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


FROM TUMULT TO TRANSFORMATION: THE COMMISSION ON CARE AND THE FUTURE OF 
                        THE VA HEALTHCARE SYSTEM

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

                                HEARING

                               BEFORE THE

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

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                      WEDNESDAY, SEPTEMBER 7, 2016

                               __________

                           Serial No. 114-78

                               __________

       Printed for the use of the Committee on Veterans' Affairs
       
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                     COMMITTEE ON VETERANS' AFFAIRS

                     JEFF MILLER, Florida, Chairman

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

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Veterans' Affairs are also 
published in electronic form. The printed hearing record remains the 
official version. Because electronic submissions are used to prepare 
both printed and electronic versions of the hearing record, the process 
of converting between various electronic formats may introduce 
unintentional errors or omissions. Such occurrences are inherent in the 
current publication process and should diminish as the process is 
further refined.
                            
                            C O N T E N T S

                              ----------                              

                      Wednesday, September 7, 2016

                                                                   Page

From Tumult To Transformation: The Commission On Care And The 
  Future Of The VA Healthcare System.............................     1

                           OPENING STATEMENTS

Honorable Jeff Miller, Chairman..................................     1
Honorable Mark Takano, Acting Ranking Member.....................     3

                               WITNESSES

Nancy Schlichting, Chairperson, Commission on Care...............     4
    Prepared Statement...........................................    37
Delos M. (Toby) Cosgrove, M.D., Vice Chairperson, Commission on 
  Care...........................................................     8
    Prepared Statement...........................................    41

                       STATEMENTS FOR THE RECORD

The American Federation of Government Employees, AFL 09CIO.......    43
AMVETS...........................................................    45
Concerned Veterans For America...................................    52
Disabled American Veterans (DAV).................................    55
The American Legion..............................................    62
The Enlisted Association of The National Guard of The United 
  States.........................................................    65
Iraq And Afghanistan Veterans of America.........................    70
Military Officers Association of America.........................    77
NOVA.............................................................    81
Paralyzed Veterans of America (PVA)..............................    82
Veterans of Foreign Wars of The United States....................    88
Vietnam Veterans of America (VVA)................................    96
Healthcare Professionals Federal Union...........................   100

                        MATERIALS FOR THE RECORD

Letter From Chairman Miller To Mark Takano.......................   101
Letter From Robert A. McDonald To President Barack Obama.........   102
Text of a Letter From The President..............................   117

 
FROM TUMULT TO TRANSFORMATION: THE COMMISSION ON CARE AND THE FUTURE OF 
                        THE VA HEALTHCARE SYSTEM

                              ----------                              


                      Wednesday, September 7, 2016

            Committee on Veterans' Affairs,
                    U. S. House of Representatives,
                                                   Washington, D.C.
    The Committee met, pursuant to notice, at 10:49 a.m., in 
Room 334, Cannon House Office Building, Hon. Jeff Miller 
[Chairman of the Committee] presiding.
    Present: Representatives Miller, Lamborn, Bilirakis, Roe, 
Benishek, Coffman, Wenstrup, Walorski, Abraham, Zeldin, 
Costello, Radewagen, Bost, Takano, Brownley, Ruiz, Kuster, 
O'Rourke, Rice, and Walz.

           OPENING STATEMENT OF JEFF MILLER, CHAIRMAN

    The Chairman. I am going to go ahead and ask our two 
witnesses to come to the table. Thank you so much for allowing 
us to take care of a piece of business that was important to 
both sides. I will now call the Committee to order.
    I thank everybody for joining us for today's oversight 
hearing, ``From Tumult to Transformation: The Commission on 
Care and the Future of the VA Healthcare System.'' You will 
remember that the Commission on Care was established two years 
ago by the Veterans Access, Choice and Accountability Act and 
it was tasked with examining access to care and how best to 
organize the Department of Veterans Affairs health care system 
and deliver care to our Nation's veterans over the next two 
decades. The commission's final report was delivered at the end 
of June, and with us today to discuss it and the 18 
recommendations it includes are Commission on Care Chairperson 
Ms. Nancy Schlichting and Vice Chairperson Mr. Toby Cosgrove, 
Dr. Toby Cosgrove.
    I want to thank them for being here today, and I truly want 
to express my gratitude to them and all the commission members 
for their time and effort that they put into the important work 
of the commission. I want to say thanks to the many veterans 
service organizations and other stakeholders that provided 
statements for the record for today's hearing. The advice, 
counsel, and support offered by our VSO partners is vital to 
the work of our Committee as we work everyday on behalf of 
America's veterans. I am personally grateful for the input that 
they have provided me as Chairman and will, I am sure, continue 
to provide this Committee as Congress moves forward to 
strengthen the VA health care system for future generations of 
America's heroes.
    Like me, the VSOs and by and large we are supportive of 
many of the recommendations that the commission has made. The 
commission rightly recognizes that the current VA health care 
system has many strengths, many strengths, as well as 
weaknesses. Moving forward it will be important to ensure that 
any transformative effort that VA undergoes preserves those 
strengths, which include in many cases the provision of care 
equal in quality to that, that is available outside the 
department walls.
    However, VA's weaknesses, which include persistent access 
failures; non-compliance with Federal prompt pay laws; a lack 
of accountability; a bloated and self-preserving bureaucracy; 
and billions of taxpayer dollars lost to financial 
mismanagement of construction projects to IT programs, bonuses 
for poor performing employees, and more, are legion and 
growing. This is evidenced not only by the commission's almost 
300-page final report but also by the thousands of pages that 
made up last year's independent assessment, the years of work 
performed by this Committee, the GAO, the VA Inspector General, 
and others, and most importantly by the daily experiences of 
the millions of veterans who rely on VA for care, are all too 
often left disappointed.
    I wholly agree with the commission's call for creating an 
integrated VA community care system, modernizing VA's outdated 
IT systems, better managing VA's vast capital assets, 
reorganizing the massive and unfocused Veterans Health 
Administration central office, reviewing eligibility for care 
in light of the modern health care landscape, and much, much 
more. However, I disagree, as does the administration and many 
of the VSOs, with the commission's call for the establishment 
of a board of directors to provide governance, set long term 
strategy, and direct and oversee reform. The commission is 
right to recognize that VA's position as our Nation's second 
largest Federal bureaucracy carries inherent challenges that 
are deserving of our detailed consideration. However, given the 
crises that seem to erupt anew on almost a daily basis where VA 
is concerned and any efforts to shield the VA health care 
system from executive and legislative branch oversight is a 
non-starter. Outsourcing the crucial role of a cabinet 
secretary to an independent board that is neither elected nor 
accountable to the American people would be irresponsible in my 
opinion and inappropriate, not to mention unconstitutional.
    The debt that our Nation owes to her veterans is a debt 
that we all share and the commission's work represents the 
culmination of a unique moment in history for VA and the 
veterans that VA exists to serve. There have been and likely 
will be other commissions devoted to examining VA and how well 
the department is meeting its most important mission, and that 
is providing accessible, high quality care to our Nation's 
veterans. But it is incumbent on all of us not to let the work 
of this commission fall by the wayside like so many other 
studies have. And I assured you both, this is not one that will 
sit on a shelf and gather dust. Ignoring this opportunity would 
be a dereliction of our duty.
    The scandals that have characterized VA for the last 
several years have opened the door to finally changing the 
systemic culture and deeply entrenched problems that face VA 
and their health care system. Translating that momentum into 
lasting and meaningful reform will require a commitment to 
having uncomfortable conversations about how as a Nation we can 
begin to pay the debt we owe the men and women of our armed 
forces and to taking the risks that are necessary to challenge 
the status quo that has left them wanting and waiting.
    Whoever sits in this chair after me will be responsible for 
and I am sure will be more than capable of moving the ball 
forward, and I am hopeful that today's hearing will help set 
the tone for that effort. With that, I will yield to the 
Ranking Member Mr. Takano for an opening statement.

    OPENING STATEMENT OF MARK TAKANO, ACTING RANKING MEMBER

    Mr. Takano. Thank you, Mr. Chairman, for calling today's 
hearing.
    Since we first learned of the wait time controversy in 
Phoenix, this Committee has been on a path toward reforming the 
Department of Veterans Affairs.
    The passage of the Veterans Access, Choice and 
Accountability Act in the 113th Congress required the 
Independent Assessment of the Health Care Delivery Systems and 
Management Processes of the Department of Veterans Affairs. 
This gave us a good view of the VA health care delivery systems 
and management processes.
    A year later, the enactment of the Surface Transportation 
and Veterans Health Care Choice Improvement Act of 2015 
required the VA to come up with a plan to consolidate all care 
in the community programs.
    Now, the Commission on Care has released its 
recommendations for transforming veterans' health care over the 
next 20 years.
    I am pleased to receive these recommendations, but am 
disappointed the VA was not invited to respond and share its 
input this morning. Per the legislation, the VA had 60 days to 
comment on these recommendations and just provided its response 
to us late last week. I am also disappointed the witness we 
requested, Commissioner Michael Blecker, was not allowed to 
join our other witnesses to testify here today. I thought the 
issues and concerns he raised in his dissent letter were 
insightful and needed to be part of the discussion as this 
Committee weighs the best path forward for the VA. I ask 
unanimous consent that Mr. Blecker's dissent be entered into 
the record.
    The Chairman. Without objection, so ordered.
    Mr. Takano. With all the reports and studies we have seen 
over the last two years, it is clear to me that the status quo, 
the VA as we know it, is unacceptable.
    That said, I don't believe that completely remaking the VA 
is the right answer either. There is an important balance 
between transforming the VA while maintaining the services and 
support that millions of veterans rely on.
    I am concerned that some of the Commission on Care's 
recommendations might in fact weaken the VA health care system. 
Much like I have seen happen with charter schools, proposals to 
funnel funding to private contractors and for profit care will 
take desperately needed resources away from our veterans, and 
should be immediately rejected.
    Shifting resources to pay for the privatization of care 
will have impacts throughout the spectrum of care for our 
veterans. In addition to reducing quality and access to care, 
it could deprive the VA of cutting edge medical research and IT 
innovation, top notch clinician training, and stifle the VA's 
critical role in responding to national emergencies and natural 
disasters.
    We cannot view expanded choice or the private sector as the 
panacea for solving the challenges the VA faces. Long wait 
times and workforce shortages impact private care, too. Care in 
the community should be locally targeted to augment, not 
supplant the VA.
    Instead of stripping additional resources from veterans 
health care our first priority should be making sure the VA has 
the staff and resources it needs. Downsizing and dismantling 
the VA in favor of sending veterans with unique health 
conditions and urgent mental health needs to navigate the 
private sector is bad policy.
    Lastly, another big concern I have is the cost associated 
not just with the recommendations made in this report, but with 
whatever solutions we agree upon that makes the VA more 
efficient and capable of providing more timely health care to 
our veterans. It is incumbent upon us to keep the promise we 
made to our veterans by ensuring they can access their first 
choice for care, and to defend the rights and work place 
protections of the 114,000 veterans who work at the VA, and 
their coworkers, who serve veterans everyday.
    Again, I appreciate the work that the Commission on Care 
has done over the past year, and I look forward to hearing your 
testimony today. And thank you, Mr. Chairman. I yield back the 
balance of my time.
    The Chairman. Thank you very much. Members, as I mentioned 
earlier joining us on our first and only panel this morning is 
Ms. Nancy Schlichting, the Chairperson of the Commission on 
Care, and the Chief Executive Officer of the Henry Ford Health 
System; and Dr. Delos Cosgrove, better known to many of you as 
Toby, the Vice Chairperson of the Commission on Care and the 
Chief Executive Officer of the Cleveland Clinic. I appreciate 
both of you being here with us this morning. And again, for all 
of the hard work and many hours that you put into the work of 
the commission. I understand that you are both going to be 
presenting oral testimony this morning, just as you both had 
provided written testimony. With that, Ms. Schlichting, we will 
begin with you. You are recognized for five minutes. And I will 
tell you that if you do go over and the red light starts 
blinking, we will not gavel you down because we are anxious to 
hear your remarks. You are recognized.
    Push your mike button one more time because for some reason 
it is not picking you up.

