tele-medicine to 
improve Veterans' mental health status, quality of life, and 
satisfaction with care; better understanding the specific factors 
leading to the development of osteoporosis; delineating the critical 
brain structures involved in components of learning and memory that are 
important for improving care for Veterans with brain injury and memory 
disorders; improving treatment for Veterans suffering from the combined 
effects of hepatitis C and depression; and utilizing deep-brain 
stimulation to improve the quality of life for patients suffering from 
advanced Parkinson's disease.
    The 2010 budget for medical care provides funds for VA to 
strengthen its focus on critical ongoing programs and new initiatives 
that will improve care and clinical outcomes for Veterans. Certain new 
initiatives that support overall transformation include:

Patient Centered Care
    The Veterans Health Administration (VHA) will deploy a patient-
centric care model called Veteran Centered Care, based on best 
practices in private sector health care, which will result in a fully 
engaged prevention partnership between Veteran, family, and health care 
team, established through healing relationships and provided in optimal 
healing environments in order to improve health outcomes and the 
Veteran's experience of care.

Medical Home and Care Coordination
    The patient centered medical home is a team based model of care 
that provides continuous, first contact, comprehensive care to maximize 
health and functionality. The model focuses on preventive health care 
and emphasizes a holistic approach that addresses the medical, 
psychological, and social needs of the patient. These teams consist of 
medical professionals, mental health providers including behaviorists, 
nurses, nutritionists, and care coordinators. These models can be 
adapted to meet the specific needs of unique patient populations such 
as those with advanced heart disease.

Leveraging Technology in Health Care Services
    As part of our continued operation and improvement of the 
Department's electronic health record system, VA is seeking $360 
million for development and implementation of the Veterans Health 
Information Systems and Technology Architecture (HealtheVet) program. 
Facets of the program have already received national accolades as a 
model for improving online accessibility of health records. This is $47 
million (or 15 percent) above the estimated resource commitment for 
this key project in 2009. HealtheVet will equip our health care 
providers with the modern technology and tools they need to improve the 
safety and quality of care for Veterans.
    Until HealtheVet is operational, we need to maintain the VistA 
legacy system. This system will remain operational as new applications 
are developed and implemented. This approach will mitigate transition 
and migration risks associated with the move to the new architecture. 
Our budget provides $116 million in 2010 for the VistA legacy system.

Health Care Spending Summary
    In total, the President's 2010 request includes total budgetary 
resources of $47.4 billion for VA medical care, an increase of $4.6 
billion (or 11 percent) over the 2009 resource level (which excludes $1 
billion for non-recurring maintenance projects, including renewable 
energy and efficiency projects, supported through resources from the 
American Recovery and Reinvestment Act). Our total medical care request 
is comprised of funding for medical services ($34.7 billion), medical 
support and compliance ($5.1 billion), medical facilities ($4.7 
billion), and resources from medical care collections ($2.9 billion).
    As we focus on the new medical care services and delivery 
mechanisms needed to transform VA care, we must ensure that we do not 
repeat the mistakes of the past, and disassociate the injuries from the 
full social and economic impacts of those left untreated, or whom we 
simply cannot reach. This budget allows us to address some of the 
social and economic impacts that we cannot address with health care 
alone, such as addressing homelessness and providing other economic 
benefits.

                         COMBATING HOMELESSNESS

    The President has committed to expanding proven programs and 
launching innovative services to prevent Veterans from falling into 
homelessness. The 2010 budget provides more than $3.2 billion for 
homeless Veterans programs. This includes $2.7 billion to furnish 
health care to homeless Veterans and $500 million for other programs 
providing supportive services, which help to break the cycle of 
homelessness among the estimated 131,000 Veterans who are homeless on 
any single night.

Joint Initiatives
    The budget provides $26 million for VA to work with the Departments 
of Housing and Urban Development, Labor, Education, Health and Human 
Services, and the Small Business Administration, in partnership with 
non-profit organizations, to reduce homelessness. This pilot project 
coordinates VA's efforts with programs of partner agencies and non-
profits to target Veterans who are most at risk of becoming homeless. 
It aims to maintain stable housing for Veterans while continuing to 
provide them with support services and ongoing medical care.
    In addition, this historic budget allows us to set our Veterans up 
for success well into the future by investing now in their education 
and in the future financial stability of America by educating the next 
greatest generation of Veterans.
   automating the application for and delivery of education benefits
    The Department is on target to implement the Post-9/11 Veterans 
Educational Assistance Act starting August 1, 2009, and began signing 
up Veterans online for this program on May 1, 2009. VA is pursuing two 
parallel strategies to successfully implement this new education 
program, both of which are fully supported by the resources presented 
in the 2010 budget.

Short Term Strategy
    The short-term strategy relies upon a combination of traditional 
claims processing and modifications to existing IT systems. Until a 
modern eligibility and payment system can be developed, VA will 
adjudicate claims manually and use the existing Benefits Delivery 
Network to generate benefit payments to schools and program 
participants. This budget includes funds to hire and maintain the 
additional staff required.

Long Term Strategy
    The long-term strategy is the development and implementation of an 
automated system for claims processing. The Department has teamed with 
the Space and Naval Warfare Systems Command to address the necessary IT 
components of this strategy. They are the premier systems engineering 
command for the Department of the Navy. The automated solution will be 
available by the end of calendar year 2010, by which time full 
operational control of the automated system will be in VA's hands.

Dramatic Increase in the Number of Educational Beneficiaries
    As a result of the Post-9/11 Veterans Educational Assistance Act, 
we expect the number of education claims to rise dramatically. We 
anticipate in excess of 2 million education claims in 2010, a total 8 
percent higher than the number we projected for 2009 and 25 percent 
above the 2008 total. Despite this significant growth in workload, the 
resources provided in the President's 2010 budget will allow us to 
maintain our program performance for two key measures. The timeliness 
of processing original education claims will be at least as good as the 
level (24 days) we estimated for 2009, while the average time it takes 
to process supplemental claims will be no higher than the estimated 
level (10 days) for 2009.
    Of import, this program will invest in knowledge and education for 
our latest generation of Veterans.

          PROVIDING ADDITIONAL ECONOMIC STABILITY TO VETERANS

Providing Greater Benefits to Veterans Who Are Medically Retired from 
        Service
    In addition, the President's 2010 budget provides for the first 
time concurrent receipt of disability benefits from VA in addition to 
DOD retirement benefits for disabled Veterans who are medically retired 
from service. Presently, only Veterans with at least 20 years of 
service, who have service-connected disabilities rated 50 percent or 
higher by VA, are eligible for concurrent receipt. Receipt of both VA 
and DOD benefits, for all who were medically retired from service, will 
be phased in starting in 2010. The estimated VA costs in 2010 are $47 
million.

Improving Compensation and Pensions
    A major challenge in improving the delivery of compensation and 
pension benefits is the steady and sizeable increase in workload. The 
volume of claims receipts is projected to reach 972,000 in 2010--a 5 
percent rise from the 2009 level and a 23 percent increase since 2005.
    The number of Active Duty service members as well as Reservists and 
National Guard members who have been called to active duty to support 
Operations Enduring Freedom and Iraqi Freedom is one of the key drivers 
of new claims activity. This has contributed to an increase in the 
number of new claims, and we expect this pattern to persist, at least 
for the near term. An additional reason that the number of compensation 
and pension claims is climbing is the Department's commitment to 
increased outreach. We have an obligation to extend our reach as far as 
possible and to spread the word to Veterans about the benefits and 
services VA stands ready to provide.
    Disability compensation claims from Veterans who have previously 
filed a claim comprise about 55 percent of the disability claims 
received by the Department last year. Many Veterans now receiving 
compensation suffer from chronic and progressive conditions, such as 
diabetes, mental illness, cardiovascular disease, orthopedic problems, 
and hearing loss. As these Veterans age and their conditions worsen, VA 
experiences additional claims for increased benefits.

Increasing Number of Beneficiaries Receiving Compensation
    The growing complexity of the claims being filed also contributes 
to our workload challenges. For example, the number of original 
compensation cases with eight or more disabilities claimed increased 
from 43,700 in 2005 to 61,600 in 2008. Nearly 27 percent of all 
original compensation claims received last year contained eight or more 
disability issues. In addition, we expect to continue to receive a 
growing number of complex disability claims resulting from PTSD, TBI, 
environmental and infectious risks, complex combat-related injuries, 
and complications resulting from diabetes. Claims now take more time 
and more resources to adjudicate. Additionally, as VA receives and 
adjudicates more claims, a larger number of appeals are filed from 
Veterans and survivors, which also increases workload in other parts of 
the Department, including the Board of Veterans' Appeals and the Office 
of the General Counsel.

Addressing Innovative Ways to Decrease Waiting Time for Benefits
    VA will address its ever-growing workload challenges in several 
ways. For example, we will enhance our use of IT tools to improve 
claims processing. In particular, our claims processors will have 
greater online access to DOD medical information as more categories of 
DOD's electronic records are made available through the Compensation 
and Pension Records Interchange project. We will also strengthen our 
investment in a paperless claims processing infrastructure, to reduce 
our reliance upon paper-based claims folders and enable accessing and 
transferring electronic images and data through a Web-based 
application. This infrastructure will also dramatically increase the 
security and privacy of Veteran data. The existing Virtual VA 
repository will be sustained until the more robust enterprise paperless 
infrastructure is developed and deployed. The Department will continue 
to move work among regional offices in order to maximize our resources 
and enhance our performance. Also, the Department will demonstrate 
improved timeliness and quality of service resulting from the recent 
expansion of the Benefits Delivery at Discharge program at all regional 
offices, demobilization sites, military installations, and VA health 
care facilities.
    As a result of staffing increases, more efficient claims processes, 
and enhanced use of IT tools, we expect to lower the average number of 
days to complete rating-related compensation and pension claims to 150 
days in 2010. This represents a 29-day improvement (or 16 percent) in 
processing timeliness from 2008 and an 18-day (or 11 percent) reduction 
in the estimated amount of time required to process claims this year.
    In addition, we anticipate that our pending inventory of disability 
claims will fall to about 302,000 by the end of 2010, a reduction of 
more than 78,000 (or 21 percent) from the pending count at the close of 
2008. At the same time we are improving timeliness, we will also 
increase the accuracy of the compensation rating decisions we make, 
from 86 percent in 2008 to 90 percent in 2010.
    As we press to build momentum on our forward leaning initiatives, 
it is with the sense that, every day we stand still, we face 
irrelevancy. The future moves at the pace of the micro-chip processor, 
and we must invest in technology to remain relevant. This budget 
provides a serious down-payment on leveraging technology to transform 
VA into a 21st Century Organization.

    PROCESSING BENEFITS CLAIMS IN A PAPERLESS ENVIRONMENT AND OTHER 
                        CRITICAL IT INVESTMENTS

    Leveraging information technology (IT) is crucial to achieving the 
President's vision for transforming VA into a 21st Century organization 
that meets Veterans' needs. Key concepts of the transformation include 
creating an electronically based benefits system to speed processing 
and address the backlog; integrating service member information from 
DOD with all VA information about a Veteran to create a seamless 
transition from warrior to Veteran; using Customer Relationship 
Management (CRM) techniques to work proactively with Veterans and 
provide them with a view of all of their VA benefits; ensuring 
continued innovation of the award winning Computerized Patient Record 
System and VISTA medical records systems; and creating ``anywhere, 
anytime'' access to VA by developing multiple access channels for 
information and transactions.
    IT is an integral component of VA's health care and benefits 
delivery systems.
    VA depends on a reliable and accessible IT infrastructure, a high-
performing IT workforce, and modernized information systems that are 
flexible enough to meet both existing and emerging service delivery 
requirements. Only in this way can we ensure system-wide information 
security and the privacy of our clients.