                 STATEMENT OF NANCY SCHLICHTING

    Ms. Schlichting. Okay. There we go.
    Chairman Miller, Ranking Member Takano, and Members of the 
Committee. Thank you very much for the invitation to discuss 
the report of the Commission on Care, for your support of the 
commission over these months, and also the extension of time to 
complete our work. It has truly been a privilege and an honor 
to chair the commission charged with creating the roadmap to 
improve veterans health care over the next 20 years, and I am 
very pleased to be here today with my colleague, Dr. Delos 
(Toby) Cosgrove, the CEO and President of the Cleveland Clinic, 
who will also present after my testimony.
    For 35 years I have served in senior leadership roles in 
large hospitals and health systems, and for the last 18 years I 
have been in Detroit at Henry Ford Health System, for 13 years 
as its President and CEO. Henry Ford is an integrated health 
system with $5 billion in annual revenue and 27,000 employees 
that owns both a large delivery system as well as an insurance 
company. My experience in leading Henry Ford Health System 
through a major financial turnaround and navigating our 
organization through years of massive job loss in Michigan, 
population decline, and the bankruptcies of our city and major 
employers while still growing substantially, making major 
capital investments in our community, and winning the 2011 
Malcolm Baldrige National Quality Award have prepared me very 
well for the demands and complexity of the commission's work.
    I am proud to be here today with one of our veterans at 
Henry Ford, Spencer Hoover, who is Vice President of Planning 
and Business Development. He served as an airborne infantryman 
in the 82nd Airborne out of Fort Bragg, North Carolina, with 
two combat tours, one in Afghanistan and one in Iraq. He was 
honored with six medals and is now 70 percent disabled as a 
product of his injuries from combat and training. And Spencer, 
if you would recognize yourself?
    [Applause.]
    Ms. Schlichting. Also with me today are the commission's 
Executive Director Susan Webman and two staff, actually three 
staff, John Goodrich, Ralph Ibsen, and Susan Edgerton. John and 
Ralph are also veterans.
    Our commission was composed of 15 talented and diverse 
leaders, two-thirds of whom are veterans. Five have served in 
significant health system leadership roles, three have served 
in VA, four have been leaders in veterans service 
organizations, we had four physicians, two nurses, and even two 
lawyers. We developed several principles to guide our work, 
including creating consensus and being data driven, also 
creating actionable and sustainable recommendations, and most 
importantly focusing on veterans receiving health care that 
provides optimal quality, access, and choice.
    The independent assessment report that you commissioned was 
invaluable as a foundation for our work. It is a comprehensive, 
systems focused, detailed report that revealed significant and 
troubling weaknesses in VHA's performance and capabilities. Our 
work took place over ten months with 12 public meetings over 26 
days and we sought to have the broadest debate possible and we 
had intense debate and dialogue over the issues. But our 
unified focus throughout the process was, what is best for our 
veterans?
    I believe we have produced a very good report, strategic, 
comprehensive, actionable, and transformative. Twelve of the 
commissioners signed the report, signaling bipartisan support, 
and the three who did not had divergent views. Two felt we had 
not gone far enough, and one felt we went too far.
    The VHA requires transformation, which is the focus of our 
recommendations. There are many glaring problems, including 
staffing, facilities, informational technology, operational 
processes, supply chain, and health disparities that threaten 
the long term viability of the system. Perhaps even more 
importantly, the lack of leadership continuity, strategic 
focus, and a culture of fear and risk aversion threaten the 
ability to successfully make the transformation happen over the 
next 20 years. Transformation is not simple or easy. It 
requires stable leadership, expert governance, major strategic 
investments, and a capacity to reengineer and drive high 
performance. Some of our commissioners believed in moving VA to 
a payer only model. They believe that government cannot run a 
complex health system and that veterans should have the same 
choice that Medicare beneficiaries have. Yet we believe at the 
end of the day that VA and VHA under current leadership, 
Secretary McDonald and Under Secretary Shulkin, are making 
progress and are aligned with most of our recommendations. And 
we believe that VHA should be invested in for several reasons.
    One is the model of integrated care, much like Kaiser or 
Geisinger or even Henry Ford. The clinical quality that is 
comparable, or in some cases better than the private sector. 
The history of clinical innovation and veterans focused 
research, medical education, and emergency capacity. The 
specialty programs, especially mental health, polytrauma, 
rehabilitation rarely replicated in the private sector. The 
role as a safety net provider for millions of complex and low 
income veterans that may not or could not be filled by the 
private sector in many markets. In fact, as we have seen the 
implementation of the Affordable Care Act, it has been 
difficult in many instances to meet the access need simply 
because of the shortages of primary care physicians and mental 
health providers in many markets across the country.
    Our recommendations fall into four major categories. First, 
creating a VHA care system which fully integrates VHA, the 
private sector, and other Federal providers. VHA would continue 
to provide care coordination and would fully vet the provider 
network to ensure that veterans receive care from individuals 
who understood military competency, understood the need for 
access, transparency of their performance information, and many 
other critical criteria. We also included the fact that 
veterans should have a choice of primary care providers within 
those networks to ensure the ease of access and meeting their 
needs.
    The second category is leadership system and governance, 
again focusing on continuity and leadership development to 
ensure sustainable leadership over time to implement these 
recommendations. And we also recommended a board of directors 
to provide oversight and the expertise in health care that is 
critically needed.
    We also in the third category focused on operational 
infrastructure, information technology, facilities management, 
performance management, human resources and workforce, supply 
chain, and diversity and health care equity. And finally, we 
have a category around eligibility, focusing on the needs of 
other than honorable discharged veterans who have health care 
needs and in retrospect deserve them, and also eligibility 
design which has not been looked at in many years and probably 
would be worthy of taking a look.
    The objective of every commissioner throughout this process 
has been that our report would not sit on a shelf and that in 
fact it would be implemented. And we ask for your help today to 
make our report come to life. We ask that you provide VA needed 
authority to establish integrated care networks through which 
enrolled veterans could receive care from credentialed 
providers without regard to geographic distance or wait time 
criteria. We are asking to address the fundamental weaknesses 
in VHA governance and to provide VA more flexibility in meeting 
its capital asset and other needs, including establishing a 
capital asset realignment process modeled on the DoD BRAC 
process; waiving or suspending the authorization and 
scorekeeping requirements governing major VA medical facility 
leases; lifting the statutory threshold of what constitutes a 
VA major medical facility project; reinstating broad authority 
for VHA to enter into enhanced use leases, and easing for a 
time limited period otherwise applicable constraints on 
divestiture of unused VA buildings; and establishing a line 
item for VHA IT funding, and authorizing advanced 
appropriations for that account; and also creating a single 
personnel system for all VHA employees to meet the unique 
staffing needs of our health care system.
    I would like to amplify one very key point which other 
commissioners view as foundational. The commission saw VHA's 
governance structure as ill-equipped to carry out successfully 
the kind of long-term transformation required to reinvigorate 
VA health care. Continuity of leadership and strategic vision 
cannot be assured under a governance framework marked by 
frequent turnover of senior leadership and near constant focus 
on immediate operational needs. The commission believed that 
two fundamental governance changes were needed, establishment 
of a board of directors with authority to direct the 
transformation process and set long-term strategy, and change 
in the process for the appointment for and tenure of the 
official currently designated as the Under Secretary for 
Health.
    We are mindful that some of our recommendations have 
significant cost implications and we worked with health 
economists in modeling different options. Implicit in our 
discussions, though, has been the question, should the Nation 
invest further in VA health care system? Our report answers 
that question in the affirmative, even as it underscores the 
need for sweeping change in that system. We do not suggest at 
all that Congress has not already made very substantial 
investments in the system. Rather, we call for strategic 
investments in a much more streamlined system that aligns VA 
care with the community.
    In my judgment, our report points the way to meeting the 
central challenge Congress identified in 2014, improved access 
to care while offering a vision that would expand choice, 
improve care quality, and contribute to improved patient well-
being. It is a vision that puts veterans first. My experience 
tells me that veteran centered focus will ultimately improve 
the service veterans receive, while strengthening the system 
and providing increased transparency and accountability. In my 
view this is a vision that merits your support.
    I would be very pleased to be a continued resource to this 
Committee as you continue on your work. And I would also be 
very happy to answer any questions, as I know Toby will after 
his presentation. Thank you.

    [The prepared statement of Nancy Schlichting appears in the 
Appendix]

    The Chairman. Thank you very much. Dr. Cosgrove, you are 
recognized.

           STATEMENT OF DELOS M. (TOBY) COSGROVE M.D.

    Dr. Cosgrove. Chairman Miller, Ranking Member Takano, and 
Members of the Committee, thank you for inviting me to speak 
about the Commission on Care's final report today. As a former 
Air Force surgeon, I care deeply about the welfare of the 
Nation's veterans, and I am honored to serve as Vice Chairman 
of the Commission on Care, and as a Member of my VA Advisory 
Committee.
    Over the course of my work with the VA I have become well 
acquainted with the department and understand its contributions 
as well as its challenges in meeting our veterans' needs. As 
CEO of the Cleveland Clinic, an $8 billion health care system 
serving communities across the country and internationally, I 
am keenly aware of the magnitude of the challenges facing VA 
health care system leaders.
    Mr. Chairman, the veterans health care system must make 
transformative changes to meet the health care needs of 
veterans today and tomorrow. If these changes are not made, the 
VHA's many systematic problems threaten the long-term viability 
of VA care. The final report contains 18 different 
recommendations. Today I am going to address four specific 
areas that include the establishment of an integrated community 
based health system, quality metrics, information technology, 
specifically the electronic health records, and supply chain.
    Given the commission's charge to examine veterans' access 
to care, it was concluded early on that greater reliance on and 
closer integration with the private sector held the greatest 
promise for improving not only access, but affording veterans 
greater choice. As you know, the commission considered and 
debated options that would provide for different degrees of 
choice. The recommended option in the commission's final report 
reflects a consensus position, so many supported an option that 
would provide veterans with still greater choice of private 
sector providers. The commission agreed that the VHA must 
establish high performing, integrated community-based health 
care networks to provide timely and quality care to our 
veterans. The report envisions a continued role for the VHA 
health system, but as was said if the challenges and 
opportunities described in the final report are left 
unaddressed, we are concerned that our veterans will not 
receive the kind of high quality care that they deserve.
    Among our proposals the commission recommends that the VHA 
adopt a continuous improvement methodology, such as Lean Six 
Sigma, to engage staff and improve the culture. This will help 
but, it will also take significant investments in time, effort, 
and resources to modernize and streamline such essential 
functions as human capital management, capital asset management 
and leasing, business processes and information technology. The 
commission recommended that the VHA should implement core 
metrics that are identical to those used in the private sector. 
Veterans deserve to know that the health care they are 
receiving either from the VHA or from the community provider is 
of high quality. If these metrics are put in place, it will be 
easier to evaluate the system's performance, and Congress will 
have a benchmark from the private sector to compare both its 
progress and improvement over time. Congress and the American 
people deserve to know that the VHA is getting value for their 
investment.
    Years ago, the VHA was a leader in the field of electronic 
health records. Unfortunately this is no longer the case. 
Therefore the commission believes that VHA should transition to 
the same type of commercial off-the-shelf electronic health 
records as other providers. By using a proven product, many of 
the scheduling and building problems would be resolved. 
Further, these systems could help the VA identify areas of 
opportunity and utilization to promote better access to care 
for our veterans and promote interoperability, which is 
critical as our veterans move to different care sites.
    Finally the commercial electronic health record would also 
allow VHA to link financial and clinical information, a 
critical functionality for running a modern health care 
delivery system. The best and most prevalent commercial 
electronic health record programs allow staff and patients to 
schedule patient care easily and provide legitimate performance 
measures for wait times, unit costs, clinical care outcomes, 
and productivity that conform to those of the rest of the 
health care industry. Many of our country's best hospital 
systems have converted home grown information systems to 
commercially based systems. VHA must do the same to remain 
current and engage the rest of the health care delivery system. 
It must also have its own leadership, specifically a Chief 
Information Officer for the VHA information system that allows 
VHA to adjust its information needs as the health care industry 
evolves.
    As a VHA contractor, Cleveland Clinic has experienced 
firsthand the burdensome antiquated system that is currently in 
place to receive payments. We are required to provide 
documentation in hard copy form sent via the postal services as 
they could not accept either fax, email, or other electronic 
submissions. If a request results in more than 100 pages, we 
must burn the records to a disc. Because we do not have any 
mechanism to track whether the documentation has been received, 
we have heard on many occasions that they never received the 
paper records and we have no recourse other than to send them 
again. The independent assessment that Congress commissioned 
found that the VHA should keep claims adjudication and payment 
separate from its care delivery.
    The health care system that the commission envisions for 
the VHA will continue to expect exceptional performance from 
its network of providers and providers should expect timely and 
accurate payment in return.
    Supply chain is another area ripe for VHA streamlining. The 
commission's report stated that purchasing processes are 
cumbersome, which has driven VA staff to work-arounds and 
exacerbates the variation and process the VA pays for products. 
The VA should consolidate and reorganize procurement and 
logistics for medical and surgical supplies under one leader. 
The VHA has enough market share to leverage prices that could 
result in savings of hundreds of millions of dollars.
    At the Cleveland clinic, we are constantly evaluating and 
reviewing our supply chain products and processes. Today, our 
supply chain is working with teams of clinicians led by a 
physicians' champion to justify purchases of more expensive 
supplies by engaging clinical staff in the value-based sourcing 
effort that illustrates that cost and quality do not have to be 
mutually exclusive.
    Clinicians are made aware of the costs and outcomes are 
associated with different brands. Once the clinical staff has 
to justify the higher costs and understands whether it will add 
value to the care outcomes based on empirical evidence they 
make purchasing decisions based on value. Such efforts are then 
integrated into patient-centric utilization management and 
inventory management efforts to ensure the appropriate use of 
our resources.
    A clinician-engaged, value-based supply chain management 
practice model has allowed us to save $247 million over the 
last several years.
    We are continuing to reform our process by entering into 
purchasing consortium with other nonprofit health care 
providers and ensuring that we are continually searching for 
improvements in cost management.
    Of course, leadership is the key to transformational 
change. The Commission speaks to the need to create a pipeline 
of internal leaders and to make it easier for private sector 
and military clinical and administrative leaders to serve in 
the VHA. Market-based pay is critical to bringing in leaders 
capable of taking the VHA to the next level.
    The Commission also proposes that Congress provide VHA a 
governance board to provide a long-term strategic vision and 
successfully drive the transformation process. Both the 
chairperson and I would be happy to talk more about this aspect 
of the report.
    Mr. Chairman, transforming a system as large and as complex 
as the VHA will require streamlining multiple services, 
redesigning care delivery and more: this report offers a 
roadmap to success. Realizing the vision the report proposes 
will require new investments, both financial and in expertise, 
enactment of legislation an strong leadership.
    Thank you for your attention, and I am happy to address 
questions.

    [The prepared statement of Dr. Cosgrove appears in the 
Appendix]

    The Chairman. Thank you very much, Doctor. We appreciate 
you both being here.
    For either of you that would want to answer this question, 
do you agree with the President and the Secretaries who have 
both stated that many of the Commission's recommendations are 
already being implemented via the MyVA initiative?
    Ms. Schlichting. I think that, you know, it is difficult 
for us to really evaluate that because we are not within that 
structure at this point, but I think in terms of strategies and 
direction, I think there are many areas that are aligned, but 
it is hard to understand within that, do they have all of the 
plans that will allow that to be executed, and I think those 
are the questions that I would have.
    The Chairman. Dr. Cosgrove?
    Dr. Cosgrove. Yes. I don't think we can know exactly. For 
example, electronic medical record, we don't know, have they 
proceeded to purchase an off-the-shelf electronic medical 
record or not, which I think is absolutely imperative.
    The Chairman. And neither do we. We are still trying to 
find that question out also.
    This is something that probably other Members won't touch, 
but I will, since I am retiring at the end of this term, but 
what do you think the biggest benefit of a BRAC-like process 
within the VA would be for VHA, and also what do you think the 
big impediment would be?
    Ms. Schlichting. Just a couple of comments on the facility 
challenge I think that VA has. When we looked at the breadth 
and depth of all the VA facilities across the country, the 
average age of a physical plant is about 50 years. To give a 
comparison, at Henry Ford that is nine years, and I think 
across the country it is around ten.
    So the issues that VA will face over time in terms of their 
facilities, and also the fact that they are very inpatient-
oriented today as opposed to more outpatient-focused are really 
significant. So we think that the BRAC can provide some 
objective view and input on how exactly the VHA facility 
networks are performing today, where the problems are and where 
change needs to occur. It also could provide, much as it did 
during the military closures, you know, the opportunity for 
some objectivity and some protection from the political 
challenges.
    Closing hospitals is a very hard thing to do. I have closed 
three in my career and I don't wish it on anyone; it is a very 
challenging thing to do and particularly for Members of 
Congress who are concerned about job loss in communities that 
might happen.
    The opportunity though in health care is different than the 
military closures: there is no substitute. So the opportunity 
for jobs to be preserved in communities through more 
partnership with the private sector exists, and also the 
evaluation of other capacity within that community could serve 
veterans better with lower costs long term. So I think it is 
with that in mind that we really believe this would help the 
process.
    Dr. Cosgrove. I would just add to that. I also have closed 
two hospitals and realize how difficult that is and how 
politically entangled this is as a decision-making process. 
Also, I think there are over 220 facilities right now that are 
not in use and have not been either sold or abandoned or begun 
to be taken down because it has been unable to get that 
accomplished through the current system.
    The Chairman. And one final thing. There was a statement 
made in VA's letter to the President regarding the final report 
that indicated that VA is not in favor of eliminating the 
current Choice Program restrictions by mileage criteria and the 
time restriction of 30 days because they desire not to 
sacrifice VA's four statutory missions. I know the report 
called for a total elimination of the mileage and the time 
requirement, and I would like to ask if you could address why 
you went further.
    Ms. Schlichting. Well, as you know, Choice was a very 
difficult discussion among the commissioners because we had 
wide-ranging views around Choice. I think we felt that we had 
to find a balance because we understood the fact that there was 
the danger of weakening the current VHA system if in fact 
Choice was too broad, but what we did do is believe that those 
limitations in many cases were causing really undue problems 
for veterans and oftentimes, you know, the timing involved of 
even being able to assess some of those limitations caused 
access issues. So we felt that we were erring on the side of 
choice of primary care provider and also strengthening the VA's 
control of those networks, because if VA could set up those 
networks in a way that really created the right capacity, the 
right access without endangering the ability of VHA to continue 
their important mission, that was what we were trying to find. 
We were trying to find that sweet spot between choice and also, 
you know, the issues of maintaining a system that is critically 
important.
    The Chairman. I will go ahead and yield to Mr. Takano for 
his questions.
    Mr. Takano. Thank you, Mr. Chairman.
    You know, many of the national veterans service 
organizations are very troubled by Recommendation No. 1. They 
are concerned that instituting Choice as a core policy could 
lead to a large percentage of veterans to pursue more 
conveniently located community care, this could end up 
jeopardizing the viability of unique VA services. Your own 
economist projected a steep migration to community care.
    I have one question for you both. What analysis did you 
conduct to test how this concern may play out? And second, why 
did you not recommend pilot testing such a radical change as 
this?
    Ms. Schlichting. Well, we did actually talk a lot about how 
do you roll this out and felt that probably a phased approach 
to really test some of the assumptions was important, and there 
were many commissioners that spoke to that issue.
    You know, the execution/implementation is very complex and 
it will take time, and I think it will require, much as any 
major change does, some testing and refining and continuing to 
tweak this. But I think on the choice issue it is important to 
balance this question of choice and making sure access is 
really available within every market across the country with 
the issue of how we are trying to also control frankly, you 
know, those networks to better serve veterans. So it is really 
finding that balance that I think is very important.
    Mr. Takano. The Commission's guiding principles called for 
recommendations to be data-driven. What specific data did the 
Commission rely on in recommending that the VA health care 
system should be organized around the principle that veterans 
should be able to choose to receive care from a community 
provider even when the VA can provide the veteran timely care 
in reasonable proximity to the veteran's home?
    Ms. Schlichting. But if you begin to think of the VHA care 
system in the way that we did, it is not a question of VA 
versus provider in the community. It is one system that should 
be operating in a much more integrated way and every provider 
that is within that VA care system then would be able to 
provide access for veterans. So it is a different mind set than 
today, and I also think should be balanced against all the 
investments in improving operations that we are recommending 
within the VHA.
    Mr. Takano. As you know, the VA health care system is 
necessarily very transparent when it comes to wait times and 
health outcomes. How does the Ford Health Care System and the 
Cleveland Clinic measure wait times? Do those health care 
systems or for that matter any private health care system post 
wait times publicly and, if not, why not?
    Ms. Schlichting. We actually do now. We have an electronic 
system where people can call in to clinics and find out wait 
times for that day for same-day access. And the other thing we 
have really changed is the whole notion of access. We now 
believe that same-day access not only for primary care, but 
specialty care is a standard that we are setting for our health 
system.
    Dr. Cosgrove. And ten years ago we instigated the same-day 
access. We now see 1.1 million same-day access for our patients 
and the waiting time in the emergency room from door to doctor 
is ten minutes.
    Mr. Takano. So would you expect, therefore, private 
providers participating in this system in an integrated network 
to be held to the same wait time rules and requirements as the 
VA?
    Ms. Schlichting. Yes.
    Dr. Cosgrove. Yes.
    Mr. Takano. So I am also concerned about your 
recommendations to expand Veterans Choice to all veterans 
regardless of the days waiting or distance, I am concerned that 
it is financially unsupportable and might in fact weaken the 
VA's health care system and perhaps significantly increase the 
share of veteran's care provided outside the VA. Did the 
Commission look at the costs of these recommendations and how 
this might affect the vital research and education missions 
that the VA conducts for the good of the Nation?
    Ms. Schlichting. We did look at cost, and we have included 
estimates in our report around what we think that would mean; 
it is hard to know, though. I will tell you, there are certain 
assumptions as you go into these cost estimates that are based 
on, you know, certain assumptions that may or may not actually 
come true.
    And part of the question is how rapidly can some of the 
improvements in operations to improve access within VA be put 
in place, because it is quite conceivable that more patients 
would gravitate to VA for many reasons, as opposed to always 
assuming that they are going to go in the private sector. It is 
not as clear as some people would like it to seem.
    Dr. Cosgrove. And I would point out on that last point that 
there are a number of veterans who currently do not get the 
care from the VA, if the VA improved its access and improved 
its ability to take care of them that they would migrate to. 
There are 22 million veterans across the United States, only 
six million get some care from the VA. And so the assumptions 
are very difficult to project.
    Mr. Takano. Okay, thank you.
    Mr. Chairman, my time is up.
    The Chairman. Thank you very much.
    Mr. Lamborn, you are recognized for five minutes.
    Mr. Lamborn. And thank you, Mr. Chairman, for having this 
important hearing. I want to thank the Chair and Vice Chair of 
the Commission for appearing before us today, and for the time 
and effort they have put into this report.
    We have two main challenges today, as I see it. First, how 
do we at least ensure that we take what is good in the report 
and make a reality. One hundred and thirty seven previous 
reports on VA health care have already been presented and are 
sitting on the shelf gathering dust.
    Second, and this is maybe an even harder challenge, to 
evaluate whether the proposed recommendations go far enough. We 
like to use words like transformation and reform, but how 
willing are we really to challenge the status quo and consider 
bold reform.
    We all remember the managerial failures of 2014 that came 
to light; the inconsistent care, the manipulated data and other 
manifestations of dysfunction. And we also remember the words 
of the independent assessment in 2015, which found that the 
VHA's systematic problems demanded, quote, ``far reaching and 
complex changes that when taken together amount to no less than 
a system-wide reworking of VHA,'' unquote.
    So when will we have a system-wide reworking of the VHA? I 
have a hundred thousand veterans in my congressional district, 
and I will say that the calls they are giving complaining about 
VA service haven't diminished and are about the same as it was 
a couple of years ago before we tried to make and the VA tried 
to make some changes. They don't believe that things have 
substantially changed for the better.
    With that, Mr. Chairman, I ask unanimous consent that the 
Commission report dissent from Commissioner Hickey and 
Commissioner Selnick be entered into the record.
    The Chairman. Without objection.
    Mr. Lamborn. That is one perspective I think we should look 
at on an opportunity for transformation.
    Dr. Cosgrove, I would like to ask you a question about the 
quality of VA health care. According to the report, quote, 
``Care delivered by VA is in many ways comparable or better in 
quality to that generally available in the private sector,'' 
unquote. However, the independent assessment found, quote, ``on 
most majors veteran-reported experiences of care in VA 
hospitals were worse than patient-reported experiences in non-
VA hospitals,'' unquote.
    Is VA care better than the private sector, the same or 
worse? I know that is a very broad question, but it is a very 
critical question.
    Dr. Cosgrove. It is very difficult to answer that. There is 
only a handful of comparative studies that have been published 
comparing the two care; some of them suggest that it is better, 
some of them suggest that it is not equal or not as good as. 
And I think part of the problem is that they have not been 
reporting the same as reported in the private sector, and one 
of the suggestions that we made and so that you begin to 
compare the quality is that you have exactly the same metrics 
as reported in the private sector.
    For example, the Society of Thoracic Surgeons reports the 
mortality rates and morbidity rates of cardiac surgical cases 
and thoracic surgical cases across the country, the VHA is not 
a member of that and does not report its--that is not to say 
that it is better or it is worse, they just don't report.
    Mr. Lamborn. Okay. I mentioned earlier that Commissioners 
Hickey and Selnick signed a dissenting letter. What 
accommodations were made to their views, if any?
    Ms. Schlichting. Well, both of them participated in all of 
our discussions and had the same opportunity as everyone to put 
their ideas forward, which they did. And at the end of the day, 
we built a consensus around the report recommendations, which 
12 of the commissioners approved, and their dissent opinions 
were included on the Web site as well.
    But, you know, with all due respect, neither Stewart Hickey 
nor Darin Selnick have ever run a complex health system and to 
say that what we are proposing is not transformative, I think 
is a complete un--it is just not true. The integration process 
of creating a VHA care system is a significant transformative 
process that will take many, many years to complete. 
Recognizing the complexities of both facilities and staffing 
issues and leadership, and all of the components that we 
included in our report, as well as IT interoperability to allow 
that to take place is very transformative. Neither of those 
individuals have ever implemented a major change in a health 
system as Dr. Cosgrove and I have, and I think we recognize the 
transformative aspects of what we are proposing.
    Mr. Lamborn. Thank you, Mr. Chairman.
    The Chairman. Ms. Brownley, you are recognized.
    Ms. Brownley. Thank you, Mr. Chairman.
    And I want to thank both of you for your time and 
commitment on putting this roadmap together. I know it is an 
inordinate amount of time that you have put in and, quite 
frankly, all the commissioners, so I just want to thank you for 
it. And there is much to it that I like very much, and I think 
it is critically important that we have a clear roadmap by 
which we can base a discussion. I think this is really the most 
important discussion this Committee needs to undertake, is that 
we need to figure out what the transformation is and what it is 
going to look like for now and into the future.
    And I clearly believe that community partnership with the 
VA is part of the solution. Particularly for primary care and 
some specialty care, I think that partnership is critically 
important. I think there are some services that the VA provides 
that the community can't provide. And so that partnership I 
think it is really important. And I think as we talk about 
this, you know, to me, I see it sort of in a sliding scale and 
where is exactly, you know, the sweet spot in terms of what 
that partnership really means going forward.
    So I really, really do appreciate the report very much and, 
Mr. Chairman, I hope that we will spend a great deal of time 
having future discussions on this until we can all come to, I 
think, a consensus in terms of moving forward.
    I wanted to ask, you know, a very specific question 
relative to the report, because it certainly affects my 
district. In my county that I am very close to the L.A. medical 
facility, West L.A. Medical facility, which is a huge facility, 
and thank you, Mr. Chairman, for your leadership on moving 
forward with the West L.A. facility. But my veterans also are, 
by mileage are close enough to the facility, but by traffic and 
getting there, you know, it can take a day to have a visit.
    And so we are working hard to try to expand our VA facility 
within the district, it has been authorized and so forth, but 
the way the VA does their leasing arrangement, and you are 
probably aware of this, is the way the CBO accounts for it 
makes it very difficult for us or anyone to approve the 
resources when you are counting a 20-year lease or a 30-year 
lease all up front.
    So I am just wondering, I actually have a bill that is 
called Build a Better VA Act, but what my bill would do is to 
sort of harmonize the way the VA does this, the way General 
Services does this for other Federal facilities, so that we can 
break down this barrier the way CBO is scoring it. Do you have 
any comments relative to that or did you discuss that at all?
    Ms. Schlichting. Well, probably not specifically, but I 
will say that around the facility questions, there was a 
tremendous desire on the part of our commission to simplify and 
make things more agile for people leading these health care 
facilities today.
    As you know, health care is changing dramatically. There is 
probably as much change taking place today in the delivery of 
care as we have seen in 50 years, rapid changes in terms of 
technology, and where care can be delivered safely and 
effectively, and the ability to really create those access 
points from an outpatient facility standpoint. You know, at 
Henry Ford, we continue to build more outpatient care all the 
time. I mean, it is a constant effort to keep up with those 
access needs. And for the reasons you mentioned, that is one of 
the reasons we took out the time limit and the distance, 
because every market is different and sometimes you are 
actually having huge barriers that are unintentional just 
because of the way that market might function.
    Ms. Brownley. I think that is also really important as we 
look at this that we have to really look at each sort of area 
and community and region, because everybody is going to have 
very different needs.
    And what about in terms of this vision and roadmap, where 
does telemedicine fall into all of this?
    Dr. Cosgrove. I think telemedicine is a very integral part 
of it, and the VA has taken a very nice lead in many of the 
aspects, particularly looking after chronic disease. We think 
that this is going to be something that will be ubiquitous 
across the country, and will greatly eliminate the need for 
traveling great distances.
    As you stop and think about the health care system in the 
United States, it was developed at a time when there was not a 
lot you could do for people in the hospital, and very poor 
transportation; now there is a lot that you can do for people 
and great transportation. And added on top of that is virtual 
visits, which are going to reduce the travel and the access, 
and improve the access enormously, particularly in areas of 
chronic disease.
    So we are moving ahead very very fast on that as the VA has 
taken a nice lead there.
    Ms. Brownley. Thank you.
    Ms. Schlichting. The only thing I would add on that point 
is that there is also a lot of digital health development going 
on today where patients themselves can self-monitor and report 
information, communicate differently, and that is, I think a 
great frontier as well.
    Ms. Brownley. Thank you very much and I yield back.
    Dr. Cosgrove. Could I just add just one thing? You know, 
going back to the electronic medical record, once you have a 
commercially available electronic medical record it allows you 