Meeting Vital IT Needs
    The President's 2010 budget for VA provides more than $3.3 billion 
to meet these vital IT requirements. This is $559 million (or 20 
percent) above the 2009 resource level (which excludes $50 million made 
available through the American Recovery and Reinvestment Act). Almost 
all of the Recovery Act funds will be used to develop IT solutions 
associated with the implementation of the Post-9/11 Veterans 
Educational Assistance Act.
    The 2010 budget provides $144 million to continue moving toward the 
President's goal of reforming the benefits claims process to make VA's 
claims decisions timely, accurate, and consistent through use of 
automated systems. VA's paperless processing initiative expands on 
current paperless claims processing already in place for some of our 
benefits programs. It will strengthen service to Veterans by providing 
them the capability to apply for and manage their benefits on-line. It 
will also reduce the movement of paper files and further secure 
Veterans' personal information. The initial features of the paperless 
processing initiative will be tested in 2010, and by 2012, we expect to 
implement an electronically based benefits delivery system.

Funding for New Technology
    The Department is requesting $86 million for the Financial and 
Logistics Integrated Technology Enterprise (FLITE) system. This is an 
increase of $38 million (or 78 percent) from the 2009 resource level. 
FLITE is being developed to address a long-standing internal control 
material weakness and will replace an outdated, non-compliant core 
accounting system that is no longer supported by industry.
    We recently completed an in-depth analysis of our patient 
scheduling program. I have directed a similar review of all our major 
IT programs to evaluate program performance against cost and schedule 
milestones. Changes in how we manage IT projects include use of 
standard templates to ensure completeness and consistency of 
development and testing processes, initiation of an IT competency 
assessment, and formation of integrated project teams, such as the 
Post-9/11 GI Bill team to ensure close collaboration between IT and 
education program experts.
    In total, within VA's total IT request for 2010, nearly $2.4 
billion (or 72 percent) will be for IT investment (non-payroll) costs, 
while the remaining $939 million (or 28 percent) will provide for 
payroll and administrative requirements.

Benefits Spending Summary
    In summary, the Department's 2010 resource request for General 
Operating Expenses (GOE) is just over $2.2 billion. Within this total 
GOE funding request, more than $1.8 billion is for the management of 
the following non-medical benefits administered by the Veterans 
Benefits Administration (VBA)--disability compensation; pensions; 
education; vocational rehabilitation and employment; home loan 
guaranty; and insurance. Our request for GOE funding also includes $394 
million to support General Administration activities.
    Funding for VBA in 2010 will be $364 million (or 25 percent) higher 
than the 2009 resource level (which excludes $157 million from the 
American Recovery and Reinvestment Act). Almost all of the resources 
provided to VBA through the Recovery Act will be used to hire 1,500 
additional staff to support the processing of compensation and pension 
claims; 500 of these will be permanent employees who will replace staff 
losses through attrition while the other 1,000 will be temporary 
employees hired under term appointments. The temporary employees will 
conduct follow-up actions to expedite claims development and perform 
other administrative activities to free up claims decision-makers to 
handle more complex claims processing tasks.

  SERVICE TO THE LAST BREATH AND BEYOND--FUNDING THE MEMORIALS TO OUR 
                                 HEROES

    The President has charged me with caring for our Veterans until 
they take their last breath. The VA's commitment, however extends 
beyond the last solemn ceremony and last note of Taps. We are committed 
to continuing the memories of our heroes with the dignity and respect 
they deserve. The Recovery Act funds available to the National Cemetery 
Administration (NCA) will be used for national shrine projects, energy 
projects, monument/memorial repairs and other non-recurring maintenance 
activities, and equipment purchases.

Increasing Memorial Services
    The resources requested for 2010 will allow us to meet the growing 
workload at existing cemeteries by increasing funding for contract 
maintenance, supplies, and equipment, continuing the activation of new 
national cemeteries, and maintaining our cemeteries as national 
shrines. VA expects to perform 111,500 interments in 2010, or 4 percent 
above the estimate for this year. The number of developed acres (8,015) 
that must be maintained in 2010 is 3 percent greater than the 2009 
estimate.

Improving Memorial Services
    Our budget request includes an additional $1.6 million to continue 
daily operations and to begin interment activities at the last three of 
the six new national cemeteries established by the National Cemetery 
Expansion Act of 2003. Burial operations at Bakersfield National 
Cemetery in California, Alabama National Cemetery in the Birmingham 
area, and Washington Crossing National Cemetery in southeastern 
Pennsylvania are expected to begin by the end of calendar year 2009.

Expanding Memorial Services and Access for Veterans
    The President's resource request for VA provides $38 million in 
cemetery operations and maintenance funding to address gravesite 
renovations as well as headstone and marker realignment. When combined 
with another $26 million in minor construction, $2 million in non-
recurring maintenance, and $1 million for monument and memorial 
preservation, VA is requesting a total of $67 million in 2010 to 
improve the appearance of our national cemeteries which will help us 
maintain cemeteries as shrines dedicated to preserving our nation's 
history and honoring Veterans' service and sacrifice.
    With the resources requested to support NCA activities, we will 
expand access to our burial program by increasing the share of Veterans 
served by a burial option within 75 miles of their residence to 90 
percent in 2010. This is 3.1 percentage points above our expected 
performance level for 2009.
    In addition, we will maintain the level of service to our clients 
that resulted in VA's national cemetery system receiving the highest 
rating in customer satisfaction for any Federal agency or private 
sector corporation ever surveyed as part of the American Customer 
Satisfaction Index (95 out of a possible 100 points). We expect that 98 
percent of our survey respondents in 2010 will rate the quality of 
service provided by national cemeteries as excellent and 99 percent of 
survey respondents will rate the appearance of national cemeteries as 
excellent. These performance levels will reinforce that the 
Department's cemetery system is a model of excellence in providing 
timely, accessible, and high-quality service to Veterans and their 
families.

Memorial Spending Summary
    The President's 2010 budget request for VA includes $242 million in 
operations and maintenance funding for the NCA. This is $12 million (or 
5 percent) above the 2009 resource level (which excludes $50 million 
provided through the American Recovery and Reinvestment Act).

                                SUMMARY

    At the end of the day, none of these reforms can be implemented by 
money alone without investments in our own internal growth and 
development. As a people-centric organization, investments in training 
recruiting, and educating the best workforce for our Veterans will take 
a priority in my tenure as the Secretary of the Department of Veterans 
Affairs. If we make those investments, and commit to true 
organizational change, we will succeed, if we do not, we will fall 
short of major transform.

                                CLOSING

    Veterans are VA's sole reason for existence and my number one 
priority. In today's challenging fiscal and economic environment, we 
must be diligent stewards of every dollar and apply them wisely to 
deliver timely, high-quality benefits and services to Veterans whom we 
serve. While we recognize the growth in funding that we are requesting 
in 2010 is significant, we also acknowledge the responsibility, 
accountability, and importance of showing measurable returns on that 
investment. You have my pledge that I will do everything possible to 
ensure that the funds Congress appropriates to VA will be used to 
improve both the quality of life for Veterans and the efficiency of our 
operations.
    Organizational transformation is a challenging task that requires 
changes in culture, systems, and training. This will require resources, 
but it will also demand commitment and teamwork. The entire Department 
is dedicated to serving the needs of Veterans in the 21st Century and 
every VA employee has a stake in transformation to meet those needs.
    Leadership will continually assess and re-assess the necessary 
funding resources for transformation. It should be expected that these 
bold new initiatives will result in adjustments to the budget request 
within the 2010 topline during the next several months. The results of 
this ongoing management decision-making process--in partnership with 
the Congress--will be a budget that starts the VA down a path toward 
becoming a model for 21st Century governance.
    I am confident that Congress and VA can work together to achieve a 
common goal on Veterans.