to make your appointments yourself on your electronic medical 
record, and that electronic medical record should be available 
to all patients. And so you have to begin to engage the 
patients and one of the ways to do that is through the 
electronic medical record.
    The Chairman. And I do want to salute the VA with the new 
person in charge of IT with LaVerne Council, I think she gets 
what is necessary and I hope that that progression will 
continue.
    Mr. Bilirakis, you are recognized.
    Mr. Bilirakis. Thank you, Mr. Chairman, I appreciate it. 
And I thank the panel for their testimony. Thank you for all 
these great suggestions.
    What do you think is a realistic timeframe for the large-
scale transformations that the Commission's report calls for, 
assuming that the VA is already implementing some of the 
recommendations they claim they are making? When do you think 
veterans should expect to see meaningful change in the care 
they are receiving in terms of quality and access?
    Ms. Schlichting. I think realistically, we are looking at a 
five-to-ten-year transformation process, but I also think that 
any time you go through that, you are looking for those early 
wins, those things that veterans can see quickly that improve 
their patient care experience. So there are some things, 
particularly in the area of technology, and certainly just 
customer service aspects that can be improved very quickly to 
help veterans feel more confident in that change process.
    Mr. Bilirakis. Very good.
    Dr. Cosgrove?
    Dr. Cosgrove. Yeah, could I just add that I had an 
experience with changing the culture of the Cleveland Clinic 
and it took me five years, and that organization was only 
80,000 individuals, and something that is as large as the VA, I 
think is going to take even longer.
    Mr. Bilirakis. Thank you. Again, building on that, what 
benchmarks should we be looking for as the VA implements these 
recommendations, and do you believe the VA has the capability 
and foresight to track the relevant data?
    Ms. Schlichting. Well, I think much like Dr. Cosgrove does 
at the Cleveland Clinic and we do at Henry Ford, we have a 
balanced scorecard, if you will, that provides data on a very 
regular, frequent basis that focuses on our patient-engagement 
scores, our employee engagement, the clinical quality outcomes. 
All of the metrics that Dr. Cosgrove referenced that are 
comparable to the private sector should be available, I think 
in a transparent way for people to assess the quality, as well 
as the service provided in each VA facility.
    So I think that level of transparency and having a 
scorecard that focuses on regular accountable results is very 
critical in this process.
    Dr. Cosgrove. For example, we report almost a hundred 
quality metrics to the Federal Government on an annual basis 
and in fact we have quarterly scorecard meetings with all of 
our department heads going over all of these, the metrics, and 
I think you have to be a completely data-driven metric 
organization in order to achieve these transformations.
    Mr. Bilirakis. Thank you. Understanding that not just one 
solution will solve all of the agencies shortfalls, if you had 
to identify to single best--the biggest problem, the biggest 
problem, what would that be affecting the VA health system, and 
what is the solution to that problem? The single biggest 
problem; I know there are several.
    Ms. Schlichting. You know, I think all of us felt that this 
truly is a systems-oriented approach, that many of the 
recommendations are interdependent, but if I were to put one on 
the table, I would talk about leadership sustainability, 
because it is virtually impossible--I mean, Toby has been at 
the Cleveland Clinic how many years?
    Dr. Cosgrove. Thirteen.
    Ms. Schlichting. Yeah, yeah, and both of us have served in 
CEO roles at 13 years in our organizations. When you have 
turnover in the under secretary position every couple of years, 
it is very difficult to sustain change, and I think that really 
is holding back the kind of transformative work that 
potentially could happen and obviously needs to happen.
    Mr. Bilirakis. Would you agree, Doctor?
    Dr. Cosgrove. Well, I would say that it is one thing that 
you can do rapidly that will change the organization, and that 
is the electronic medical record. I mean, that can be done in a 
short period of time. The rest of the transformation is going 
to be much longer.
    Mr. Bilirakis. Thank you very much.
    I yield back, Mr. Chairman.
    The Chairman. Ms. Kuster, you are recognized.
    Ms. Kuster. Thank you, Mr. Chairman.
    And thank you for being with us today. This is a critically 
important report and certainly at the heart of what our role 
is, so we appreciate the time that you both have put in and 
your wisdom.
    I want to dive right in. I spend a great deal of time with 
my veterans and visiting our clinics and hospital during the 
August district period, and you talk about data-driven and I 
agree with you, I just want to point out one example of an 
unintended consequence that we face, many of us around our 
districts, and that is with regard to the heroin epidemic that 
is threatening the country. What we discovered and this is 
broader than the VA, but that the use of quality metrics with 
regard to bringing down the pain surveys, bringing down the 
numbers, inadvertently incentivized physicians to push opiate 
medication, which then led to high rates of addiction. We have 
a wonderful project at the White River Junction VA, Dr. Julie 
Franklin, getting out in front of this with our veterans and I 
met with a number of them, using alternative remedies for pain 
maintenance, pain medication, including acupuncture, yoga, all 
these different criteria.
    And I just wanted to see if you would comment both on the 
risk of being so data-driven that you have unintended 
consequences, but also your view on alternative remedies within 
the VA system.
    Dr. Cosgrove. Yeah. Well, I don't think there is any 
question that this measurement of pain as part of the HCAP 
scores did lead to increased use of opiates.
    Ms. Kuster. And the good news is we did change it, by the 
way.
    Dr. Cosgrove. Yes, I know that you did, and we were 
instrumental and pushing hard to get that done.
    Ms. Kuster. Thank you.
    Dr. Cosgrove. But I think that it is--again, the opiate 
problem is multidimensional and it is going to require a lot of 
creative thought. I think certainly other alternatives are 
going to be part of it, also I think education and expectations 
of patients is going to be an important aspect of beginning to 
change that. But this is an epidemic, in Ohio it is a huge 
epidemic.
    Ms. Kuster. Yes, you have been very hard hit.
    Mr. Coffman and I have a bill that we are hoping to get 
attached as an amendment that would provide a pilot project for 
VAs to do this type of alternative remedies for pain 
management. We have had a reduction at this one hospital, 50 
percent on opiate prescriptions, and I got to tell you, the 
one-on-one conversations I had and the quality of life for 
people whose lives have been turned around. So I just wanted to 
bring that one up.
    Dr. Cosgrove. Congratulations. I think that is a great 
piece of work.
    Ms. Kuster. Good, thank you.
    And the other one is, you talked about the safety net 
provider and I think that is an important consideration that we 
can't lose sight of. Many times as I visit our veterans 
facilities it is the lower-income veterans who don't have 
access to private care, they don't have access to private 
insurance; this is their provider of choice. And you mentioned 
about a shortage of primary care and mental health 
professionals. I know my colleague Mr. O'Rourke in El Paso will 
discuss that, but we also have a bill about physician 
assistance coming out of our military, and I just welcome your 
thoughts on that approach where we can sort of grow our own and 
use the skill set of veterans coming out of our military, great 
experience, and how we could put that to work to reduce the 
shortage of providers.
    Dr. Cosgrove. Well, I would say that the military provides 
a tremendous workforce for health care. We have hired over a 
thousand veterans in the last five years, because we recognize 
that they are highly trained, experienced, and they have a 
great culture that they bring to us.
    Ms. Kuster. Great work ethic.
    Dr. Cosgrove. Great work ethic. And we are delighted to 
have them and we actively recruit both nurses and physician's 
assistants coming out of the military and go to the bases to do 
that.
    Ms. Kuster. Great.
    Ms. Schlichting. And I would just add, I think the concept 
of growing your own is very important within the VA system, 
because the dedication of the veteran workforce is incredible, 
and an opportunity I think to really leverage that makes a lot 
of sense. And we are looking at similar issues around growing 
our own in areas we simply can't find the talent that we need.
    Ms. Kuster. Great. Well, thank you for your good work.
    And thank you, Mr. Chair, for indulging a shameless 
promotion of my two bills left to be attached as amendments to 
going forward. Thank you.
    The Chairman. I understand you did a field hearing in 
Aurora, Colorado about--
    [Laughter.]
    Ms. Kuster. And it was excellent, it was great work. I want 
to thank my Chair.
    The Chairman. Thank you.
    Dr. Roe, you are recognized.
    Mr. Roe. Thank you, Mr. Chair.
    And I want to start out by thanking the Committee that put 
this together, it is a remarkable piece of work. Thank you for 
taking the time away from your shops, all the Committee 
Members. This is probably the most important piece of work I 
have seen in my almost eight years here in Congress, which 
could really make a difference if we could implement this.
    And during the convention, instead of spending most of my 
time politicking, I spent an afternoon at the Cleveland Clinic 
and certainly, and I want to talk about BRAC in a minute, but 
the way you evaluate your needs is you build the needs to the 
modern health care system, and the entire health care system is 
undergoing radical changes in the U.S. right now, a shifting 
from the concrete silos to outpatient, more and more surgery. I 
mean, a hundred-bed hospital today can do what a 500-bed 
hospital did 30 years ago. I think the VA is still stuck at the 
500-bed.
    A couple things. Let me just summarize what I have heard so 
far. One, I believe that to move this system forward we need an 
integrated care model that involves the private sector and the 
VA sector in primary care; and, two, Dr. Cosgrove you pointed 
out that to have an electronic health system that is 20th 
century. I think that we had this debate sitting right here, I 
remember this, three years ago where DoD and VA tried to make 
these two antiquated systems interact and they could not. I 
mean, I have been all over the place trying to see how these 
experiments failed.
    A modern system solves a lot of the scheduling problems, 
payment problems, data problems that you talk about right now. 
They have done a remarkable job of working around these 
problems, but there is new technology out there and the DoD 
made that decision. The VA sat right there and tried to 
convince the DoD to put in a 30-year-old or 20-year-old system 
and they didn't do it, they went ahead and took it off the 
shelf. So I think that would be something they need to do. That 
solves your supply chain, all those things we talked--it 
doesn't totally solve it, but helps solve it.
    And lastly, I think is the BRAC. And it may be my last term 
too, but you can vote for the BRAC and the gas tax, and you 
probably won't be here can. But I think we have to sit down and 
evaluate what those assets are and where you can get the best 
care. If the best heart surgeon is the Cleveland Clinic, it is 
about providing the best care for veterans. I think that is 
what this is all about; not sustaining a bureaucracy, but 
providing the best care and where that care can be given most 
cost-effectively.
    So I admire what you have done. And to say our Committee 
has not provided the resources for the VA, when I came here in 
2009 we spent about 95, $97 billion on all VA care, cemeteries, 
disability and health care. Today it is 165 billion without 
choice. I would say that Congress has done a job, it is just 
that--and we have gone from 250,000 employees to 330. And in 
the private sector you have had to figure out how to do it more 
efficiently with less people, because your revenue, I promise 
you, has not been going up like it did, you had to better 
manage. So I commend you for that.
    And my last question I want, do you think if we can come to 
the consensus those four things I have pointed out, and it 
won't be easy, and we pass it, do you think the VA can carry it 
out? And I know that you said, I hate to put you on the spot, 
but you pointed out that leadership is the key for 
transformational change; is that leadership there?
    Ms. Schlichting. You know, I think leaders get better over 
time also. You know, the current leadership has been in place a 
very short amount of time actually and have, I think, made some 
progress in key areas and have set the right tone for improving 
access. But I also think they need some time and it is hard to 
judge whether that can happen unless there are sustainable 
leaders in place, which is why we recommended the idea of five-
year terms for the under secretary, and having that individual 
actually selected by the board of directors, so that that 
process can move forward and that individual feels the support 
of a group of people that are really trying to move 
transformation forward.
    I recognize that that may be unconstitutional. There may be 
ways around that that can help with oversight, but--
    Mr. Roe. That hasn't stopped us from doing a lot, the 
Constitution hasn't--
    [Laughter.]
    Mr. Roe [continued]. --before, but the question is do you 
think we can? Because I think this is a remarkable document, 
and I think it has a chance to put veterans and doctors back in 
charge of their care and not a system. And I just wonder if you 
think we can do it, because if you could, I think you would 
truly transform the health care system that veterans receive.
    Dr. Cosgrove. I think it is going to take time and this is 
not going to be quick, this is going to be incremental, and it 
is going to take continuing change of a very big system.
    Mr. Roe. I think the key one is making a decision on the 
EHR. I think that that one is one that begins to solve a lot of 
these other problems you are trying to do with different 
software systems now that don't work well together.
    Dr. Cosgrove. I think, you know, I would just say one other 
point to move to that. You know, we have and many people around 
the country have learned that you can't maintain an electronic 
medical record in an individual facility, it is moving too 
fast, and that is why the commercial aspect of this has kept up 
with the changes and made them uniform across the country. So I 
think it is absolutely imperative.
    Mr. Roe. Okay. Thank you, Mr. Chairman. I yield back.
    The Chairman. Mr. O'Rourke, you are recognized.
    Mr. O'Rourke. Thank you, Mr. Chairman.
    I would also like to thank the Chair and Vice Chair for 
their work and the sacrifice of their time, and frankly their 
commitment to their day jobs in order to be able to fulfill 
this commitment to the veterans in this country and to the 
American people. And I really appreciate the way in which you 
conducted the review and made the recommendations. And so I 
just want to add my thanks to all my colleagues'.
    I would like you to discuss what I think is the most 
pressing crisis facing our veterans in the VA and the single 
greatest unmet need right now in the system, and that is the 
tragic number of veterans who are taking their lives every day 
in this country. The new estimate from the VHA after looking at 
data from all 50 states is that it is 20 veterans a day who are 
taking their lives. I think that is the single greatest 
opportunity to stop these preventable deaths, if we take this 
seriously, confront it and organize to provide far better care 
than the care that is being delivered to veterans right now.
    As I hope you remember from our discussion, in El Paso, 
because of the high number of veteran suicides, the inability 
for too many veterans to be able to see a mental health care 
provider, never mind the wait time, originally estimated at 14 
days, we now know it is over two months on average, but a third 
of veterans in El Paso couldn't get in at all. That has 
prompted us to propose a solution in El Paso that we are trying 
to pilot right now to focus VA care specifically, that care 
that is delivered in-house on those conditions that are unique 
to service or combat, and PTSD, traumatic brain injury, 
traumatic amputations, military sexual trauma, there is a long 
list of these, that I believe we want someone who knows how to 
treat veterans, perhaps only treats veterans and active duty 
servicemembers, knows the things to look for, the questions to 
ask, the treatments to prescribe. Is there a way to resolve 
that idea with this idea of a network where you do leveraged 
capacity in the community? And for those conditions perhaps 
that are not connected to combat or service we prioritize 
community care, but for those conditions that are unique to 
that experience of being a veteran we make the VA the center of 
excellence for the treatment of those conditions.
    I would love to get your take on that idea.
    Ms. Schlichting. Actually, we agree with that. The 
recommendation that we put forward really focuses on those 
unique capabilities of VHA absolutely being supported, invested 
in, continue to grow and develop, because it has been shown, my 
understanding is that it has been shown that those veterans 
that actually seek care within the system end up with a much 
lower suicide rate, because they are being managed, their care 
is being managed and they are in touch with health 
professionals who provide that kind of support on a daily 
basis, which is really critical for those types of needs.
    But unfortunately it is how do you embrace and get people 
into the system who otherwise may not be willing to go there, 
and I think that is one of the challenges. And you are right 
about the fact that in the private sector doesn't mean that 
people are well equipped to handle the complex mental health 
needs of veterans. In fact, in many cases we have the same 
problems, if not more acute problems of having enough mental 
health providers in our community today.
    Dr. Cosgrove. And I would just say that I think there are a 
couple things that begin to recognize what Nancy's last comment 
was, is the shortage of mental health providers. Increasingly, 
I think you are going to see virtual visits begin to augment 
the shortage and help the shortage of mental health providers, 
and similarly group visits and group therapies for those 
individuals, and we have found both of those to be very useful.
    Mr. O'Rourke. You know, I think as long as we can 
prioritize that excellence in care around those conditions, 
especially those that could potentially lead to veteran 
suicide, and are able to reduce the number of veterans who take 
their own lives, improve outcomes, improve access, I think the 
system that you are proposing makes all the sense in the world.
    We learned this summer that the VHA has 43,000 positions 
that are authorized, have the funds appropriated for, but are 
un-hired today, and we are fools to believe that we will ever 
hire all 43,000 of those. So let's prioritize within the VA on 
those areas where we can do the most good, make the greatest 
positive difference for those veterans, and for me that is 
clearly mental health and reducing the number of veteran 
suicides.
    And then we face another issue, which you raise, which is 
how do we produce enough doctors in the country generally to 
ensure that we have capacity for veterans in the community. But 
I think if we can leverage the two, what we should do really 
well in the VA with what exists in the community today and 
follow our Ranking Member's lead in creating more graduate 
medical education positions, then I think we are going to be on 
the path to fixing this.
    So my time is up, but again thank you for your work on 
this, I am really grateful for the effort.
    The Chairman. Dr. Benishek, you are recognized for five 
minutes.
    Mr. Benishek. Thank you, Mr. Chairman.
    Well, I thank you so much for the great work you did. I 
don't know exactly where to begin with all the things that have 
come up today.
    And the two things that strike me from your testimony and 
your answers to many of the questions is, Ms. Schlichting, your 
comment about the leadership and how critical that is to 
transforming the VA. Having not so much a political appointee 
at the head, but having a board of directors like a regular 
hospital, like a regular system that, you know, people are on 
the board, I was on a board, and then a continuity of care over 
a period of time so that these things can be developed, I think 
that is critical.
    I think it kind of behooves us to make that happen and I 
see that as a challenge to this Committee to take the bold 
steps necessary to basically implement your plan. I don't want 
to say I agree with everything, but if we don't do this we are 
going to be faced with 30 more years of the same thing we have 
been doing now, and I think that is the critical takeaway from 
this very important commission's work.
    And the thing that you said, Dr. Cosgrove, the other thing 
I take away from this is the critical need for an IT system 
that makes sense. I mean, to me that is your testimony from the 
two of you is leadership and immediate action on an IT system 
which, you know, really can be changed.
    I just want to bring up a question that always bugs me and 
that is, when you estimate the cost of implementing these 
things, how did you estimate the costs of the VA care? Because 
when we try to figure out what it actually costs the VA to see 
a patient, you know, in the private sector we know what it 
costs to see a patient, all right? But the VA doesn't do that. 
How did you estimate that? Because we haven't been able to get 
a figure on that.
    Ms. Schlichting. Well, let me just say that one of the 
things I think that probably struck all of us that are in the 
health care industry was how little focus on cost VA has. And 
that was sort of shocking because we live in a world where we 
have to constantly focus on costs per unit of service, costs 
for, you know, a full episode of care over time, creating, you 
know, population health management techniques so that we in 
fact can understand cost and whether we are contributing to 
value and improvements in quality, and that doesn't exist today 
within a budget-oriented VA system, and I think that is one of 
the challenges as we looked at this cost question of how we 
move forward.
    So I think one thing that probably should have been in the 
report that wasn't was this notion of getting more cost-
oriented in terms of some of the metric around performance.
    Mr. Benishek. Well, that is my frustration here, is what 
does it cost the VA to see a patient, there is like no clue.
    Ms. Schlichting. Yeah. And in fact, if you look at the 
model, I mean, and look at what is changing in health care 
today, you know, we are getting away from the volume-oriented 
kind of measures. We are trying to focus on outcomes of care, 
you know, clinical results, as well as are we making a 
difference in terms of just the efficiency of care that we 
provide.
    So it really, I think this is part of the transformation. 
And Dr. Cosgrove pushed very hard on this during our 
deliberations of how do we get metrics that are more comparable 
so that in fact we can determine the effectiveness of the VA 
system over time. But I would add that I think, you know, if 
you view this in phases, there are ways to test some of these 
assumptions and begin to look at those cost elements that could 
be projected out over time so that you can really see.
    The other thing is this issue around facilities. If all the 
facilities had to be replaced versus creating this integrated 
model, there is a lot of potential cost savings and cost 
mitigation over time that I think would help.
    Mr. Benishek. Well, the only thing further I want to bring 
up and it is related to the status quo of the VA, now one of my 
big complaints is that working there, I had very little input 
as to how things worked in my clinic or in, you know, making 
sure that things ran efficiently. It seemed like others who 
weren't really involved in the patient care were making the 
decisions as to, you know, how many staff to have, how to make 
the staff flow, you know, I mean patient flow and all of that. 
So I think that would come with the leadership changes.
    But is there any other comment that you would like to make 
on that, Dr. Cosgrove?
    Dr. Cosgrove. Yeah, I just think that you need to bring 
physicians more into every aspect of delivering care and 
running the organization. I gave the example of purchasing, 
previously physicians were not involved in that; we found 
tremendous efficiencies by bringing them in. And without 
involving physicians in the leadership of the organization, I 
think you are missing an intellect and a set of knowledge that 
is necessary to have a high quality organization.
    Mr. Benishek. Thank you very much for your work, and it is 
up to us to get this show on the road.
    The Chairman. Thank you, Doctor.
    Miss Rice, you are recognized.
    Miss Rice. Thank you, Mr. Chairman.
    Would either one of you want to be the Secretary of the VA 
by any chance?
    [Laughter.]
    Miss Rice. Just out of curiosity.
    Dr. Cosgrove. I had that opportunity, thank you.
    Miss Rice. So I just want to echo some of the comments that 
Mr. O'Rourke made. We recently had a veteran take his own life 
in the parking lot of the Northport VA, which is so disturbing, 
and so I couldn't agree more with Mr. O'Rourke about this being 
such a top priority for the VA to handle.
    I also totally agree with Dr. Benishek that the two issues 
in terms of accountability and the electronic health system, 
records system, are critically important. I mean, every single 
hearing that we have, the number-one issue that we talk about 
is accountability, whether it is for how whistleblowers are 
treated by higher-ups, wait times, the enormous cost overruns 
for construction projects, you know, the list goes on and on 
and on.
    And it seems to me, Ms. Schlichting, if you could just 
address the whole issue of how you would create a more 
effective hierarchy. The board of directors, how would they be 
chosen? Why do you say that the Under Secretary of Health 
position should be one that has a fixed time limit versus the 
Secretary, somewhat similar to the head of the CIA and the FBI, 
right, that have set times?
    I mean, if you could just talk more about that, because to 
me, I mean, I don't know if that will get to changing the 
underlying culture of the thousands of employees who are under 
the Secretary and the Under Secretary, but if you could just 
talk a little bit more about that.
    Ms. Schlichting. Sure. Well, first of all, culture starts 
at the top. There is absolutely no doubt in any organization 
that the tone that is set and the way it is deliberately 
carried out every single day in decisions, in reaction to 
things, in how, you know, leaders respond appropriately to the 
needs of an organization, I think is very, very important.
    And as we look at the VA and you have again someone who is 
really running the health system, obviously the Secretary is 
responsible for all of the veterans functions, but the health 
system, at least the way we understood it, is run by the Under 
Secretary of Health from a, you know, operational standpoint, 
and yet that position has turned over repeatedly. And so the 
ability to set that tone and follow through on a whole host of 
strategic initiatives and making decisions on a daily basis 
gets cut off and then the next person comes in. And it is very 
hard for an organization other than to hunker down and sort of 
wait for the next leader, it is very hard for an organization 
to embrace those kinds of changes.
    The reason the board is in our view very important is, 
first of all, the board stands behind that individual and helps 
them be better. They are there for a broad base of input, 
expertise, again that level of accountability, which happens on 
a more regular, routine and organized basis. So that board 
sitting there saying, you know, we thought this was your 
strategic plan, it is not to usurp Congress, but it is to get 
that performance up. Congress ultimately is responsible, has 
the power of the purse, and all of the other aspects of your 
authority, but the idea is to bring some health care expertise 
in and other leadership to engage that CEO on a regular basis 
to make the kind of changes that are necessary.
    Miss Rice. Thank you.
    Dr. Cosgrove, the electronic health records, just what has 
been the problem within the VA in terms of addressing that 
issue?
    Dr. Cosgrove. The VA started out by developing one of the 
first and best electronic medical records, and over time, I 
think they suffered from the same problem that Massachusetts 
General Hospital did, Johns Hopkins, Mayo Clinic, Henry Ford, 
that they could not keep up with the changes that were needed 
across the organization. And so there are now 130 versions of 
that electronic medical record across the system, and that has 
fallen behind in its capabilities, and also has not added the 
sort of capabilities that you now see commercially available. 
And it is time to do the same thing that many other 
organizations have done, and abandon the homemade project 
simply because there is not enough IT expertise within the 
organization to keep updating it.
    Miss Rice. Right, right.
    Well, I want to just echo what everyone, every Member of 
this Committee has said, which is to thank both of you for 
really your Herculean efforts, and my hope is that all of us 
here are going to be able to see the wisdom of your report and 
begin to implement it in a way that is not partisan at all, 
because the bottom line is giving the kind of health care to 
the men and women who served this country that they deserve. So 
thank you very much.
    And thank you, Mr. Chairman.
    The Chairman. Thank you very much.
    Mr. Coffman, you are recognized.
    Mr. Coffman. Thank you, Mr. Chairman.
    And thank you both for your tremendous work on this, it is 
just incredibly important. I am looking at Recommendation 10 
when you talk about changing the culture of the VA and it is 
such a corrosive culture. I mean, if we look at the appointment 
wait times scandal where appointment wait times were 
manipulated to bring them down by denying veterans care and 
maintaining these secret waiting lists so people could get cash 
bonuses, I mean, number one, nobody was ever prosecuted for 
that, and it was systemic, and number two, nobody was even 
asked to give back their bonus.
    And so when you have a system where it literally takes an 
act of God to fire somebody, and where it seems like the only 
people who are disciplined and fired are the whistleblowers who 
bring these problems forward, I mean, it would seem that the 
route of the problems at the VA lie in the culture of the VA. I 
just wonder if you could respond to that and some of the 
internal discussions maybe you had that aren't necessarily in 
this report in terms of the range of views on your commission.
    Ms. Schlichting. Well, there is no question the independent 
assessment report commented significantly on the problems of 
the culture of the VA. I think we felt very strongly that in 
order to change culture you have to make sure, again, 
sustainable leadership has to be in place and leadership that 
people have confidence in, that are going to make those tough 
calls and make those decisions that are appropriate.
    Mr. Coffman. But if leaders can't--that it becomes so 
difficult to get rid of subordinates.
    Ms. Schlichting. Well, I am not sure I believe that, you 
know--
    Mr. Coffman. But that over time that people just don't even 
try.
    Ms. Schlichting. Well that is the problem.
    Mr. Coffman. Yeah.
    Ms. Schlichting. People, frankly, and I have seen it in our 
own organization that people say, well, we can't fire people. I 
said, oh, yes, you can; you have to work at it.
    Mr. Coffman. Right.
    Ms. Schlichting. You have to make sure that you are going 
through the appropriate discipline process, that people are 
given due process, which is important.
    Mr. Coffman. Sure.
    Ms. Schlichting. But that you have to do it. And that is 
about leadership development at all levels; that is not just at 
the top, that is front line supervisors, that is managers and 
people that really are going to make those decisions on a daily 
basis about the quality of their workforce and their decisions 
and getting it done.
    Mr. Coffman. But also it seems like the leadership of the 
VA, that leaders when they are responsible don't take 
responsibility when wrongdoing occurs and are never held 
accountable. So we are talking about not just the rank and 
file, but we are talking about the top of the authority--
    Ms. Schlichting. But my sense was that a Secretary was 
fired over that and when that did happen, that is when 
Secretary McDonald came in. So I think clearly there was a 
decision made that reflected the seriousness of the problem in 
Phoenix, but I also think people need time to change that 
culture.
    Dr. Cosgrove. And I think you also have to invest in 
leadership training and bringing people along, and I think it 
goes into a couple of categories. I think it goes into the 
category of experience with feedback, which is difficult and 
painful sometimes to get and to give, and the second thing is 
they have to have a certain amount of intellectual training 
that goes with that, and it may fall into the 80-20 or the 90-
10 ratio. But nonetheless, you have to have an active 
leadership, education and training program, which is 
nonexistent right now.
    Mr. Coffman. Thank you. And I don't know how we ever really 
have a full discussion about transforming the Veterans Health 
Care Administration when we don't know what their costs are for 
any given specific procedure, and as a Committee, we have 
requested that. And it is stunning that they either know it and 
don't want to give it to us or they don't know it themselves. 
What do you think the case is? Do you think they just don't 
know it or do you think they don't want to give it to us?
    Ms. Schlichting. My sense is that that needs to change. And 
frankly I think it has been based on, you know, a focus on a 
year-by-year budget process as opposed to in our world, we rely 
on revenues to set the level of expense. So we have a very 
strong focus on cost, this is a very different model. And I 
think frankly it would be helpful to think about how to get 
that cost focus more directly built into the process of the 
budget and how, you know, they justify expenses.
    Dr. Cosgrove. I also think there is a matter of collecting 
the data and, if you don't have the data, you know, you can't 
understand it. And that data includes the severity of the 
illness, all of that goes into determining how much cost per 
veteran to take care of them.
    Mr. Coffman. Thank you, Mr. Chairman. I yield back.
    The Chairman. Thank you.
    Mr. Walz, you are recognized.
    Mr. Walz. Thank you, Mr. Chairman.
    And I too want to echo my thanks to both of you. You did 
exactly what we were hoping would happen in that conference 
Committee when we created the Commission of Care and the 
request for it that you would come up with specific 
recommendations to improve veterans' care, but you would also 
help facilitate a national dialogue that was sorely missing in 
a transformational type of way.
    I represent the Mayo Clinic in Rochester, Minnesota too, 
and they are like many of you, and they will say there is 
different models. Cleveland Clinic, Henry Ford, Kaiser, there 
are others that do it, but there are certain fundamentals that 
are true throughout all these organizations and how they 
deliver that, integrated clinical practice, education, 
research, and then that focus on leadership.
    The one thing that I think is so refreshing about what you 
came up with, and I will hit on a couple of those points you 
brought up, I remember ten years ago asking why we did a 
quadrennial defense review, with an understanding that the 
world of 1986 looks entirely different than the world of 2016 
from a resource-allocation perspective to how we would defend 
this Nation and all of that, but never done on the VA. So we 
plodded on year to year, year-to-year budgets. We actually did 
something I thought was somewhat innovative and it took a 
stretch from this Congress to do advanced appropriations to 
give a little more continuity to that, to make some decisions 
like your organizations make decisions, but it challenges us in 
ways that we haven't been.
    And I also want to thank you, and I think, Dr. Schlichting, 
you are doing a very good job of stressing this, trying to 
remove this simplistic argument of public versus private 
sector, or the idea that VA health care can be discussed in a 
vacuum outside of health care in general. This gives us an 
opportunity to holistically change the entire system. And we 
know that there are going to be assumptions that maybe don't 
pan out the way they went, you know, lo and behold, we find in 
the ACA that a lot of people who didn't have health care 
insurance before, like to go to the doctor now, and some of 
them were sicker than we assumed in some cases. Those things 
have an impact and instead of just fretting or pointing 
fingers, let's come back and find a workable solution, and that 
is going to challenge all of us.
    I wanted to hit on the first one. This one just has me tied 
in knots, the board of directors issue, because I absolutely 
hear where you are coming from, if I go to Mayo Clinic they 
will say this is a great suggestion, I can guarantee you, just 
like you are saying, because the one thing is they are saying, 
Tim, you may have some expertise in geography or China, 
artillery, and each of these Members brings their own thing, 
but have you ever run a large health care operation? And as a 
Member of Congress it is our job to try and gather and learn as 
much information, and we are ultimately responsible for the 
oversight. So there is a real hesitancy to give away what feels 
like giving away that authority, but the need to put that in 
there.
    Now, this has been challenged on the constitutional issue, 
it has been challenged for all kinds of reasons. How important, 
if I could ask you, do you believe that mechanism is for 
transformation? If we are going to fight this fight, it is 
going to be big and it is going to be transformational with the 
big T. So how do you see it, if I asked you, if we do this and, 
you answered a little earlier, do some of these recommendations 
separately, but you really need to look at holistically, how 
important prioritized is this board of directors?
    Ms. Schlichting. I will tell you that probably of all of 
the recommendations, this had unanimity among our 
commissioners, and I think it was felt to be, if not the most 
important, one of a very small number of the most important 
recommendations that we came up with.
    Mr. Walz. Dr. Cosgrove?
    Dr. Cosgrove. I completely agree. You know, the fact that 
you have over 500 people trying to run the VA seems a little 
much.
    Mr. Walz. This may be an Achilles heel of democracy, but we 
are ultimately responsible to the taxpayers, we ultimately have 
to do that. Giving away that authority even to a Secretary is 
very, very hard to do, and then giving it to another layer in 
there. But I am with you on this that I am certainly willing to 
have this discussion. And behind you there is a whole room full 
of folks who have spent decades supporting veterans; they are 
not in opposition to this, they are there to ask these hard 
questions about this recommendation, how is it going to impact.
    But my question to you too--and I could not agree more, 
this sustainable leadership. I have seen it at the macro level, 
I have seen it at the micro level, in the VA and outside of 
this, that it is absolutely critical. We are going to have to 
restore some trust that people want to go to work there, that 