    Senator Johnson. Mr. Secretary, as you know, we are likely 
to provide advance appropriations for fiscal year 2011 medical 
care. We will need to know very quickly what the VA's estimates 
for 2011 are if we are to include them in this year's bill. 
When do you expect to be able to give this committee an fiscal 
year 2011 estimate for the medical care accounts?
    Secretary Shinseki. Mr. Chairman, I am, in fact, in 
meetings with OMB as I was preparing to come over here to do 
just that. I hope to have some numbers this week that I would 
like to share with you as soon as those negotiations are 
complete.
    Senator Johnson. Mr. Secretary, I was pleased to see that 
the VA has requested $250 million in the fiscal year 2010 
budget to continue the Rural Health Initiative that was started 
in 2009. How do you plan to use the funding requested in the 
fiscal year 2010 budget?
    Secretary Shinseki. Well, Mr. Chairman, actually as it 
turns out, the $250 million that was provided to us in 2009 
about $90 million of that will actually be executed, and so 
there will be a carryover of about $190 million. So in 2010 we 
are looking at a $440 million set of funds to disperse. We will 
be looking at mobile rural health clinics, and four pilot 
sites, outreach clinics, three regional rural health resource 
centers, and a host of other initiatives pilot as well as 
programs put into place that I'd be very happy to provide you 
some more detail on for the record.
    Senator Johnson. What process do you have to evaluate the 
success of projects funded under this initiative?
    Dr. Cross. Sir, for our projects we have built in an 
evaluation component to make sure that from the very beginning 
we collect data to ensure that over time we can tell if the 
project is successful.
    We're doing some very innovative work in this rural health 
initiative. Some of them may not turn out to be successful. We 
want to know that, and we want to discontinue those and focus 
on the ones that are. So we decided to build that into the 
program from the very beginning, capture the data, monitor it 
closely, and then make some decisions over time as to what 
really works best.
    Senator Johnson. Secretary Shinseki, the VA has requested 
an increase of more than a half billion dollars for IT. How 
much of this increase is for staffing and administrative 
expenses, and how much is for system development?
    Secretary Shinseki. Mr. Chairman, I'm going to let Mr. 
Baker pick up on that initially, and I'll play clean up to him.
    Mr. Baker. Thank you, sir.
    There are substantial staffing increases in that increase, 
primarily in the field working in the hospitals and the 
regional offices providing customer support to the 
administrations and their efforts to work with the veterans. 
There's $182 million according to my sheet here for staffing 
increases. Again, primarily in the field as well as increases 
for key items like interoperability with the Department of 
Defense from an information standpoint, the FLITE Financial 
System so that we have good strong financial management, and 
increases in medical IT and benefits IT, both to support staff 
increases in those areas, and to support improvements in the 
process of speed of response, network speed, those sort of 
things. Again, most of the increases aimed at supporting the 
folks in the field doing the real work, working with the 
veterans.
    Senator Johnson. This past year the VA has had to put the 
replacement of the scheduling system on hold due to failures in 
the development process. This is very disappointing to say the 
least. What are your plans to improve the way IT systems are 
developed to ensure that we don't repeat this failure, and how 
do you plan to improve oversight of development projects?
    Secretary Shinseki. Mr. Chairman, I don't think there's 
anybody more disappointed in the fact that we had to put in 
place a strategic pause with the scheduling replacement project 
than I was. We have put in place a set of procedures that are 
going to govern us going forward, everything from oversight 
boards to how we set projects up for success. I'll let Mr. 
Baker, Assistant Secretary Baker talk about the details of 
that, but what I've asked that we do is to go through and look 
at every program that we have in our IT projects, and subject 
them all to the same level of scrutiny that we've just gone 
through with scheduling, and out of which we have gotten 
significant learning on how to do this better.
    Mr. Baker. Thank you, sir.
    We are looking at a substantial change in the way that we 
manage information technology programs at Veterans Affairs, and 
plan on briefing your staff on the details of this in the 
coming week.
    We've reviewed approximately 282 ongoing development 
programs at the department, and that initial review was on 
analyzing certain aspects such as were they on schedule, were 
they on budget, did they have sufficient staff to complete the 
project successfully. Although it's preliminary, the results of 
that review is fairly clear that we need a substantial change. 
And as I said, we will bring that forward next week, but we 
have to make certain that we implement for our programs clear 
decision criteria, better control of the programs, decreased 
infusion of new requirements in the middle of the program, 
clear participation of the internal customer that will be 
receiving the new system, and the success of the program, clear 
attention from the vendor that's working on this and their 
participation and success, and most fundamentally important we 
need to increase the probability of success for these programs. 
We do not have a good track record now as Secretary Shinseki 
said. It is one of the first things that I felt I needed to 
focus on, and it will be one of the first things that we bring 
forward to tell you about how we're going to fix that problem.
    Senator Johnson. Time is running out but I want to raise 
the issues of problems in the coordination between the VA and 
the Indian Health Service. Mr. Secretary as you get settled in 
at the VA, I want to work with you to see how coordination can 
be improved.
    Senator Hutchison.
    Senator Hutchison. Thank you, Mr. Chairman. Mr. Chairman, I 
would just say to the Secretary and the Assistant Secretary 
that I too am very concerned about the IT situation, so I would 
like to ask that we have a report back to the committee on what 
you are doing, both in the management governance structure, 
which was mentioned in the Inspector General's report, and also 
the project management plan for the implementation of the 
subprojects, just the whole thing obviously needs to be pretty 
much turned upside down I think. So I'm hoping that you would 
report back to us specifically on that. I know you're aware of 
it, so that's something we would look at.
    And then I want to say I'm very pleased that we are doing 
so much in the areas of research and mental health. I do 
believe that the Veterans Administration is giving the proper 
emphasis on mental health now, and also medical research, and I 
hope, General Shinseki that we will be able to work the 
problems out with the gulf war syndrome research so, that can 
go forward. It's mid-process, and I think it is very important 
that we continue that research.
    Secretary Shinseki. Senator, I just want to assure you we 
are in dialogue. It's my interest that this goes forward, and 
we have some technical contract details here to work out, and I 
think with cooperation on both sides we can get there.
    I just want to reinforce for you that we have 
significantly, we've invested in mental illness, mental health 
issues with dollars this year and 2010, and I'm comfortable 
we're doing more and better in terms of TBI and the 
relationship with poly-trauma, other aspects of the mental 
health portfolio.
    Senator Hutchison. I'm very pleased about the investment 
that you're going to make in the fifth poly-trauma center in 
our country that will be in the veteran's facility that's 
already a great one, but I think this will add so much in San 
Antonio.
    I wanted to ask you about another issue, and that is the 
transfers from the medical services account. Since fiscal year 
2005, Congress has provided more than $12 billion above the 
Department's request, much of which has gone into our medical 
services accounts. However, during the last 3 fiscal years the 
Department has requested significant transfers out of that 
account into other accounts that the VA has chosen. In fiscal 
year 2008 it was $1 billion out of medical services. In fiscal 
year 2009, the Department submitted $260 million request less 
than 2 months into the fiscal year. And I guess my concern is 
that this sort of undermines the appropriations process where 
we want to know that the money we're putting in is being used, 
and this year the Department is requesting $3.7 billion more in 
medical services. So my question would be are you satisfied 
that $3.7 billion increase is needed for medical services and 
will be used for medical services, and can you tell the 
committee that we will not be seeing transfers out of that 
account into other accounts outside of our process?
    Secretary Shinseki. The amount of money going into medical 
services is needed, Senator. I would like to assure the 
committee that I will do everything possible not to have to 
come up with another request for funds transfer. I think in 5 
months I've been able to get to the bottom of most of the 
issues that I needed to be educated on. This one regarding 
funds transfers out of medical services into the IT account has 
a history that goes back probably a couple of years ago when we 
centralized IT and we took all these assets from various 
places. We didn't clean up the accounts and ensure that funding 
was aligned with it. I'm comfortable that we have done a better 
job this year, and I do not intend to request funds transfer 
again this year, but I still have some things to discover.
    Senator Hutchison. Thank you, Mr. Secretary. One more 
question, and that is I had written you this year after meeting 
a veteran in a wheelchair in Houston, Texas and he had been 
able to acquire a service dog through private donations, and I 
wrote you a letter and said that this is an authorization that 
you have for veterans, especially veterans in spinal cord 
injuries, not blindness related but spinal cord injury related. 
And the service dogs apparently are very helpful in maneuvering 
these people and helping them. My question--you had written me 
back, and you had said that you would look into it, and I just 
wondered if there was any report about the capability of 
providing service dogs for this particular type of injury.
    Dr. Cross. Yes, ma'am. At the direction of the Secretary we 
have looked at this closely. We're moving forward. The key 
thing that we're doing at this time is developing a directive 
that describes what the requirements would be, what the scope 
of the program would be. We're even putting information in when 
we do this, and when we put the directive out we'll put out 
information on our website relative to this as well as to guide 
dogs, which, of course, we've been using for decades very 
successfully. And so there is work underway on this. It's 
moving forward through the staffing and evaluation process 
right now, but progress is being made in that regard.
    Senator Hutchison. Okay.
    Secretary Shinseki. Senator, I owe you a response that 
describes the program, and I will do that.
    Senator Hutchison. Okay.
    Secretary Shinseki. We've just begun the preliminaries to 
see what a requirement is, what it takes to train a dog to that 
standard, and how do we ensure that the patient to whom we've 
assigned the dog is capable of caring for the dog as well as 
being cared for by the dog, so we have some details to work 
out. I think there's good experience here. We ought to be able 
to put a program together.
    Senator Hutchison. Okay. I understand that would be 
certainly something that would have to be flushed out because 
it's a new type of help, but I appreciate your looking into it, 
and we'll look forward to hearing more from you. Thank you very 
much.
    Thank you, Mr. Chairman.
    Senator Johnson. Senator Nelson.
    Senator Nelson. Thank you, Mr. Chairman, and thank you Mr. 
Secretary for being here today, and for the courtesy of our 
visit earlier this year. Congratulations. Thanks to all of your 
colleagues who are here as well.
    As we've discussed, I've worked with past Secretaries to 
highlight the deterioration and infrastructure deficiencies 
that the current Omaha VA Medical Center, and while you and 
your staff have been very helpful to us year after year in the 
past, VA personnel have told me that Omaha didn't meet a 
certain priority in one area, and then told me the next year 
that it didn't meet criteria in another area, and so I was 
frustrated to see this year that 11 facilities freshly appeared 
as higher priorities than Omaha in the President's budget. And 
one reason is that Midwest facilities do not have access to 32 
out of the 100 possible points used for scoring VA construction 
projects because they don't have special emphasis or seismic 
risk. We do have earthquakes in Nebraska. Just recently we had 
one in the northern part, but here we are in a race to the goal 
line, but we seem stopped at the 32 yard line. And so Secretary 
Peek last year commissioned a study of the Omaha VA's 
deficiencies, and apparently the review was completed but the 
report as you mentioned is not available to you as of right 
now. Can you tell me what consideration will be given to that 
report, and how the findings might be used to correct any 
problems?
    Secretary Shinseki. Senator, I understand that the report 
has just arrived in the VA. I haven't had a chance to look at 
it. I've got people vetting it.
    Senator Nelson. Uh-huh.
    Secretary Shinseki. I understand that there is a series of 
criteria for scoring and that results in a standing of various 
projects. I have an appreciation for why those criteria. I 
mentioned that the seismic criteria is there because in our 
case several years ago a catastrophic failure of one of our 
hospitals left a number of people killed and injured, so it has 
been introduced since 2000 or shortly thereafter. What I can't 
explain today is why it carries the weighting it does in 
relation to others. I'd like to do that. I'd like to get in 
there and study it for myself, understand it and I'd like get 
your insights and share with you what I've learned as we look 
at the project list.
    Senator Nelson. I appreciate that, and I'll be looking 
forward to getting together.
    Maybe you can help me with this. Have the Department 
personnel decided that last year's rankings were inaccurate, or 
should we see the budgets, the President's budget and 
understand that the VA facility needs have changed dramatically 
from last year? You may not be able to answer that either until 
you've had the report, but to see 10 or more facilities jump 
ahead on the basis of last year's report is cause for some 
concern. It seems like either the playing field is not quite 
level with the criteria, or that it's certainly tilted a 
different way. So I'm anxious to get your response on that.
    Secretary Shinseki. I'll be happy to respond.
    Senator Nelson. And I really am frustrated in that 
prioritization model that seismic risks rank higher than the 
entirety of the facility's actual condition, and whether it's a 
specialized center of excellence, which is again located in 
population centers, is worth nearly double the condition of the 
facility. So I hope that as you review the report you will also 
perhaps deal with the question of who really should develop the 
criteria, and with the question of whether Congress needs to 
have some responsibility here for approving at least reviewing 
and/or approving the criteria because it does seem to raise 
serious questions of fairness and consistency. If you can't 
know what the criteria are going to be next year because it 
changed since last year, I don't know how you can plan ahead 
with your facility. So I look forward to working with you. I 
know that you will do an excellent job of reviewing the report 
and we'll have that chance to sit down and go through that.
    Secretary Shinseki. Thank you, Senator.
    Senator Nelson. Thank you, Mr. Chairman.
    Senator Johnson. Senator Murkowski.
    Senator Murkowski. Thank you, Mr. Chairman.
    Mr. Secretary, I want to thank you for the time that you 
spent with me in my office several weeks ago. I appreciated the 
conversation, and just the very good discussion that we had. I 
also am pleased to report, I don't know if you are aware but 
the vacant decision review officer position that we had talked 
about has now been filed, so we greatly appreciate that, and 
we're looking forward to moving with that.
    During the visit that we had in late May, we spent a fair 
amount of time talking about the challenges that Alaska 
veterans who live off the road system, who live in the bush in 
the very rural areas, the challenges that they have in 
accessing their VA healthcare benefits, and we talked about 
those who are diagnosed with PTSD really having to dip into 
their own pockets $1,000 for an airplane ticket to get into 
town to visit a counselor and the concerns. At that time we 
discussed the scope of the problem, and I'm sure that within 
this short time period you have not, you haven't figured out 
the solutions to it, and I can appreciate that but I guess I 
just want the assurance that you recognize that we have a 
problem and a situation that is more than a bit unique up 
there, and that you and your staff are working to help us as we 
try to help those veterans.
    Secretary Shinseki. Senator, as I said earlier in my 
opening comments, and as I indicated to you in your office, 
caring for veterans is our primary mission, that's veterans 
wherever they live. I also mentioned that geography in the 
United States by definitions used in the VA have three 
categories. There are urban, rural, highly rural, and then I'm 
not sure what category we use for those areas where there are 
no roads and you can't get into them. I know that's a part of 
the geography you're dealing with.
    I've asked our VHA to start thinking about how we take care 
of veterans in those areas, and let me just ask Dr. Cross to 
provide just some insight, some of which will seek out 
partnerships with the tribal healthcare program.
    Dr. Cross. Senator, I think it's fair to say that we need 
to adapt our services to meet the environment that they're 
provided in, and to meet the needs of those veterans. I think 
certainly the Alaska environment provides unique challenges for 
us, so we have to be especially innovative. I notice that some 
of the things that we're doing in our rural health initiatives, 
and some of the things that we were doing anyway I think will 
be of some benefit in this direction. Specifically in regard to 
the kind of things what we now call outreach clinics, very 
small clinics that we can adapt to small, more rural 
environments as I believe that we're putting in Juneau, and I 
think we're working on one for Homer as well. Also, the new C 
Block in--correct me on my pronunciation, Mat-Su?
    Senator Murkowski. Yes.
    Dr. Cross. Mostly we have to look at other things, and that 
means where the individual can receive the service, perhaps 
without traveling at all. And that's where I think the total 
health initiatives come in to play very much because without 
regard to weather, without regard to location, we can make 
those work in more environments even where there are no roads 
perhaps. Also, just getting the kind of service so the 
individual does not have to come see us, so our mechanism to 
provide medication by mail or through other delivery mechanisms 
so they don't have to actually come and visit the pharmacy I 
think is uniquely beneficial in that environment. I think we 
have much to learn and much to be innovative, much innovation 
to bring forward in regard to our veterans in Alaska, and I 
look toward to working on that.
    Senator Murkowski. I appreciate that, not only your 
comments but, Mr. Secretary, your acknowledgment that perhaps 
we need to look at Alaska as a unique and different situation, 
a different set of facts, and we need to be a little more 
creative, a little more nimble in how we approach, how we 
deliver these benefits because our veterans should not be 
denied benefits just because of where they chose to live. We 
want to work with you on that. I would extend the offer again 
to come up to Alaska and see for yourselves. We have been doing 
some great things within the IHS system, and we'd like to see 
how we can integrate that within the VA.
    You mention some of the opportunities for pilots. When we 
spoke, Mr. Secretary, we talked about the rural healthcare 
pilot, which was supposed to roll out on the first of June, it 
hasn't rolled out yet. I understand it's going to be coming out 
on the 11th, but I had written to you expressed some concerns 
about some of the things that we didn't see in that. There was 
a lack of involvement with the provider community, exclusion of 
southeast Alaska, and exclusion of behavioral health from the 
pilot. I know that is something that you are looking at to 
address those concerns. I don't know if you have any update at 
this point in time, but when we look to the pilots I think it 
is important that we're making sure that this is not just 
something that somebody has thought of back in their office, 
whether it's in Anchorage or Seattle, or back here in 
Washington, but they're actually working within those local 
communities, within those regions to make them work. If you 
care to comment on that I'd appreciate it, but again I extend 
that offer to come north and work with us up there as well.
    Secretary Shinseki. I'm happy to visit in the summertime, 
Senator.
    Senator Murkowski. He has already said he has no interest 
to come up in the winter, I don't understand.
    Secretary Shinseki. But before then we'll be sure to get to 
these issues.
    Senator Murkowski. Thank you. I appreciate it.
    Thank you, Mr. Chairman.
    Senator Johnson. Senator Reed.
    Senator Reed. Thank you very much, Mr. Chairman. Thank you, 
Mr. Secretary and ladies and gentlemen, and thank you Mr. 
Secretary for your visit to the Providence VA. It was a 
wonderful trip, and it shows your commitment to our veterans, 
and your constant effort to get out and walk the front lines, 
so I thank you for that. That's something that you've done for 
a long, long time, sir.
    Let me focus just a moment on veterans homelessness. I'll 
say parenthetically I had the occasion to have supper along 
with colleagues, along with Admiral Mullen the chairman, and we 
spent a long, long time talking about this because as someone 
who is responsible for these young men and women in uniform, he 
feels a continuing responsibility to the veterans who have 
fought and served, and too many are on the streets. In the 
fiscal year 2009 funding bill, there was an inclusion of $10 
million for a demonstration program under HUD to prevent 
homelessness among veterans, and HUD was directed to be the 
leader on the project, but to coordinate with the Veterans 
Administration and Labor Department. I simply want to hear from 
you or your colleagues whether this coordination is ongoing, 
what might be the status of the project.
    Secretary Shinseki. Senator, it's ongoing. In fact, the 
number of vouchers have been doubled with Secretary Donovan's 
assistance out of HUD, so that program continues. He and I have 
sat on a committee, coalition that deals with homelessness. 
This is something that he and I are both working in conjunction 
with other department heads. We've described homelessness as 
sort of the last step in opportunities to solve some problems, 
and so we do have this one and we are linking it to other 
actions that have to do with healthcare, substance abuse, 
mental health, jobs, education, all the things that could 
interrupt the cycle.
    Senator Reed. As always, sir, you've anticipated my next 
question which is in the fiscal year 2010 budget the President 
has requested $26 million for the VA to work in partnership 
with HUD, Labor, Education, HHS, Small Business and nonprofits 
to reduce homelessness. You will be in charge of that for the 
Veterans Administration, is that the way the concept is?
    Secretary Shinseki. That's my contribution to the work 
effort, and I know that other departments have money set aside 
to work.
    Senator Reed. In terms of the structure, you know, the 
chairman of the board if you will, will that be you, Mr. 
Secretary?
    Secretary Shinseki. It's about to change. I am the current 
chair, and it's about to turn over to Secretary Donovan, and so 
between the two of us we will continue working on the 
committee.
    Senator Reed. You will be, I presume given the nature of 
the agency, trying to leverage both VA programs, and HUD 
programs, and other programs--that's the whole essence of it.
    Secretary Shinseki. Right.
    Senator Reed. Let me do this, let me invite you to, and 
your colleagues to give us any ideas you believe that are 
necessary to further reduce the problem of veterans 
homelessness. Again, we could stand here and make long 
speeches, we all could, about what a remarkable shame it is to 
have men and women who serve with distinction now not finding a 
place. In fact, Admiral Mullen was talking about young veterans 
of Iraq and Afghanistan in their 20's in California who are 
essentially homeless.
    Secretary Shinseki. Right.
    Senator Reed. So this is something we've got to do, and I 
want to work with you and I'm sure all my colleagues do and the 
chairman to address this issue.
    Secretary Shinseki. Senator, I would tell you that about 6 
years ago the number of homeless veterans on the streets was 
about 195,000; 200,000. Today it's 131,000 and a year after, 
they've been taken off the street, put through our program of 
18 months to two years, and then a year after they graduate 
with pretty good results on being employed, and living 
independently. 131,000--I just spoke to a gathering of the 
coalition here a couple weeks ago, and I said five years at 
zero, we're moving to zero now. I'm not naive, I know there are 
no absolutes here, and I know that there will be, you know, 
more homeless veterans generated in the meantime, but my sense 
is if I didn't put zero as a target, we'd be somehow far off, 
further off the mark rather than giving it our best efforts. 
That hasn't been cleared by the folks who look at budgets yet, 
so I'm a little out ahead of them, but that's the intent.
    Senator Reed. I thought that was Chairman Hutchison and 
Johnson. I thought those were the ones.
    Secretary Shinseki. I just had to qualify my statement.
    Senator Reed. Very good. Thank you, Mr. Secretary.
    Senator Johnson. Senator Pryor.
    Senator Pryor. Thank you, Mr. Chairman. Thank you, Mr. 
Secretary, and thank you for making yourself available to me 
recently. Thank you for changing your schedule.
    Let me ask something that is interesting to me, and 
something you talk about as transforming the VA and changing 
the mindset there, and I think what you're talking about is 
really changing the culture in the VA. Would you give us your 
thoughts on how you plan to go about doing that?
    Secretary Shinseki. Senator, I think changing any large 
organization is pretty challenging, and I think any 
organization that has a long and proud history of contributions 
to the country like the VA has is also challenged to hear 
someone like me come in and talk about change, but I do think 
that looking at where we are, where we need to go that's an 
appropriate time that we talk about transforming ourselves.
    The President has asked us to do this for the 21st century, 
and so we are looking at new approaches and new outcomes for 
the VA, engraining new ways of thinking and acting, practicing 
new ways of working with each other, delivering services better 
than we ever have before.
    This is a work in progress. We're putting together a plan, 
but it talks about changing the climate at the VA, instilling 
in our folks the sense of advocacy for veterans. It's a slight 
change in our approach to our duties, but when you advocate for 
something, you tend to respond differently and you clearly send 
signals that are vastly different to the people, your clients 
that you're serving. So that requires a training program that 
touches all of our civil servants, talks about electronic 
health records that we've committed to upgrading, and along 
with DOD agreed that we're going to create a virtual electronic 
record that will govern youngsters from the time they serve in 
uniform until the time they arrive in our ranks as veterans, to 
the time that we lay them to final rest. A lot of good movement 
in that particular category. The President had both Secretary 
Gates and I stand up with him and announce we were going to do 
it, so we're moving in that direction.
    Centralization oversight of contracting, $13 billion to 
contract in the VA, and it's divided up in a number of 
different areas, and what lacks is synergy, discipline, and 
oversight, and so we're moving to bring that into order.
    Senator Pryor. Can I interrupt here, because I did want to 
ask that specifically.
    Secretary Shinseki. Okay.
    Senator Pryor. You envision that as being a separate office 
within VA where all the purchasing and acquisitions office, how 
is that going to be?
    Secretary Shinseki. Well, I'm looking for authorization, in 
fact, in this budget to establish a new office with an 
Assistant Secretary for Acquisition, Logistics, and 
Construction. We created an office less than a year ago, 
bringing together disparate contracting authorities. What I 
need to do is elevate this to Assistant Secretary level to 
provide the oversight that is needed to get us the efficiencies 
that we need.
    Senator Pryor. One of the concerns there, I think you're on 
the right track, and I like everything you've said, but one of 
the concerns there would be by creating a new office are you 
creating another layer of bureaucracy or another little section 
of the maze there, or are you really cutting through some of 
that and streamlining your operations?
    Secretary Shinseki. The intent is for it to be smaller than 
larger, and it's to bring together assets that are already 
significantly disbursed, and get some efficiency out of it so 
we have discipline and oversight.
    Senator Pryor. Let me ask you about an area that we get 
some complaints on sometimes in our office. As you can imagine 
like a lot of other senators, we have a person in our Little 
Rock office that that's pretty much all they do is work on VA 
cases, and try to help veterans through the system. One of the 
complaints we hear is this kind of a, I guess I'd call it a 
proof of service requirement where often times when a person 
goes in it's up to the veteran to prove that they served, but 
these records could be decades old.
    Secretary Shinseki. Sure.
    Senator Pryor. That can get very, very difficult if not 
impossible. I'm seems to me that between the VA and the DOD we 
would have all, you the Government, we would have all the 
records that we could somehow produce and verify the records if 
we needed to do that. We have those resources and not the 
veterans. Can we talk about that?
    Secretary Shinseki. It's a little bit of--I'm going to turn 
it over to Admiral Dunne here in a bit because he over watches 
our benefits administration, but it's a little bit of what I 
mentioned earlier here about advocacy. If we're advocating for 
veterans, our approach is going to be just different. Another 
aspect of this is the virtual electronic record that both DOD 
and VA have agreed on, and what that means is a youngster puts 
on a uniform, automatically is enrolled in the VA, and 
therefore this search for records at some time later is 
precluded because all those records are, in fact, in place, 
electronically shared, and available when the disability claim 
is initiated. This is a little harder than just talking about 
it, and so we are hard at work with DOD to come to those common 
protocols and let me turn to Admiral Dunne here.
    Admiral Dunne. Senator, in the meantime until we can get 
electronic records, we are first exercising what's considered 
our duty to assist, and so whenever we do get a claim from a 
veteran, we will take on the responsibility to work with DOD 
and track down those records.
    One of the things which we've accomplished recently as a 
result of our collaboration with DOD is to establish points of 
contact at each of the services so that when a regional office 
is trying to find a specific record, and often times the Guard 
and Reserve records are the most difficult ones to find, then 
we can go straight to the relevant service and identify this 
specific record that we need for a veteran, and get their 
assistance in providing it, but we will if there is any record 
or piece of evidence which a veteran needs for their claim, we 
will take on the responsibility of doing the search to find 
their records.
    Senator Pryor. Thank you. Thank you, Mr. Chairman.
    Senator Johnson. Senator Murray.
    Senator Murray. Thank you very much Chairman Johnson and 
Senator Hutchison for having this hearing today. General 
Shinseki welcome, it's good to see you as well, and to all of 
your folks who are working so hard.
    I recently came across a VA report that was called 
``Provision of Primary Care to Women Veterans,'' which 
highlighted a number of problems preventing the highest quality 
of primary care being provided to women veterans in the VA. 
This report found that women veterans are underserved at the 
VA, that primary care delivery for women veterans at the VA is 
fragmented, that women receive lower quality care than their 
male counterparts, that there are an insufficient number of 
clinicians in the VHA with specific training and experience in 
women's health issues, and that the VA's policy for women's 
health is inconsistent.
    While the challenges that are outlined in that report are 
concerning, I do want to commend you, Mr. Secretary, and the 
members of the work group that prepared that report including 
Dr. Patricia Hayes, for really putting together a very thorough 
report on the VA's commitment to providing quality 
comprehensive healthcare for our women veterans. I wanted to 
ask you today can you tell this committee what concrete steps 
the VA is taking now that they have this report to eliminate 
those disparities?
    Secretary Shinseki. I'm going to let Dr. Cross fill in some 
of the details that go to the technical issues, but as we've 
discussed before and as I've indicated, there is a major change 
coming in our population in veterans. In the next 10 years, 15 
percent will be women, and so I am looking for the opportunity 
to put in place programs, to begin putting in place programs 
today that are going to be in place 10 years from now. We just 
need to do that.
    Senator Murray. It is the fastest growing population in the 
VA, so I appreciate that.
    Secretary Shinseki. It is, and a larger percentage of our 
women veterans coming out of OIF/OEF are, in fact, coming to us 
for care, 44 percent of that population. Whatever the 
population overall, the population today of veterans in this 
country is something around 23 million, that will adjust over 
time, but whatever that number is, whether it's 20 million or 
18 million, 15 percent is going to be a huge percentage, and we 
need to do things that, that report is outlining for us as 
corrections that need to be made, and that's part of the reason 
we asked for that report.
    Senator Murray. I'd just like to know what you're doing now 
to address those concerns.
    Dr. Cross. Senator Murray, with your permission I'll 
mention a couple of the things that we're doing, and then I'll 
be frank about a couple of the challenges that I'm concerned 
about. There's a lot going on in regard to advancing the cause 
for women's health within the VA. You certainly know about the 
women's health coordinators, the program managers that we put 
in 143 sites already, and I think I have one site to go, and 
then several more sites where we're going to put points of 
contact as well. You know that we're interested in outreach, 
and so we are concerned that some women have not yet used our 
services or come to see us, so we are making arrangements to--
we did this with the OEF/OIF we set up a contract with someone 
to call OEF/OIF veterans and say how are you doing, can we be 
of any help to you, have you tried the VA, are you aware of our 
services. We're going to do this specifically now for women, 
specifically targeted with information, specifically targeted 
with the type of questions that we ask to engage them. We're 
supporting legislation, or we have testified on this for 
newborn care, the training, the environment of care. Patti and 
I have talked about a program to move that forward, to make 
sure that our environment of care in our primary care clinics 
especially is as well-adapted for privacy and all the needs of 
women veterans.
    Senator Murray. Are you doing one stop primary care visits 
for women veterans at all of our VA facilities?
    Dr. Cross. At each of our primary care sites we want to 
have the capability to provide most of their needs in that 
regard. I think what you're referring to is GYN exams and those 
kinds of things.
    Senator Murray. Correct.
    Dr. Cross. That's where we're going.
    Senator Murray. We're going there. Okay.
    Dr. Cross. I really dislike the idea of you get this 
service at this place, and that service at this place, even if 
it's within the same hospital, particularly if you have to come 
back for another appointment. That's not the design that I'm 
interested in. We looked at quality in regard to women's 
healthcare, and we monitor this very closely. We also compared 
with our civilian sector. There's still a gap, and even in our 
system where cost may not be an issue and we provided even such 
things as flu shots where women don't get them quite as 
frequently as we think they should.
    Senator Murray. Right.
    Dr. Cross. Having said that, we're doing better than our 
civilian colleagues on those same measures. That doesn't give 
me much comfort. I need to do better within our own system, so 
those are the kinds of things that we are pushing forward to 
make a difference in regard to women's healthcare.
    Senator Murray. Okay. Well, I want to continue to work on 
this issue. Senator Hutchison and I and other women senators 
are pushing hard on a women's health bill that we hope to get 
out----
    Senator Hutchison. Yes.
    Senator Murray [continuing]. At some point. And we will 
continue to push you on this, just so you know, and we expect 
to hear progress on a lot of the work, but I'm glad we're 
finally together and focused on it. That is a major step 
forward.
    Mr. Secretary, as you know, State veterans homes are an 
integral part of our VA's long-term care system, and according 
to the GAO they provide more than 50 percent of the VA's 
patient workload in nursing homes. Under current law the VA can 
provide up to 65 percent of the cost of constructing or 
renovating one of these State veterans homes through the 
account which includes grants for State extended care 
facilities. We included $150 million in the economic recovery 
package for the construction of additional State veterans homes 
through this program. And as you know, a number of States now 
have either withdrawn or deferred their applications for this 
Federal funding because of their large budget deficits. That 
lack of State matching funds is especially problematic in areas 
where the VA is closing down longterm care facilities, and I am 
now working on legislation to give the VA authority to provide 
grants that cover a larger proportion of these construction 
costs in certain emergency situations. For example, if a State 
is facing a massive budget shortfall, and the proposed State 
veterans home is intended to replace a closed VA operated 
facility. Do you have any thoughts about that?
    Secretary Shinseki. Not at the moment, Senator. Let me get 
into the details of what you're describing here,----
    Senator Murray. Yes.
    Secretary Shinseki [continuing]. And provide you a better 
answer for the record.
    Senator Murray. Okay. I'm very concerned about this, and I 
know it's impacting my State and a number of other States, and 
as a result we're working on this legislation. And I'd like to 
work with you and whoever you tell us so we can move that 
forward.
    Secretary Shinseki. Absolutely. I'm dealing with a 
situation like this in at least one other State and trying to 
figure out what options we have.
    Senator Murray. Okay. Good.
    Secretary Shinseki. I'll work with you on that.
    Senator Murray. Great. And I am also interested in the 
issue of veterans unemployment. I know you talked about working 
with the Department of Defense and Department of Labor to 
address that problem, so I look forward--my time is up at this 
point, but I look forward to having more conversations with you 
about that.
    Secretary Shinseki. Absolutely.
    Senator Murray. I'm very concerned about these men and 
women who are coming home and don't have a job, and where we've 
left them. So I appreciate dialogue with you about that in the 
future. And finally, Mr. Chairman, before I turn the mike back 
over, I know you're coming up to Spokane, in my home State in a 
little over a month for the VA wheelchair games that are 
occurring there. You should know that every one from the 
veterans to the community members, all the Spokane VA 
employees, to their medical center director, Sharon Hellman: 
they've all been working very, very hard to make those games a 
success, so we look forward to seeing you out in our State for 
that very important event.
    Secretary Shinseki. Thank you, Senator.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Johnson. Senator Pryor, do you have any additional 
questions?
    Secretary Shinseki, I want to thank you and your colleagues 
for appearing before this subcommittee today. I look forward to 
working with you this year.
    For the information of members, questions for the record 
should be submitted by the close of business on June 16.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