it is not this assault on the integrity of everyone who is 
there and to see a unified commitment to getting this. How many 
of these things do you think should be implemented, even if 
they could be, through internal rulemaking on the executive 
side? I always make the argument on this, that I think we are 
better off if we do it. We keep responsibility, we have 
ownership, and we have the American people behind us. It takes 
a while, but do you see that we should just enact some of these 
and get moving, or should we have this national debate and fix 
it through this way?
    Ms. Schlichting. Well, I am not the expert on the 
rulemaking at all, but I think that our staff really identified 
in the report those areas where Congress really does need to 
take action, and those areas we felt could be done within the 
executive branch.
    But, you know, the truth is, as I think everyone in this 
room acknowledges, this is a bipartisan issue. These are our 
veterans, it is critically important that we find a way to 
deliver better health care, and we felt strongly that in the 
area of leadership and governance that new structures were 
needed in order to provide that oversight, whether it is the IT 
project--I will tell you, at Henry Ford we had a special 
Committee of our board to oversee the implementation of the 
Epic system, and without that, I am not sure we would have done 
as well.
    Mr. Walz. Well, I thank you for that. And I think I echo 
Dr. Roe, and probably Dr. Wenstrup who will probably come up on 
this, this physician leadership piece, I really have buy-in on 
that. And again, I am somewhat biased that Mayo Clinic plucks 
their leadership from their physicians and that rotates 
through, and that has proven to be a successful model.
    I yield back.
    The Chairman. Thank you.
    Dr. Wenstrup, you are recognized.
    Mr. Wenstrup. Thank you, Mr. Chairman.
    I want to thank both of you, and I would like to thank the 
entire team that worked on this. It was not just you two, as 
you will acknowledge, as you are shaking your head.
    Obviously, our goal was to provide care for those in need 
for our veterans, and one of the things that I have seen that 
assures our veteran patients as much as anything else is having 
a primary care doctor they call their own. That is one of the 
successes that I see at the CBOCs. What I do not like is the 
stigma sometimes that any doctor that is not within those walls 
is a non-VA doctor, and I think we need to change that stigma. 
They are VA doctors just as much as anyone else, that they are 
part of a system and Dr. Roe referred to that.
    And when it comes to choice, I think we need to embrace 
greater choice, because the decisions on referrals and choices 
should come between the primary care doctor and the patient, 
and we don't need another layer of bureaucracy of people that 
don't know the doctor or the patient that decide who you get to 
go to, where and when, because as you know, making a referral 
is based on many things and knowing your patient. It has to do 
with personalities sometimes, it has to do with the level of 
expertise, it has to do with comorbidities and the severity of 
those comorbidities, and there is no panel that can embrace 
that; only the primary care doctor and the patient can embrace 
that. And that is the type of system I think we need, because 
if I was a patient in that system I would be saying, Doctor, 
are you referring me to this person because you have to, or 
because it is the best fit for me? And that is what we have to 
open our minds to is having that capability.
    And then it comes to reality, we have got to know the cost 
and efficiencies of what is taking place. I have said since the 
day I got here almost four years ago, how much are you spending 
per RVU you are producing, do you have any idea? And to this 
day, I still haven't gotten that answer. We did have one 
independent survey here and I think Dr. Abraham will attest to 
this. They said that for a primary care visit it was between 
four and $600. Well, you can make a pretty good living on the 
outside at four to $600 per patient visit.
    So obviously we have got to be able to have that type of 
data to make our decisions, because certainly, let's use the 
example of say an organ-transplant team, not every VA should 
have or can have an organ-transplant team. So you have to have 
one within the VHA system that people can refer to, because 
that is the most efficient, the most effective and the best 
care.
    So we have heard a lot today. I am getting to a question 
and that is, where do we need to go as far as next moves? And I 
think we all kind of, would agree that the electronic record is 
a first move, and along with that, the decision on how we go 
about handling a board of directors, constitutionally or 
otherwise. So beyond those two, what would you say would be the 
next move where we can weigh in and have some impact on the 
next move in bettering our situation?
    Ms. Schlichting. We may have different points of view on 
this, but I would say the personnel system itself. Because one 
of the critical elements is attracting talent and there is 
still a lot of openings within the VA system in all types of 
jobs, whether it is, you know, leadership or front line or 
physicians, and I think that looking at how to create a more 
organized system that ensures that in all positions there is an 
ability to attract that talent.
    And I actually think that with that, the VA would do a much 
better job attracting talent across the country, because there 
are many people, including some at Henry Ford, that have gone 
to work for the VA because they want to help veterans, and I 
think if they felt that that system were more efficient and 
effective, they would be there.
    Mr. Wenstrup. Doctor?
    Dr. Cosgrove. Yes, I think you clearly need that, but I 
think ultimately, at the end of the day, culture is the main 
thing that makes any organization work. It is all about people, 
it is not about bricks and mortar. And changing the culture, 
that is going to require sustainability of the leadership and a 
sustained push at changing the culture of the organization.
    And, you know, the focus clearly has to be on the patient, 
the veteran, and how are you going to do the best thing for the 
veteran and everything will flow from that. That is your North 
Star, that is your raison d'etat, and everybody in the 
organization needs to understand that from the get-go.
    Mr. Wenstrup. And I appreciate the comments on provider 
input in how we go about conducting the business of taking care 
of people.
    Thank you. I yield back.
    The Chairman. Thank you very much.
    Mr. Takano, you are recognized for a second round.
    Mr. Takano. Thank you, Mr. Chairman.
    Did the Commission look at all about the difficulty of the 
VA being able to hire military doctors in the VA? Are there any 
complications or things that we can do to--I have heard there 
are some issues related to that.
    Dr. Cosgrove. I am not sure. You have to tell us what the 
issues are.
    Ms. Schlichting. Yeah, I am not.
    Mr. Takano. I was just--apparently you don't have an answer 
to the question, but I just wanted to pose it.
    The other thing, is I wanted just to make mention, and I 
thank my colleague Mr. O'Rourke for bringing up the medical 
residencies and we have increased them. My understanding is the 
VA has not been able to assign all of them, only 300 out of the 
1500, and I just want to take a moment to make an appeal to my 
Republican doctor colleagues to address the Medicare cap and 
the time extensions. I would hate to lose those because the 
clock is running out.
    One issue that has come up over and over again is the way 
that--our VSO testimony is their concerns regarding private 
sector metrics. The VA has testified many times that the 
private sector does not measure things that are important to 
veterans' health care. How did the Commission envision the VA 
adopting private sector measures if the private sector does not 
measure them, in terms of that there are some things that the 
private sector doesn't measure?
    Ms. Schlichting. Can you give an example?
    Mr. Takano. There are specific things that may be unique to 
what the VA does as far as what veterans do.
    Ms. Schlichting. You know, we--
    Mr. Takano. Mental health comorbidity as an example.
    Ms. Schlichting. Well, those issues exist in the private 
sector as well, and we have a very large behavioral health 
population at Henry Ford, and worked on initiatives such as 
perfect depression care where we have tried to reduce the level 
of suicide to zero for a managed population. And, you know, 
while the background and issues might be somewhat unique, the 
comorbidity problem exists.
    And so, you know, we have to constantly drive toward 
results even when we have those conditions, whether it is 
socioeconomic risk, or it is other health factors and combat 
experience that affect people. So I think there is a way to 
work toward that set of metrics that could be very comparable.
    Dr. Cosgrove. We are looking at the same sort of things. We 
are looking at socioeconomic determinants, mental health 
determinants, as well as physical determinants.
    Mr. Takano. But here is the thing: are they truly 
comparable? I know you do these metrics, but are--
    Ms. Schlichting. Well, the one thing I will tell you, being 
in Detroit, is we live in a world of trying to always have 
reasons why our data looks worse and we try not to have those 
excuses, that we clearly believe there are strategies to 
improve care even when we have a tough socioeconomic group of 
people with poor health conditions. We serve, as many 
organizations do, a lot of veterans that don't seek care within 
the VA.
    And so I think we have got to really drive toward those 
kinds of metrics that push us in a direction of much higher 
performance.
    Mr. Takano. Comparing the VA to private sector care is not 
always a fair comparison. For instance, the VA must adhere to 
Federal hiring and firing practices that allow for fair 
treatment and due process. I heard you engage with one of the 
other Members and I was delighted to hear that you believe that 
a central problem is leadership, training and follow-through, 
making sure there is progressive discipline, and that a lot of 
these personnel procedures exist in the private sector care as 
well.
    And I might have you elaborate more on what you said 
before, because accountability is one of the things this 
Committee is struggling with.
    Ms. Schlichting. Well, you know, it is very easy in a 
health care environment to find reasons why people don't 
perform, it just is, and often there is a pattern of making 
excuses for people. And it is critical that we push on that 
level of accountability and performance in all positions: 
front-line staff, physicians, nurses, leaders. And I think that 
is part of the culture that Toby and I have talked about today 
is creating that sense that you have to perform at a high 
level, and that in fact you are going to follow through on 
making sure that if people aren't doing that, that there are 
consequences.
    Dr. Cosgrove. And I would just add to that. Any time I have 
found a problem, regardless if it is on a nursing floor or in a 
hospital, it goes right back to leadership. You change the 
leadership, you put a better leader in, you get better 
performance. I can't stress too much the importance of 
leadership.
    Mr. Takano. And investing in the training and--
    Ms. Schlichting. Absolutely.
    Mr. Takano. And you believe it is possible for there to be 
accountability, that we can improve accountability at the VA?
    Ms. Schlichting. Yes.
    Dr. Cosgrove. There has to be accountability. I mean, do 
you not have accountability when you get voted on every year--
every other year?
    Mr. Takano. But in other words, you don't do away with due 
process, that due process has to be a part of that 
accountability system, but leadership has to work with that due 
process.
    Ms. Schlichting. Let me make a comment, though. I do think 
human resources as a division within VA is undervalued and 
under-invested in, from my vantage point, in terms of the 
quality and the experience of HR leadership, because it really 
takes strong leadership on the HR side to really put those 
processes systems in place to make sure that people are 
following them. And when we talked with some of the HR leaders, 
we did not get the sense that that was the tradition of the VA 
system to have that level of leadership.
    Dr. Cosgrove. And I would completely second that. It was 
embarrassing to hear the level of HR activities at the VA.
    Mr. Takano. So perhaps rather than focusing in on the due 
process procedures and all of that, I mean, there is some value 
in that, but focusing on the investment in HR would be a 
worthwhile thing for this Committee to look at.
    Ms. Schlichting. Yes.
    Mr. Takano. Great. Thank you.
    The Chairman. Thank you.
    Dr. Abraham, you are recognized.
    Mr. Abraham. Thank you, Mr. Chairman.
    Just a quick comment. Phenomenal work, and you bring to 
this Committee that we as the Committee expect and the 
taxpayers expect and that is credibility. The way I understand 
the math, you guys command $13 billion of revenue between both 
clinics and that has done successfully. So you are the experts 
in the room on managing health care.
    On the choice, certainly we are all fortunate on the 
Committee here to have thousands of veterans in our districts, 
and we realize how important we are to represent them and how 
fortunate we are. I am a big advocate of choice and the 
arguments I have heard against it as far as expanding the 
distance or taking away the obstacles is that it would weaken 
the VA system simply because you could possibly have a 
migration of patients. In my opinion, I think it would actually 
strengthen the VA system. If it makes them more competitive, 
things get better with competition.
    And, Doc, just going back to your comment, I have worked 
with EMRs such as all the three physicians on my right have. 
You said the Cleveland Clinic reports up to 100 quality 
metrics. You and I both know that those metrics could be 
reported just like that with an EMR because they are entered 
into the database.
    Dr. Cosgrove. Yes.
    Mr. Abraham. So that answers the question of quality metric 
measurement right there. So, you know, it is a huge thing to 
get EMRs in place, they work, and again we need to do it 
commercially. The way you eat a whale is one bite at a time. 
And of those four things that you highlighted in your 
testimony, the EMRs and the supply chain. Hopefully the VA is 
leveraging their volume of catheters, name whatever, trach 
tubes, you just name, but if they are not, you guys, I think 
you said you save like $274 million over a period of time. If 
the VA is not doing that, then, wow, shame on them for not 
getting in the game long ago, because they order millions of 
quantities of supplies probably on a quarterly basis.
    Dr. Cosgrove. Yes.
    Mr. Abraham. So do you have a comment on that, Doc?
    Dr. Cosgrove. Yes. I think one of the other things I 
emphasized is that particularly for physician choice issues 
like pacemakers or artificial knees or hips, to get the 
physicians involved and then you can drive down to a couple of 
choices and then you can drive the price down with the 
providers of those pieces of equipment, and that is where we 
have had major savings.
    Mr. Abraham. It is just good business.
    Ms. Schlichting. You know, interestingly, the VA does a 
terrific job on drug purchases.
    Dr. Cosgrove. Yes, they do.
    Mr. Abraham. Why not on supplies?
    Ms. Schlichting. So it was surprising to us to see that 
they weren't providing, you know, the same type of approach on 
the non-drug medical supplies.
    Mr. Abraham. Well, again, thanks for your work, we 
appreciate it.
    And I yield back, Mr. Chairman.
    The Chairman. Thank you very much.
    Mrs. Radewagen, you are recognized.
    Mrs. Radewagen. Thank you, Mr. Chairman.
    I too want to welcome you both and thank you for your 
leadership and service.
    Ms. Schlichting, in my home district, American Samoa, over 
60 percent of the veterans have to travel off-island at a 
minimum of five hours by air for medical appointments. In the 
Commission's final report as part of the commissioner site 
visit observations, the report cites poor access to VA care for 
rural veterans as one of the major weaknesses of the VA. For 
instance, in American Samoa, the hospital is in such need of 
upgrades to facilities and equipment, as well as being short-
staffed, that the VA drastically limits the use of the hospital 
for VA health care.
    Were the U.S. insular areas included in this evaluation as 
part of the under-served and/or rural areas? And would you 
please highlight which of the Commission's recommendations are 
aimed to address these under-served areas, especially those you 
think would apply to the U.S. insular territories?
    Ms. Schlichting. You know, to be candid, we did not spend 
time on the specific issues that your place of origin really 
has. But on the other hand, we did pay a lot of attention to 
the issues of rural access and really thinking about how to 
provide improved access. This was one of the reasons we though 
it was so critical to really look at a more integrated model of 
care, because in many parts of our country and beyond we have 
situations where veterans simply cannot get the access they 
need locally through the VA, but in fact are using in some 
cases private health care, but perhaps not organizing it as 
well. And the organization is actually very critical to the 
outcomes of care, care coordination and making sure people have 
the kind of providers that they need.
    So what we recommended was this integrated model of 
creating one system, so that in every part of, you know, where 
veterans live and work that they have access to what they need 
in a way that really enhances their outcomes, but we did not 
look at that specifically.
    Mrs. Radewagen. Thank you, Mr. Chairman. I yield back.
    The Chairman. Thank you very much.
    Mr. Takano, any other questions?
    Mr. Takano. I have no questions and neither do any of the 
other Members.
    The Chairman. Okay. Thank you very much.
    I have one other quick question, it kind of piggybacks on 
what Mr. Takano was asking about training and my question is, 
we all agree that due process is very important, my question is 
should it take a year or longer to discipline an employee or to 
fire them?
    Ms. Schlichting. Well, you know, the way I look at that is 
it depends on the situation that they are dealing with. In most 
cases, you know, due process is much more efficient than that, 
but if someone has a serious issue that has appeals built in, 
sometimes time has a way of, you know, increasing. But I think 
the key is measuring is the process efficiently operating, and 
those are things that should be evaluated to really determine 
whether that timing makes sense or not.
    The Chairman. Dr. Cosgrove?
    Dr. Cosgrove. Yes, I agree. You know, for example, as a 
physician we do annual reviews of everybody at the Cleveland 
Clinic, including physicians, and we do not just fire someone 
unless it is something terribly egregious without having gone 
through the due process over a period of time. Sometimes that 
is more than a year of collecting a physician's information, 
but depending upon the--we have fired some people on the spot 
for egregious things that have occurred.
    The Chairman. All right, thank you very much.
    Also I would like to again thank the ten Veterans Service 
Organizations that did in fact provide written testimony for 
today. It is a very important part of the record, as is the 
written testimony that VA provided as well.
    Again, I think you heard from every Member of this 
Committee a great appreciation of the time and the effort that 
you and all Commission members did provide. The document is 
very important for us, for transforming a department that is in 
need of serious transformation into the 21st century.
    And I would say that all Members would have five 
legislative days with which to revise and extend or add any 
extraneous material regarding this hearing.
    Without objection, so ordered.
    And with that, this hearing is adjourned.