               Questions Submitted by Senator Tim Johnson

    Question. Secretary Shinseki, could you please provide me with some 
information regarding Project Hero? I am concerned about the size and 
scope of the pilot program. The program is supposed to augment care by 
the VA, not replace it. My understanding is that one of these pilots is 
currently operating in South Dakota. Can you provide me with the annual 
cost of that specific program?
    Answer. Project Healthcare Effectiveness through Resource 
Optimization (HERO) is a pilot program that augments VA care and helps 
Veterans access the local health care they need when the medical 
expertise or technology is not readily available within the Department 
of Veterans Affairs. The ultimate goal of Project HERO is to ensure 
that all health care delivered by VA, either through VA providers or 
community partners, is of comparable quality and consistency for 
Veterans. All care is still managed by VA.
    Project HERO contracts do exist in South Dakota as part of VISN 
23's involvement in the demonstration effort. The two VAMCs in South 
Dakota that are part of Project HERO are the Sioux Falls VA Medical 
Center and the VA Black Hills Health Care System in Fort Meade and Hot 
Springs. Thus far in fiscal year 2009, Sioux Falls expended $222,209 
and Black Hills expended $104,427 for the health care and associated 
services involved in the provision of that care. This represents only 
7.9 percent of the total purchased care expenditures in Sioux Falls and 
1.4 percent in Black Hills.
    Question. How much is the VA spending annually on this program?
    Answer. Project Hero contract expenditures for the four VISNs where 
the contracts are operational (VISNs 8, 16, 20, and 23).

                                             DISBURSED DOLLAR AMOUNT
----------------------------------------------------------------------------------------------------------------
                                                                                  VISN Budgets
                          Timeframe                              Project HERO     (8, 16, 20 &     Project HERO
                                                                Disbursements         23)            percent
----------------------------------------------------------------------------------------------------------------
Fiscal year 2008 \1\.........................................       $7,797,071   $8,973,617,617             0.09
Fiscal year 2009 \2\.........................................       26,370,526    9,470,719,115            0.28
----------------------------------------------------------------------------------------------------------------
\1\ Project HERO Disbursements Jan-Sep 2008, VISN Budgets are obligations as of Sep 30, 2008.
\2\ Project HERO Disbursements through May 2009, VISN Budgets (VERA allocation, reimbursements and collections)
  are as of May 31, 2009.

    Question. How does the VA, both at the local level and at 
headquarters, oversee the quality of care provided through Project 
HERO?
    Answer. The Project HERO Program Management Office (PMO) ensures 
Veterans receive VA-comparable care through a clinical quality 
management program. The Project HERO Governing Board, comprised of 
leaders from VA, Veterans Health Administration (VHA) and participating 
VISNs, oversees quality, reports on Project HERO activities, and 
approves changes in terms, quantities, or conditions of the Project 
HERO contracts.
  --The PMO tracks patient safety events, accreditation/credentialing 
        status, clinical information returned to VA for continuity of 
        care, and timely access to care.
  --Humana Veterans Healthcare Services (HVHS) and Delta Dental track 
        and trend quality and safety events, as well as complaints and 
        grievances, and provide peer review oversight.
  --The PMO surveys Project HERO patients and compares the results with 
        the VA Survey of Healthcare Experiences of Patients (SHEP). 
        Overall satisfaction with HVHS providers is 73 percent and 
        overall satisfaction with Delta Dental services is 91 percent.
    Question. What procedures are in place to ensure that contract 
providers make proper referrals to the VA or outside the VA when 
veterans need specialty care or other referrals?
    Answer. VA providers determine when referrals are needed and 
whether or not non-VA care is appropriate. When care is referred 
outside VA, whether through Project HERO, another contract vehicle or 
through Fee care, VA remains responsible for reviewing recommendations 
for further care and determining the appropriate venue.
    Question. Where else are pilots operating--both by VISN and by 
health care system?
    Answer. Project HERO operates within four Veterans Integrated 
Service Networks (VISNs): 8, 16, 20 and 23.
    VISN 8: VA Sunshine Health Care Network.--Includes southern Georgia 
and most of Florida. It does not include Puerto Rico or the U.S. Virgin 
Islands. The stations included in this VISN are: Bay Pines, Miami, West 
Palm Beach, Gainesville/N.FL/S.GA, and Tampa/Orlando.
    VISN 16: South Central VA Health Care Network.--Includes Oklahoma, 
Arkansas, Louisiana, Mississippi and portions of the States of Texas, 
Missouri, Alabama, and Florida. The stations included in this VISN are: 
Alexandria, Gulf Coast (Biloxi), Fayetteville, Houston, GV Montgomery 
(Jackson), Central AR HCS (Little Rock), Muskogee, New Orleans, 
Oklahoma City, and Overton Brooks (Shreveport).
    VISN 20: Northwest Network.--Includes Washington State, Oregon, 
most of the State of Idaho, and one county each in Montana and 
California. It does not include Alaska. The stations included in this 
VISN are: Boise, Portland, Roseburg, Puget Sound, Spokane, Walla Walla, 
and South Oregon Rehab Center (White City).
    VISN 23: VA Midwest Health Care Network.--Includes Iowa, Minnesota, 
Nebraska, North Dakota, South Dakota, and portions of northern Kansas, 
Missouri, western Illinois, western Wisconsin, and eastern Wyoming. The 
stations included in this VISN in addition to Sioux Falls and Black 
Hills are: Fargo, Fort Meade, Minneapolis, Nebraska-Western Iowa 
(Omaha/Grand Island/Lincoln), Central Iowa, Iowa City, and St. Cloud.
                                 ______
                                 

            Questions Submitted by Senator Mary L. Landrieu

    Question. Has the Department finalized the design and cost estimate 
for the New Orleans VA Hospital? If so, could you please provide me 
that cost and what it includes? Did you eliminate aspects of the design 
to reduce cost? If so, is the design scalable to allow for later 
additions with additional funds?
    Answer. Schematic design has been completed for the New Orleans 
project, and design development is underway. The Department's Five Year 
Capital Plan submitted along with the fiscal year 2010 budget 
identifies the cost as $925 million. The total cost of the project will 
be dependent upon whether LSU can commit to a joint energy and utility 
plant feeding both hospitals. As the design progresses, VA is 
considering changes to aspects of the design to reduce cost, but 
maintain the capacity to meet the health care needs of Veterans that 
will be served by the new facility. The project is being designed to 
accommodate future expansion, and construction will be phased to allow 
it to start as soon as design is complete. Additional funding will be 
requested in a future budget to complete later phases of the project.
    Question. Will the delay with the LSU facility have an impact on 
the timeline for the VA Hospital?
    Answer. VA's design and construction timeline can proceed 
independent of the LSU facility. The cost of VA's facility, however, 
depends upon LSU committing to a joint energy and utility plant feeding 
both hospitals. If a decision on a combined plant cannot be reached by 
the time VA concludes the design development phase in December 2009, VA 
will have to move forward with building its own utility plant.
    Question. The notion of using electronic medical records and 
enhanced IT tools to serve the veterans is a good step in the right 
direction. My office has received many letters detailing how difficult 
it has been for certain veterans to file claims and receive benefits 
simply because the process is disorganized and inefficient. How long do 
you believe it will take to implement these electronic processes? And 
once implemented, how long until we see a positive turnaround on 
processing claims?
    Answer. The Veterans Benefits Administration (VBA) is currently 
working to transform its benefits delivery model to a paperless 
environment. A key benefit of this transformation is a common method 
for Veterans' self-service, which will greatly enhance access to both 
general and claim-specific information and allow Veterans to directly 
submit evidence in support of their claims.
    VBA will enhance its technical capabilities through a phased 
deployment strategy to facilitate continuous improvements in benefits 
delivery and claims processing. Coupled with technology, VBA is 
implementing a comprehensive business transformation strategy supported 
by an industry leader in business transformation and organizational 
change management. The business transformation contractor assists VBA 
in maximizing the capabilities of planned technology. VBA's goal is to 
be processing in a substantially paperless environment by the end of 
2012.
    Question. Coming from a State that is consistently under threat 
from with hurricanes and flooding, one of my primary concerns is care 
of our elderly citizens' and disabled veterans' during these natural 
disasters. When veterans are displaced due to these natural disasters, 
does the VA have solid emergency plans for their VA facilities treating 
veterans at the time of the disaster? If a veteran cannot return to his 
or her home immediately, how do you provide them instructions for how 
to receive medical care in displaced locations?
    Answer. Yes, VHA does have solid emergency plans for VA facilities 
treating Veterans at time of disasters. The Veterans Health 
Administration plans, organizes, equips, trains and exercises for 
disasters and emergencies common to their environment and in accordance 
with both The Joint Commission standards for Emergency Management and 
the National Incident Management System. VHA has developed a 
Comprehensive Emergency Management Program (CEMP) that ensures all VA 
medical centers develop, update, test and evaluate their emergency 
operations plans and programs on a continuous basis. VHA facility plans 
encompass extension facilities, such as outpatient clinics, community 
living centers, domiciliary units and home-based primary care programs.
    During a disaster, VHA medical center executives determine whether 
to shelter in place or evacuate their facility, based primarily on the 
safety of Veterans and employees. Utilizing a decision support system 
that weighs the disaster risk to the facility against the need to 
safely move Veteran patients, the VHA medical center director's 
decision is coordinated with the Veterans Integrated Service Network 
(VISN) Director and the VA Corporate Operations Center in consultation 
with the Deputy Under Secretary for Health for Operations and 
Management (DUSHOM).
    Question. As you know, there is a huge crisis in our country 
concerning homeless veterans. What sort of ideas or programs do you 
have concerning States, such as Louisiana, for when natural disasters 
strike and the homeless veterans are left behind or displaced?
    Answer. There has been a long term effort to provide services for 
Veterans and families in need of homeless services. Our latest effort, 
the Housing and Urban Development--Veterans Affairs Supported Housing 
(HUD-VASH) Program, has already shown great results in serving Veterans 
families including women Veterans and Veterans with children. A total 
of 315 Housing Choice Vouchers (section 8) HUD-VASH vouchers have been 
allocated to provide permanent housing resources for Veterans and 
families in Louisiana over the last 2 years. We know based upon our 
transitional housing program that these programs address the conditions 
you describe regarding displaced homeless Veterans. The VA's Homeless 
Providers Grant and Per Diem Program has a total of 348 (223 post 
Katrina) authorized beds at 14 locations with community non-profit 
providers in Louisiana.
    Question. Speaking about creating an environment of advocacy and 
change within the Department of Veterans Affairs is a positive idea. 
Perhaps there could be more jobs created within the Department for 
veterans to act as advisers during this process of change? Going 
further, perhaps homeless veterans could be identified and trained to 
give support to the new program and use their knowledge of veterans 
needs to teach those who are creating policy? Have you considered such 
an approach?
    Answer. The Department of Veterans Affairs is very committed to 
achieving a high ratio of Veterans among its workforce. Your suggestion 
to identify new ways of reaching out to Veterans--including homeless 
Veterans--is a welcome one that can help further the effort to employ 
Veterans. I also agree that the VA will be successful only if it 
listens to our Veterans to better understand their needs and to better 
serve them in the future.
    There are some ways in which the VA currently works with homeless 
Veterans to help them gain employment. These include the Compensated 
Work Therapy Program and Recovery Model programs. As we undergo 
development of new efforts to meet new Veteran needs in the 21st 
Century, we will explore how to enhance our effort to train Veterans to 
work at the VA. I welcome your suggestions in this ongoing effort.
    Further expanding on the idea of the importance of Veteran 
experience, I would note VA's Office of Mental Health Services has 
developed Recovery Model programs focusing on peer to peer support for 
Veterans helping Veterans. Homeless Veterans Programs and Psychosocial 
Programs have embraced the recovery model. VA has hired Veterans as 
peer support positions in recovery programs. VA has hired Veterans 
discharged from the Compensated Work Therapy Program. VA will explore 
the feasibility of having homeless and formerly homeless Veterans from 
the CWT program assist with the development of services and program 
policy.
    Question. Last year VA was directed to establish an office for 
survivors, a desk that would have staff focused on survivor issues. 
When will that office be operational?
    Answer. The Office was created on December 22, 2008 and set up 
under the Office of the Secretary. Four employees were immediately 
detailed to the Office to start working on the mission as defined by 
Congress. A Director and one permanent employee have been selected and 
the remaining personnel will be chosen soon. The Office has been 
gathering baseline data to see what VA offers for survivors and 
dependents. We've been evaluating various programs, such as comparing 
CHAMPVA to TRICARE. The law States CHAMPVA needs to offer the same or 
similar benefits as TRICARE. We've finished with our analysis and are 
evaluating recommendations for improvement in CHAMPVA.
                                 ______
                                 

                Question Submitted by Senator Mark Pryor

    Question. The DOD and VA have taken crucial steps toward creating a 
Joint Lifetime Electronic Record (VLER), as announced by President 
Obama on April 9, 2009. (The vision for this initiative is for all 
current and future service members, Veterans, and eligible family 
members to have a VLER that will encapsulate all data necessary to 
uniquely identify them and ensure the delivery of care and benefits for 
which they are eligible).
    What do you think about VLER and where are we in the funding 
process to begin to implement its collaboration with in the Services?
    Answer. The Virtual Lifetime Electronic Record is extremely 
important to Veterans, VA and our service providers. We have moved 
quickly to assign staff to aggressively develop VA's vision, plan and 
approach for delivering a VLER capability. VLER is a critically 
important endeavor that will incorporate not only collaboration between 
VA and DOD but also include other Federal agencies and private 
industry. Current activities include development, review and acceptance 
of VA's VLER Strategic Vision by the JEC, redrafting of the Interagency 
Program Office's operating charter to mitigate issues regarding its 
functions and authority, extensive outreach to HHS, assessment of 
integration opportunities within the existing IT investment portfolio 
to ensure the effectiveness and efficiency of resourcing for VLER 
initiatives, and drafting and development of the master plan for VLER 
demonstrations that would leverage existing IT investments and 
initiatives. With respect to the specific question of funding, initial 
start-up funding will be provided to support a program office for VLER. 
Because the 2010 budget request had already been prepared prior to VLER 
start-up, 2010 funds will need to be identified within existing 
resources to proceed with VLER. Assessment of the IT investment 
portfolio is also required in order to evaluate whether or not current 
investments might be leveraged directly to support VLER.
                                 ______
                                 