    [Whereupon, at 12:44 p.m., the Committee was adjourned.]

                          A P P E N D I X

                              ----------                              

                Prepared Statement of Nancy Schlichting
    Chairman Miller, Ranking Member Takano, and Members of the 
Committee:
    I am pleased to appear this morning to discuss the workings, 
deliberations, findings, and recommendations of the Commission on Care, 
which I was privileged to chair. And I am delighted to be accompanied 
by my colleague, Dr. Delos (Toby) Cosgrove, the Commission Vice 
Chairperson, and the Chief Executive Officer (CEO) of the Cleveland 
Clinic. I also want to take this opportunity to thank you for your 
support of the Commission, and your assistance in providing us an 
extension of time to complete our work.
    For the last 13 years, I have served as the CEO of the Henry Ford 
Health System (Henry Ford), a Detroit-based $5 billion, 27,000-employee 
organization, which I joined after many years of senior-level executive 
positions in health care administration. I believe my experience in 
leading Henry Ford through a dramatic turnaround of its finances and 
culture and in winning a Malcolm Baldridge National Quality Award and 
national awards for customer service, patient safety, and diversity 
initiatives played a role in the President's selecting me to chair this 
important body. I accepted this position not only because I was honored 
to be selected, but because I hoped that this commission could make a 
difference. I believe our report offers that promise.
    As you well know, Mr. Chairman, just a little more than two years 
ago, Congress and the Administration faced a real crisis of confidence 
in a health system some had once seen as providing the best care 
anywhere. In 2014, alarming delays in providing needed care, and the 
scandal surrounding deceptive reporting on patient-scheduling, led to 
the enactment of a far-reaching omnibus law that established the 
Commission on Care.
    Congress is to be commended for including in that law provisions 
that commissioned an independent assessment of VA health delivery and 
that charged our commission to assess access to care and critical 
strategic issues. I was privileged to work with a group of 
commissioners who brought a diverse, rich breadth of experiences and 
perspectives while sharing a strong commitment to our veterans.
               The Commission's Veteran-Centered Approach
    The Independent Assessment, released in September 2015, was 
invaluable in providing the Commission a comprehensive, carefully-
researched, system-focused analysis that both informed our work and 
provided an invaluable integrated framework for our examination and 
deliberations.
    As we explained in our interim report, early on the Commission 
adopted a set of principles to guide our work; that identified both how 
we would proceed and the core values we would honor. Our adherence to 
those principles proved critical, in my view, to the development of a 
final report that is value-based and centered on our veterans.
    While each of those principles was meaningful and important to our 
work, let me highlight just a few I think are particularly relevant to 
our dialogue this morning:

      The deliberations and recommendations of the Commission 
will be data-driven and decided by consensus.
      The Commission will focus on ensuring eligible veterans 
receive health care that offers optimal quality, access, and choice.
      Recommendations will be actionable and sustainable, 
focusing on creating clarity of purpose for VA health care, building a 
strong leadership/governance structure, investing in infrastructure, 
and ensuring transparency of performance.

    I believe you will find that these core principles profoundly 
influenced and are deeply embedded in the content of our final report.
    Our work over a ten-month period--including 12 deliberative and 
educational meetings over the course of 26 days--was not easy. Our 
public hearings were wide-ranging; our discussions were frank. Through 
testimony and dialogue, the Commission considered the broadest span of 
perspectives we could assemble: these included senior VA leaders and VA 
program and subject-matter experts; stakeholders, including 
representatives of national veterans service organizations, union and 
association leaders representing Veterans Health Administration (VHA) 
employees, individual veterans, Choice Program contractors, 
representatives of medical school affiliates and associations of 
behavioral health care professionals; former VHA Under Secretaries of 
Health and VHA network and medical center administrators; experts in 
health care and health care economics; and members of this Committee. 
Our Commission, with its diverse membership, had spirited discussions, 
debates, and sometimes difficult deliberations - perhaps not unlike the 
process that leads to good legislation. Importantly, too, those 
deliberations were conducted in public sessions, in a process which was 
stronger for its transparency. Like your own work on this Committee, we 
were focused on and bound together by the unifying question, ``What's 
best for the veteran?'' I believe we have been true to that challenge, 
and that our report provides actionable, sustainable recommendations - 
many of which invite congressional action.
    Importantly, we discussed at length the challenge of determining 
what veterans themselves want. To what, we asked, could we look to find 
the ``voice of the veteran?'' Time constraints and regulatory 
requirements ruled out conducting a Commission survey of veterans. But 
we pursued multiple other avenues and sources to tap and ascertain 
veterans' views, certainly including your advice, Mr. Chairman, that we 
engage the veterans' service organizations, who participated fully in 
our work.
   Status of VA Health Care Delivery System and Management Processes
    In its sweeping report, the Independent Assessment identified 
troubling weaknesses and limitations in key VA systems needed to 
support its health care delivery. Reaching very similar findings, the 
Commission concluded that--if left unaddressed--problems with staffing, 
facilities, capital needs, information systems, procurement and health 
disparities threaten the long-term viability of VA care. Importantly, 
though, neither the Independent Assessment nor our review called into 
question the clinical quality of VA care. Quite the contrary. The 
evidence shows that care delivered by VA is in many ways comparable to 
or better in clinical quality than that generally available in the 
private sector. \1\ This is a testament to the high quality of its 
clinical workforce.
---------------------------------------------------------------------------
    \1\  VA care has often been cited to be as good as or better than 
that of private sector. The following paper, identifying about 60 
studies by disease type, supports that statement. http://avapl.org/
advocacy/pubs/FACT%20sheet%20literature%20review%20of%20VA%20vs%20 
Community%20Heath%20Care%2003%2023-16.pdf
---------------------------------------------------------------------------
    Yet we found a system that faces many grave problems: high among 
them, an ongoing leadership crisis, confusion about strategic 
direction, significant variation in performance across the VA health 
system, and a culture of risk aversion and distrust. Despite the 
various deep problems facing VHA, our report does not propose 
shuttering the system or placing its future at risk.
    With our focus on what is best for the veteran, the commissioners 
recognized that the VA health care system has invaluable strengths. It 
is an integrated health care system with a compelling mission that 
combines care-delivery, educating health professionals, conducting 
research, and carrying out a contingency national-emergency mission. 
VHA has developed and operates unique, exceptional clinical programs 
and services tailored to the needs of millions of veterans who turn to 
it for care. For example, its behavioral health programs, particularly 
their integration of behavioral health and primary care, are largely 
unrivalled, and profoundly important to many who have suffered the 
effects of battle or military sexual trauma, or for whom VHA is a 
safety net. VHA's ``wraparound'' case-management services meet the most 
vulnerable veterans where they are to prevent them from falling through 
the cracks. As the largest national health care system, VHA continues 
to have the capacity to bring about reforms in the larger health care 
industry. By way of example, it pioneered bar-coding of pharmaceutical 
drugs, and championed improvements to patient-safety through systematic 
identification and review to identify root causes of medical mistakes 
and ``near misses.'' In working to close access gaps, VA has developed 
one of the largest telehealth and connected-care operations in the 
world. While VHA can learn from private sector care, we also benefit 
from its successes.
                             Transformation
    We are clear, however, in our view that VHA must change, and change 
profoundly, because veterans deserve a better organized, high-
performing health care system. Certainly, some elements of such a high-
performing system are already in place. VA has high-quality clinical 
staff, and this integrated health care system is marked by good care-
coordination. VHA today, however, relies significantly on community 
providers to augment the care it provides directly, although those 
community partners are not part of a cohesive system. VA and VHA are 
already undergoing substantial change under the leadership of Secretary 
Robert McDonald, Deputy Secretary Sloan Gibson, and Under Secretary for 
Health David Shulkin, and it is important to recognize and encourage 
this change process.
    All of our commissioners agreed on the need to transform VA health 
care. At the heart of that transformation, we call for VA to establish 
high-performing health care networks that include and that integrate 
the care provided by credentialed community-based clinicians along with 
VHA and other federal providers, and that afford veterans primary care 
provider-choice, without regard to criteria like distance or wait 
times. The establishment of integrated care networks - what we refer to 
in the report as a new VHA Care System - is nothing less than a 
fundamental change in the model of VA care-delivery. It is a model that 
will much more closely integrate VHA with its community partners, with 
an emphasis on coordination of care that is so important to the 
population VHA serves, one with more chronic illness and behavioral 
health conditions than the general medical population. High quality 
care is a critical element, so we propose that VA control network 
design; set high standards for community-provider participation, to 
include a credentialing, quality and utilization performance, and 
military/cultural competence; and tightly manage the networks. Our 
vision for this transformed system is one that would offer major 
improvements: improved access to care, care-quality, and choice, with 
resultant improvement in patient well-being.
    Such a system, which Dr. Cosgrove and I would be happy to discuss 
in more detail, would provide our veterans with the high quality health 
care they richly deserve. But successful implementation of that 
recommendation is not only contingent on legislative action but, as 
importantly, on adoption of other major inter-dependent initiatives 
proposed in our report. In short, our report - as well as the 
Independent Assessment - makes very clear that providing veterans 
access to needed care cannot be achieved by ``tweaking'' existing 
programs or mounting a complex new delivery framework on a weak 
infrastructure platform. Rather, it requires an integrated systems 
approach that not only redesigns VA's health care delivery system, but 
re-engineers fundamental internal systems. Transformation will require 
streamlining key functions such as IT, HR, procurement, facilities-
management; investing in IT and facilities; building a strong 
leadership system; strengthening VHA governance; and reorganizing the 
relationship between VHA leadership and the field. Clearly, it will 
take time and will require relentless commitment by all stakeholders.
    Let me add that in recommending a transformation of VA health care 
delivery and the systems that underlie it, we used the term 
``transformation'' advisedly to mean fundamental, dramatic change - 
change that requires new direction, new investment, and profound re-
engineering. Virtually all the commissioners agreed our recommendations 
are bold, though you have, no doubt, heard isolated voices of 
disagreement. One view disputes our belief that our report's 
recommendations would be truly transformative, and says instead that 
the report proposes only limited reforms and will do little to redirect 
veterans' health care. At the same time, our work has also been 
characterized as a ``horrendous, anti-veteran proposal.'' Both 
critiques widely miss the mark, in my view. Our focus, however, was not 
on how our recommendations would be characterized, but with developing 
a report that would result in meaningful improvement in veterans' care. 
I believe we have laid that foundation.
                           ``Privatization''
    It is no secret that the Commission debated the merits of so-called 
``privatization'' or of veterans being offered unfettered choice from 
among all Medicare-qualified providers. It is also no secret that some 
among the membership are deeply skeptical of government-run health 
care, and some believe current trends will ultimately lead VA to a 
payer only role. Regarding the 20-year horizon to which the Commission 
was to look, though, we can foresee continued dynamic change in health 
care. Already, there has been a dramatic increase in outpatient care. 
We can also speak with some confidence about the potential for 
explosive growth of telemedicine, increasing emphasis on preventive 
care, the introduction of precision medicine and the likely 
proliferation of technologies that permit routine home-based health 
monitoring of patients with chronic illnesses. But we're also in 
agreement that the rapid changes overtaking health care make it 
impossible to accurately forecast further than five years out.
    While we cannot fully foresee the medical breakthroughs of the next 
decades, the Commission did acknowledge important realities:

      Despite profound challenges it must overcome, the VA 
health system is important to millions of veterans and has great value 
in providing clinical care, educating health professionals, conducting 
research, and carrying out a contingency national-emergency mission.
      Millions of veterans will continue to need care in the 
future that VA provides through critical programs and special 
competencies that are either unique or of higher quality or greater 
scope than is available in the private sector.
      Many veterans have complex medical and well-being needs, 
often greater than are commonly present in the general population.
      As a result, in considering the option of VHA becoming 
solely a payer, one must acknowledge that health care systems and 
facilities across this country are generally not equipped to meet many 
of the unique and complex health needs among the roughly six million 
veterans whom VA treats annually, particularly those with the highest 
priority in law: the service-connected disabled and those with limited 
financial means.
      The difficulties veterans have experienced in accessing 
timely care in the VA health care system are also relatively common 
experiences among health care consumers outside VA where national 
shortages of primary care physicians, psychiatrists, and certain 
specialists are everyday problems.
      Finally, many private health care systems have not 
established programs to fully coordinate care - an important attribute 
of VA-provided care.