          Questions Submitted by Senator Kay Bailey Hutchison

    Question. Mr. Secretary, it is everyone's goal to leverage 
information technology to have veterans seamlessly transition from the 
DOD to the VA. However, an Inspector General's audit of VA IT projects 
revealed that 40 are on OMB's Management Watch List, and 37 are on 
OMB's High Risk IT Project List. The Inspector General cited those 
projects as being poorly planned and poorly performing and singles out 
the HealtheVet Project as ``not having a comprehensive project 
management plan to guide the development and integration of sub-
projects.'' One of these sub-projects, a scheduling application, 
recently failed during its deployment at the cost of 8 years and $167 
million. The report also States that the HealtheVet program ``lacks a 
fully implemented governance structure.'' As a result, the project 
completion date has slipped from 2012 to 2018. Mr. Secretary, the VA 
plans to invest $360 million in 2010 and $11 billion overall into a 
project that is said to be poorly planned and poorly performing. This 
project is of great importance to our veterans, and I do not want it to 
fail.
    Given the recent failure of the scheduling application and last 
month's Inspector General reports, how do you justify a 30 percent 
increase in Information Technology spending to $3.3 billion when so 
many of your projects and programs seem to lack basic IT project 
management oversight? How will you fix this management capability?
    Answer. The actual increase in information technology spending 
requested for 2010 is 20 percent and supports a number of high priority 
development projects such as Chapter 33, FLITE, and the Paperless 
Delivery of Benefits Initiative. A large part of the requested increase 
is to hire more IT staff, directly addressing cited weaknesses in IT 
project management oversight. Another significant increase is to 
maintain and strengthen our IT infrastructure.
    The VA has taken strong steps and a proactive approach towards 
addressing IT project management weaknesses. The Department has 
directed that IT projects be managed using incremental development 
methodologies. This approach requires close collaboration between 
developers and business owners to produce substantive deliverables on a 
6-month schedule to achieve near-term, incremental successes. This 
approach provides more transparency to management, ensuring potential 
risks and failures are identified and effectively addressed earlier in 
the development life cycle. All new VA IT projects must utilize 
incremental development methodology and be compliant with the VA's 
newly implemented Program Management Accountability System (PMAS), 
while existing IT projects must adopt both incremental development and 
PMAS compliance within one calendar year.
    Question. To improve the oversight role of this subcommittee, can 
you please provide us with additional details relating to all IT 
projects and programs, including HealtheVet, that will receive proposed 
funding in fiscal year 2010? Specifically, will the Department produce 
a list of defined requirements, a detailed cost schedule, and a 
timeline on a project-by-project basis.
    Answer. The Office of Information and Technology is in the process 
of collecting information relative to your questions and will provide a 
response to the Committee not later than July 31, 2009.
    [The information follows:]

    The Department of Veterans Affairs (VA is in the process of 
reworking its existing Guide and Service Dog program. As part of this 
effort, VA has already drafted new regulations that are currently 
undergoing review prior to their submission to the Federal Register. 
After an opportunity for public response to these regulations, VA will 
then review the public comments, edit the regulations as may be 
necessary, and then submit the regulations for final publishing.
    During this process, Guide and Service Dogs will continue to be 
provided to eligible Veterans whose attending physicians have 
documented an individual Veteran's identified need. Pending 
implementation of our new program and publication of the new 
regulations, VA will continue to work with accredited organizations to 
provide dogs to Veterans at no charge. VA will also continue to support 
the payment of the dogs' veterinary care and supportive hardware as 
required assistive devices.
    Subject to the number of public comments resulting from the public 
comment period, VA anticipates that the final version of the Guide and 
Service Dogs regulations will be published in the Federal Register 
prior to December 30th, 2009.

                               BACKGROUND

  --VA IT Consolidation initiate in 2007
    --Primary purpose is to improve the results of VA IT investments
  --Replacement Scheduling Application Failure
    --VA commitment to review all ongoing development programs
  --New Secretary/Deputy Secretary/CIO confirmed
    --Significant Senate questioning on how to address program issues
                      analysis of ongoing programs
  --280+ programs reviewed to date
  --8 program attributes analyzed
  --Many programs exhibit signs of trouble
    --Greater than 13 months behind schedule
    --Greater than 50 percent over initial cost estimate
    --Decrease in software quality between releases
    --Inadequate skills to complete program
  --Substantial change is required

                        INCREMENTAL DEVELOPMENT

  --All new VA IT projects/programs must use an incremental development 
        approach
    --Frequent customer delivery milestones
      --At most every 6 months
    --Customer must test and accept functionality
  --To be approved for investment, a program or project must have:
    --An identified customer sponsor
    --Program plan that documents frequent delivery milestones
    --Documented, agreed to requirements for initial milestones
    --Clear plan for necessary program disciplines
    --Clear access to necessary program resources
    --Customer, program, and vendor acceptance of PMAS
    --Jointly established success criteria

            PROGRAM MANAGEMENT ACCOUNTABILITY SYSTEM (PMAS)

  --All incremental development programs will be managed rigorously to 
        schedule
    --A program/project will be halted on its third missed customer 
            delivery milestone
  --Once halted, substantial changes must be made before the program 
        can restart
    --Need for program/project will be re-assessed
    --Program approach will be re-assessed
    --Make/buy and program design decisions will be re-assessed
    --New Program Manager will be assigned (rotational/training 
            assignment)
    --A portion of the government program staff will be reassigned 
            (rotational/training)
    --All service contracts will be re-visited
    --New program plan must be approved
  --Flexibility can be earned
    --Multiple successful milestones between strikes
    --Clear improvement in management between first and second strike
    --Significant advance warning of missed milestone provided to CIO

                        PROGRAM MANAGER BENEFITS

  --Clear decision criteria
    --Impact on schedule will drive program choices
  --Better program control
    --Success factors must be in place before program start
  --Decreased requirements creep
    --Impact on schedule will force hard decisions
    --New requirements factored into later release schedules
  --Clear customer participation
    --Must test and approve each release
    --Clearly impacted by program halt
  --Clear vendor attention and participation
    --Motivated to help program meet milestones
  --Increased probability of successful program

                              VA BENEFITS

  --Eliminate ``big bang'' program/project failures
  --Near-term visibility into troubled programs
    --Able to provide help if possible
    --Avoid long-term failures
  --Better insight into scarce resources
  --Frequent deliveries to customer ensures program/project 
        functionality, quality, response, etc.
  --Increased probability of successful programs

                             IMPLEMENTATION

  --Incremental development is required for all new IT programs/
        projects starting as of 6/15/2009
  --All incremental development programs will be managed by PMAS 
        effective 6/15/2009
  --VA will pause a number of Programs/projects identified as in 
        jeopardy
    --Program plan re-cast for incremental development
    --New plan must be PMAS compliant
    --New program plan must be approved by CIO before program resumes
  --Within one year, all VA IT programs and projects will be 
        incremental development/PMAS compliant
    --Programs that remain within 10 percent of original program plan 
        (schedule, cost, function) may be excepted
    Question. Mr. Secretary, you have mentioned your plans to 
``transform the VA into a 21st Century organization.'' We would like to 
work with you as you embark on such a large undertaking.
    Can you please clarify what these new initiatives are and from what 
appropriations account you intend to fund them?
    Answer. Transformation of the VA into a 21st century organization 
will take more than one year, but the fiscal year 2010 budget is the 
first real opportunity for VA and the Congress to move out on this 
important mission. Our review of the VA fundamentals is still in 
process. We have heard from stakeholders, and will continue to partner 
with them at every opportunity to improve our service to Veterans. Much 
of our review is informed by Congressional input and I greatly value 
those contributions.
    VA is focusing its transformation efforts to more efficiently and 
effectively deliver care and benefits, enhance the Veteran experience 
in all interactions with the VA, and improve awareness and access to VA 
services. Our work to date has already identified a number of 
opportunities to change VA in fundamental ways that will benefit our 
client--the Veteran--while doing things smarter and more effectively.
    As part of an ongoing review of all VA programs and spending, the 
VA leadership is developing new initiatives to be implemented in fiscal 
year 2010 that improve quality, increase access, and enhance 
performance while controlling costs. These build upon the efforts 
already in the fiscal year 2010 request and augment several major new 
initiatives already underway, including the implementation of the Post 
9/11 GI Bill, the most extensive educational assistance program 
authorized since the original GI Bill, and the extension of care to 
265,000 Priority 8 Veterans. In addition, VA and The Department of 
Defense have partnered to create a Virtual Lifetime Electronic Record 
to ensure that soldiers leaving the Armed Services are quickly and 
easily transitioned into the VA.
    We are in the process of identifying additional opportunities to 
adjust our investment portfolio for the benefit of Veterans. These new 
initiatives will not change the fiscal year 2010 budget top line.
    Question. Mr. Secretary, Congress's 2010 Budget Resolution includes 
a provision that would allow for advance appropriations for the VA's 
medical care accounts, meaning fiscal year 2011 funding could be 
provided during the 2010 appropriations cycle. I know you have publicly 
supported the idea of advance appropriations, but it was not included 
in the President's fiscal year 2010 budget request. If Congress decides 
to provide an advance appropriation, I want to be sure the Department 
can provide us with an accurate estimate so we can properly budget for 
the health care network that supports our Nation's veterans.
    Does the Department have the ability to provide the Congress with 
an accurate estimate of its fiscal year 2011 requirements during this 
year's appropriations cycle, or do you need more time to work on it?
    Answer. Yes, VA provided the request for advance appropriations for 
fiscal year 2011 to Chairman Johnson in a letter from Secretary 
Shinseki on June 12, 2009, as a result of Chairman Johnson's request 
for this information during the June 11, 2009, Appropriations Hearing.
    Advance appropriations will help support a reliable and timely 
resource stream to support the delivery of accessible and high-quality 
medical services to our Veterans. It also builds on the solid 
foundation set in the President's fiscal year 2010 budget as we take 
the early first steps to transform VA into a 21st century organization.
    VA is seeking support for a request for advance appropriations for 
fiscal year 2011 of $48.183 billion for the three medical care 
appropriations to support estimated growth to 6.1 million patients. 
This would represent an increase of 8.3 percent over the President's 
fiscal year 2010 appropriation request of $44.498 billion. The fiscal 
year 2011 total is comprised of $37.136 billion for Medical Services, 
$5.307 billion for Medical Support and Compliance, and $5.740 billion 
for Medical Facilities. In addition to the appropriated resource level 
we anticipate collections in the amount of $3.355 billion, for a total 
advance appropriations resource level of $51.538 billion.
    This estimate is based in part on the VA Enrollee Health Care 
Projection Model (VA model) using fiscal year 2008 as the base year, 
which is the most recent actual data available. The model continues to 
support the initiative of providing additional enrollment access for 
over 500,000 previously ineligible Priority Group 8 Veterans by 2013. 
Our estimate also includes resources for programs that are not 
projected by the VA model. These programs include long-term care, the 
Civilian Health and Medical Program of the Department of Veterans 
Affairs, Vet Centers, and the State home per diem program.
    The advance appropriations estimate will ensure timely funding at 
the beginning of fiscal year 2011 for VA's three medical care 
appropriations. We have made significant improvements over the past 
years in calculating and monitoring our resource needs. The Department 
and the Office of Management and Budget are in agreement on this 
request. We will continue to jointly monitor medical care cost and 
performance indicators on a monthly basis and will make any needed 
adjustments to the requested fiscal year 2011 advance appropriation 
level during the regular process of formulating the President's fiscal 
year 2011 Budget this fall. In addition, funding for new medical care 
program initiatives will be considered in the formulation of the 
President's Budget later this year. It is during this process that we 
will also identify the resources needed to support medical information 
technology and capital construction program budgets.
    Question. Do you intend to include more than ``Health Care'' in 
your estimate of the financial need for 2011.
    If yes, why not just include the ``Health Care'' needs in your 
estimate and submit the new initiatives and other accounts for the 
normal appropriations review process?
    Answer. VA included only the three medical care appropriations in 
the request we sent to Congress on June 12, 2009, for fiscal year 2011 
advance appropriations.
    Question. Does OMB plan to submit an estimate for 2011?
    Answer. VA submitted a request for fiscal year 2011 advance 
appropriations to Congress on June 12, 2009, for the three medical care 
appropriations. VA and OMB are in agreement on this request.
    Question. Mr. Secretary, the Department has a significant unfunded 
liability on its major construction projects. Currently in 2009, the 
Department has 14 ongoing projects that are partially funded, with a 
cumulative remaining need on those projects of more than $2.8 billion. 
Despite this need, the Department is proposing to start 7 new projects 
in its fiscal year 2010 request. This would increase the Department's 
unfunded liability to nearly $4.5 billion for ongoing projects.
    Does the Department have a Five-Year Capital Plan to guide its 
major construction projects that often span several fiscal years? If 
so, will the Department please provide that Five-Year Capital Plan to 
the subcommittee?
    Answer. While the Department does submit a Five Year Capital Plan 
with its Congressional Justifications each year, it is important to 
note that this plan will most likely change in the out-years based upon 
various factors including: the actual annual major construction funding 
appropriation provided; schedule changes for any current partially-
funded projects, and the incorporation of additional new projects added 
and scored during the capital investment process in future budget 
cycles. That said, it is the Department's policy to prioritize 
partially funded projects from previous years, provided those projects 
are ready to execute within the budget year.
                                 ______
                                 

             Questions Submitted by Senator Mitch McConnell

    Question. The proposed VA hospital in Louisville is currently 
stalled.
    In addition to the project in Louisville, what other VA hospital 
construction projects have a pending site selection process?
    Answer. Other than Louisville, VA is not in the site selection 
phase related to the construction of new or replacement hospitals at 
any other location.
    Question. How long have these other projects been awaiting site 
selection? When can we expect the VA to select a site in Louisville?
    Answer. The Department has contracted with the architectural firm 
selected to design the new facilities to conduct a feasibility study to 
further explore the potential for locating the facilities at the site 
of the existing VA medical center on Zorn Avenue. The study will also 
evaluate the location near the University of Louisville in downtown 
Louisville and consider the potential of an unidentified green field 
site elsewhere in the metropolitan area. This study is scheduled to be 
completed in October of this year. It is expected that before the end 
of the calendar year, the Department will select the preferred location 
of the facilities. At that time, environmental due diligence in 
accordance with the National Environmental Policy Act will be conducted 
which will then permit the final decision on the site to be made.
                                 ______
                                 

             Questions Submitted by Senator Lisa Murkowski

    Question. The Alaska Legislature recently authorized Governor Palin 
to seek VA funding to establish Alaska's first State Veterans Cemetery 
which will be sited in Interior Alaska. However, I understand that VA 
funding for projects like this may not be immediately available due to 
a shortfall in Veterans Cemetery funding which places new projects on a 
waiting list. How much funding would the VA require to eliminate this 
shortfall? Based upon expected funding levels for the State Veterans 
Cemetery program how long would you have to expect that the State of 
Alaska would have to wait between the date upon which it submits its 
application for the cemetery and the date it would actually receive VA 
grant funding?
    Answer. The State of Alaska submitted a preapplication for the 
Fairbanks Veterans Cemetery on March 23, 2009, and was assigned Federal 
Application Identifier (FAI) AK-09-01. On March 27, 2009, State 
Cemetery Grants Service notified Mr. Jerry Beale, Director, Alaska 
Veterans Office that the project was viable and would be ranked with 
all other pending preapplications in the fiscal year 2010 Priority 
List. The priority list is annually developed, is approved by the 
Secretary, and is the basis for providing grant opportunities during 
the fiscal year. To be ranked in the highest group, States and tribal 
governments must submit legislation authorizing the project and the 
certification that funds for architectural and engineering fees are 
available to begin the project by the August 15 deadline. These fees 
are reimbursable to grant recipients. We have been in recent contact 
with Mr. Verdie Bowen, Administrator, Office of Veterans Affairs, 
requesting the signed legislation and funds certification. It is 
expected to be submitted by the State prior to the deadline. The 
project would be developed to serve the 10,800 veterans in the 
Fairbanks/North Star area.
    Until the August 15, 2009, deadline is reached and the fiscal year 
2010 Priority List is approved, it is not possible to estimate the 
funds needed to offer the State of Alaska a grant opportunity.
    Projects are ranked in accordance with Title 38 CFR 39.7. The 
Alaska project would be ranked in Priority Group 2 with 10,800 unserved 
Veterans. The priority groups are defined as follows:
  --Priority Group 1.--Projects needed to avoid disruption in burial 
        service that would otherwise occur at existing Veterans' 
        cemeteries within 4 years of the date of the preapplication. 
        Such projects would include expansion projects as well as 
        improvement projects (such as construction of additional or 
        replacement facilities) when such improvements are required to 
        continue interment operations.
  --Priority Group 2.--Projects for the establishment of new Veterans' 
        cemeteries.
  --Priority Group 3.--Expansion projects at existing Veterans' 
        cemeteries when a disruption in burial service due to the 
        exhaustion of existing gravesites is not expected to occur 
        within 4 years of the date of the preapplication.
  --Priority Group 4.--Other improvement projects to cemetery 
        infrastructure such as building expansion and upgrades to roads 
        and irrigation systems that are not directly related to the 
        development of new gravesites.
    It is anticipated that 32 projects in priority groups 1 and 2 will 
be on the fiscal year 2010 Priority List. The value of those projects 
is $170 million. It is anticipated that not all projects in priority 
groups 1 and 2 will submit the documentation and will not rank high 
enough to receive a fiscal year 2010 grant opportunity. In fiscal year 
2009, there were 11 such projects with a value of $44 million.
                                 ______
                                 

              Questions Submitted by Senator Thad Cochran

    Question. The Departments of Defense and Veterans Affairs are 
moving forward with jointly operated hospitals and clinics in several 
areas where existing facilities are co-located. One such facility is in 
my State of Mississippi.
    After Hurricane Katrina, Keesler Medical Center and the Biloxi VAMC 
used a ``centers of excellence'' approach to identify the best services 
at each of the two facilities and consolidate those services when 
possible and practical. Some activities are completely consolidated, 
with staffs working side-by side with one another, and other services 
have a partnership where they have the capability to ``trade'' doctors 
and nurses when required. In 2007, Keesler Medical Center and the Gulf 
Coast Veterans Health Care System in Biloxi were granted official 
joint-venture status.
    Currently, DOD and VA are working towards complete consolidation 
between the North Chicago VAMC and the Naval Great Lakes Health System 
in Chicago. They are finding many obstacles along the way regarding 
funding mechanisms, facilities ownership, personnel transfer, and 
information technology. For example, one of the biggest issues 
impacting all future joint venture sites is the lack of a common 
medical record between the Department of Defense and the Department of 
Veterans Affairs. Consequently, staff must learn both systems when 
working at a joint venture facility, which is neither time- nor cost-
efficient.
    Joint cooperation has provided great benefit to veterans and 
service members in the Gulf Coast region. However, the Air Force 
Surgeon General expressed concerns that complete consolidation between 
Keesler and Biloxi VAMC could be a detriment to the Air Force mission.
    Question. Secretary Shinseki, can you comment on the current 
relationship between Keesler and Biloxi VAMC, and give me your thoughts 
on the impacts of complete consolidation there?
    Answer. The Keesler Air Force Medical Center (81st Medical Group) 
and the Biloxi VA Medical Center (VA Gulf Coast Veterans Health Care 
System) have maintained a supportive and collaborative relationship for 
decades. Hurricane Katrina inflicted heavy damage on both medical 
centers. Following Katrina, TRICARE Management Activity and VA 
developed a strategy to maximize sharing/joint services. In 2007, 
developing Centers of Excellence (COE) became the preferred strategy. 
Although sharing between the facilities has a long history, complete 
consolidation of Keesler/Biloxi is not the goal. The two medical 
centers are in close proximity. This offers each the flexibility to 
meet their core mission requirements while sharing services where and 
when appropriate. The COE model is clinically focused. It emphasizes 
joint communication and planning. Meetings are conducted at all levels 
to maintain the day-to-day management structure of each medical center.
    Question. Is the VA moving forward with complete consolidation at 
Keesler or any other joint venture sites?
    Answer. The current focus is consolidation where it makes sense 
rather than consolidation of all services. Both medical centers will 
retain independent management and operations. They will share oversight 
of all joint activities. Because of challenges based on differences in 
medical records, business rules and regulations, each COE will, by 
necessity, be carefully evaluated prior to the implementation of new 
sharing agreements. In June 2008, Keesler/Biloxi developed a COE 
Concept of Operations to evaluate progress towards consolidation based 
on a domain-based level of interface matrix that tracks nine domains 
that includes: clinical services, facilities, staffing, business 
processes, management/governance, information management and 
information technology, logistics, education and training, and 
research.
    Each domain is evaluated based on movement along a five-element 
continuum--(1) separated, (2) coordinated, (3) connected, (4) 
integrated and, (5) consolidated. Not all nine domains will end at the 
consolidated state depending on the circumstances and the feasibility 
of doing so. The process is measured and deliberate. Joint Incentive 
Funds (JIF) were used to develop and refine the COE concept. JIF funds 
in fiscal year 2007 provided resources for a Joint Magnetic Resonance 
Imaging (MRI) Center and a Joint Cardiovascular Care Center at Keesler. 
In fiscal year 2008 the JIF provided funding to administratively 
support the COE implementation. Pending JIFs would fund the renovations 
of space for joint use at Keesler, and establish infrastructure for 
Joint Business Operations. Joint initiatives currently include a Sleep 
Lab on the Biloxi Campus and a Joint Women's Health Clinic. Other 
sharing initiatives are in various stages of planning and development.
    Question. Has the VA considered duplicating the model at Keesler/
Biloxi VAMC at other joint venture sites?
    Answer. An Executive Management Team at Keesler/Biloxi meets bi-
monthly to set priorities and provide oversight on the sharing or 
realignment of services. This group quickly realized there are 
overlapping areas of responsibilities along the Gulf Coast. The team 
expanded and now includes: the Commander, 81st Medical Group, Keesler 
AFB; the Director, VA Gulf Coast Veterans Health Care System; the 
Commanding Officer, Naval Hospital Pensacola, Florida; and the 
Commander, 96th Medical Group, Eglin AFB, Florida. The Under Secretary 
of Defense (Personnel and Readiness) met with the Deputy Secretary of 
Veterans Affairs in March 2008 to discuss developing model programs for 
Joint Ventures that included the domain-based levels of interface. Four 
locations were selected: Biloxi, Mississippi; Las Vegas, Nevada; 
Denver, Colorado; and Honolulu, Hawaii. A Joint Market Opportunities 
Work Group provides assistance and assesses progress at each site using 
the domain-based levels of interface tool. They report to the VA/DOD 
Joint Executive Council.

                         CONCLUSION OF HEARINGS

    Senator Johnson. This hearing is recessed.
    [Whereupon, at 2:23 p.m., Thursday, June 11, the hearing 
were concluded, and the subcommittee was recessed, to reconvene 
subject to the call of the Chair.]
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