    This last point has particular relevance to the idea that veterans 
would be better served if they were simply provided a card or care-
voucher that entitle them to get care virtually anywhere at VA expense. 
That strategy would surely lead to more fragmented care. As described 
by one highly acclaimed former Under Secretary for Health-

    ``Fragmentation of care is of concern because it diminishes 
continuity and coordination of care resulting in more emergency 
department use, hospitalizations, diagnostic interventions, and adverse 
events. The VA serves an especially large number of persons with 
chronic medical conditions or behavioral health diagnoses - populations 
especially vulnerable to untoward consequences resulting from 
fragmented care.'' \2\
---------------------------------------------------------------------------
    \2\  Kenneth W. Kizer, MD, MPH, "Veterans and the Affordable Care 
Act," JAMA, vol. 307, no. 8 (Feb. 22/29, 2012) accessed at https://
commissiononcare.sites.usa.gov/ files/2016/01/20151116-02-
Veterans_and_the_Affordable _Care_Act_JAMA_Feb2012_Vol307-No8.pdf
---------------------------------------------------------------------------
                      Needed Congressional Action
    Importantly, our recommendations highlight the critical role we see 
for Congress. The Commission certainly recognizes that veterans' access 
to care has long been a high congressional priority. Congress has 
strengthened the foundation of care-delivery through legislation, 
provided needed medical-care funding, and conducted important 
oversight. In creating our Commission, you asked the important 
question, how can the Nation best deliver veterans' care in the years 
ahead? Let me highlight some of the critical steps we recommend 
Congress take:

      Provide VA needed authority to establish integrated care 
networks through which enrolled veterans could elect to receive needed 
care from among credentialed providers without regard to geographic 
distance or wait time criteria;

      Address fundamental weaknesses in VHA governance;
      Provide VA more flexibility in meeting its capital asset 
and other needs, including -

    (1)Establishing a capital asset realignment process modeled on the 
DoD BRAC process;
    (2)Waiving or suspending the authorization and scorekeeping 
requirements governing major VA medical facility leases;
    (3)Lifting the statutory threshold of what constitutes a VA major 
medical facility project;
    (4)Reinstating broad authority for VHA to enter into enhanced-use 
leases; and
    (5)Easing, for a time-limited period, otherwise applicable 
constraints on divestiture of unused VHA buildings.
    (6)Establishing a line item for VHA IT funding and authorize 
advanced appropriations for that account.

      Create a single personnel system for all VHA employees to 
meet the unique staffing needs of a health care system; and
      Invest in needed VHA IT funding and facilities.

    I'd be happy to discuss any of these in more detail, but let me 
amplify one point, which our commissioners viewed as foundational. The 
Commission saw VHA's governance structure as ill-equipped to carry out 
successfully the kind of transformation required to re-invigorate this 
health system, which all agreed would be a multi-year process. 
Continuity of leadership and long-term strategic vision--critical both 
to implementing a transformation and to sustaining it - cannot be 
assured under a governance framework marked by relatively frequent 
turnover of senior leadership and near-constant focus on immediate 
operational issues. The Commission believed that two fundamental 
governance changes were needed: establishment of a board of directors 
with authority to direct the transformation process and set long-term 
strategy, and change in the process for the appointment for and tenure 
of the official currently designated as the Under Secretary for Health. 
Of course, I'd be happy to discuss these and other recommendations in 
more detail.
                                  Cost
    Let me emphasize that the Commission's aim was to develop 
recommendations that are actionable, sustainable, and would realize the 
vision of improving veterans' access, quality of care, choice, and 
well-being. We did not set out with the preconceived notion that bold 
transformational change was needed. Rather we stayed true to our 
guiding principles and to where our findings led us. Also, we were not 
constrained by cost considerations, though we did recognize early that 
the U.S. taxpayer is one of the Commission's stakeholders and we worked 
with health economists to model different options. Our report includes 
an appendix chapter that presents estimates of the cost of alternative 
policy proposals.
    We recognized that our recommended option for expanding community 
care through the establishment of integrated care networks would result 
in higher utilization of VA-covered health care and, accordingly, in 
additional costs, in the view of our economists. But we believe 
adoption of other Commission recommendations and options discussed in 
our report can help mitigate the increased costs. Projecting costs, as 
you know, includes elements of uncertainty. Our economists could not 
estimate savings or costs that might result from reducing 
infrastructure, for example. Similarly, they could not assign costs to 
needed investment in IT and facilities.
    Implicit in our discussions, though, has been the question - should 
the Nation invest further in the VA health care system? Our report 
answers that question in the affirmative, even as it underscores the 
need for sweeping change in that system. We do not suggest that 
Congress has not already made very substantial investments in the 
system. Rather we call for strategic investments in a much more 
streamlined system that aligns VA care with the community.
    In my judgment, our report points the way to meeting the central 
challenge Congress identified in 2014: improved access to care, while 
offering a vision that would expand choice, improve care-quality, and 
contribute to improved patient well-being. It is a vision that puts 
veterans first, not an approach crafted to win buy-in from system 
administrators or other interests. My long experience tells me that 
that veteran-centered focus will ultimately improve the service 
veterans receive while strengthening the system and providing increased 
transparency and accountability. In my view, this is a vision that 
merits your support.
    I would be pleased to be a resource to this Committee as you 
continue to work on these issues. I would also be happy to respond to 
your questions.

                                 
           Prepared Statement of Delos M. (Toby) Cosgrove, MD
    Chairman Miller, Ranking Member Takano, and Members of the 
Committee, thank you for inviting me to speak about the Commission on 
Care Final Report today.
    As a former Air Force surgeon, I care deeply about the welfare of 
the Nation's veterans and I have been honored to serve as vice 
chairperson of the Commission on Care and as a member of the MyVA 
Advisory Committee. Over the course of my work with the VA, I have 
become well-acquainted with the Department and understand its 
contributions as well as its challenges in meeting our veterans' needs. 
As CEO of Cleveland Clinic, an $8 billion dollar health care system 
serving communities across the country and internationally, I'm keenly 
aware of the magnitude of the challenges facing VA health care leaders. 
Mr. Chairman, the veterans' health care system must make transformative 
changes to meet the health care needs of veterans today and tomorrow. 
If these changes are not made, the VHA's many systemic problems 
threaten the long-term viability of VA care.
    The final report contained eighteen (18) different recommendations. 
Today, I am going to address four specific areas that include; the 
establishment of integrated community-based health care networks, 
quality metrics, information technology (specifically electronic health 
records), and supply chain.
    Given the Commission's charge to examine veterans' access to care, 
it was concluded early on that greater reliance on, and closer 
integration with, private sector care held the greatest promise for 
improving not only access, but affording veterans greater choice. As 
you know, the Commission considered and debated options that would 
provide for different degrees of choice. The recommended option in the 
Commission's Final Report reflects a consensus position, though many 
supported an option that would provide veterans still greater choice of 
private sector providers. The Commission agreed that the VHA must 
establish high-performing, integrated, community-based health care 
networks to provide timely and quality care to our veterans.
    The report envisions a continued role for a VHA health care system, 
but as we said - if the challenges and opportunities described in the 
final report are left unaddressed we are concerned that our veterans 
will not receive the kind of high-quality care that they deserve. Among 
our proposals, the Commission recommends that VHA adopt a continuous 
improvement methodology such as Lean Six Sigma to engage staff and 
improve the culture. This will help, but it will also take significant 
investments in time, effort, and resources to modernize and streamline 
such essential functions as human capital management, capital asset 
management and leasing, business processes, and information technology.
    The Commission recommended that the VHA should implement core 
metrics that are identical to those used in the private sector. 
Veterans deserve to know that the health care they are receiving either 
from VHA or from a community provider is of high-quality. If these 
metrics are put into place, it will be easier to evaluate the system's 
performance and Congress will have benchmarks from the private sector 
to compare both its progress and the improvement over time. Congress 
and the American people deserve to know that VHA is getting value for 
their investment.
    Years ago, the VHA was a leader in the field of electronic health 
records. Unfortunately, this is no longer the case. Therefore, the 
Commission believes that the VHA should transition to the same type of 
commercial off-the-shelf electronic health records as other providers. 
By using a proven product, many of the scheduling and billing problems 
would be resolved. Further, these systems could help the VA identify 
areas for opportunity and utilization to promote better access to care 
for our Veterans and promote interoperability which is critical as 
veterans move to different care sites. Finally, the commercial EHR 
would also allow VHA to link financial and clinical information-a 
critical functionality for running modern health care delivery systems. 
The best and most prevalent commercial EHR programs allow staff and 
patients to schedule patient care easily and to provide legitimate 
performance measures for wait times, unit costs, clinical care outcomes 
and productivity that conform to those of the rest of the health care 
industry. Many of our country's best hospital systems have converted 
homegrown information systems to commercially-based systems. VHA must 
do the same to remain current and engage with the rest of the health 
care system. It must also have its own leadership-specifically a chief 
information officer for VHA information systems that allows VHA to 
adjust its information needs as the health care industry evolves.
    As a VHA contractor, Cleveland Clinic has experienced first-hand 
the burdensome, antiquated system that is currently in place to receive 
payment. We are required to provide documentation in hard copy form 
sent via the postal services as they will not accept either fax, email 
or any other electronic submission. If a request results in more than 
100 pages we must burn the records to a disc. Because we do not have 
any mechanism to track whether the documentation has been received, we 
have heard on many occasions that they ``never received the paper 
records'' and we have no recourse other than to send them again. The 
Independent Assessment that Congress commissioned found that VHA should 
keep claims adjudication and payment separate from its care delivery. 
The health care system that the Commission envisions for VHA will 
continue to expect exceptional performance from its network of 
providers and providers should expect timely and accurate payment in 
return.
    Supply chain is another area ripe for VHA streamlining. The 
Commission's report stated that the ``purchasing processes are 
cumbersome which has driven VA staff to workarounds and exacerbates the 
variation in process the VA pays for products.'' The VA should 
consolidate and reorganize the procurement and logistics for medical 
and surgical supplies under one leader. The VHA has enough market share 
to leverage prices that could result in savings of hundreds of millions 
of dollars.
    At Cleveland Clinic, we are constantly evaluating and reviewing our 
supply chain products and processes. Today, our Supply Chain is working 
with teams of clinicians led by physician champions to justify 
purchases of more expensive supplies by engaging clinical staff in a 
value-based sourcing effort that illustrates that cost and quality do 
not have to be mutually exclusive principles. Clinicians are made aware 
of the costs and outcomes associated with different brands. Once the 
clinical staff has to justify the higher costs and understands whether 
they add value to care outcomes based on empirical evidence, they make 
purchasing decisions based on value. Such efforts are then integrated 
into patient-centric utilization management and inventory management 
efforts to ensure the appropriate use of our resources. A clinician-
engaged, value-based supply chain management practice model has allowed 
us to save $274 million dollars over the last six years. We are 
continuing to reform our processes by entering into purchasing 
consortia with other nonprofit health care providers and ensuring that 
we are continually searching for improvements in cost management.
    Of course, leadership is the key to transformative change. The 
Commission speaks to the need to create a pipeline for internal leaders 
and to make it easier for private sector and military clinical and 
administrative leaders to serve in VHA. Market-based pay is critical to 
bringing in leaders capable of taking VHA to the next level. The 
Commission also proposes that Congress provide for a VHA governance 
board to provide a long-term strategic vision and successfully drive 
the transformation process. Both the chairperson and I will be happy to 
talk more about this aspect of the report.
    Mr. Chairman, transforming a system as large and complex as VHA's 
will require streamlining multiple systems, redesigning care-delivery, 
and more. This report offers a roadmap to success. Realizing the vision 
the report proposes will require new investment, (both financial and in 
expertise), enactment of legislation, and strong leadership.
    Thank you for your attention. I am happy to address any questions 
you may have.

                                 
                       Statements For The Record

        THE AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, AFL-CIO
    Chairman Miller and Ranking Member Takano:
    The American Federation of Government Employees, AFL-CIO and its 
National VA Council (AFGE) thank the Committee for the opportunity to 
share our views regarding the final recommendations of the Commission 
on Care. AFGE represents nearly 700,000 federal employees including 
more than 230,000 employees of the Department of Veterans Affairs (VA). 
Within the Veterans Health Administration (VHA), AFGE represents 
employees at nearly every medical center and is by far the largest 
representative of medical and mental health professionals and support 
personnel.

Overview

    Although the Commission did not formally adopt the controversial 
``strawman'' proposal, the impact would be very similar. Both would 
dismantle our veterans' only specialized integrated health care system 
and incur unsustainable costs that will inevitably lead to lower 
quality care and fewer health care services for fewer veterans.
    Both would also destroy veterans' true source of ``community 
care'': care provided within the Veterans Health Administration (VHA) 
that is closely coordinated with VA vet centers and Veterans Benefits 
Administration (VBA) benefits and employment services. The Commission's 
description of non-VA care as ``community care'' is a misnomer. 
Veterans strongly prefer to receive their care from the VA over the 
private sector according the Vet Voice Foundation poll and other recent 
polls.
    The Commission recommendation (#15) to eliminate all civil service 
protections under Title 5 would increase retaliation against employees 
who report mismanagement and take veterans' preference rights away from 
thousands of veterans who choose VHA careers. The loss of seniority-
based pay under the Commission's proposed new Title 38 personnel system 
would severely weaken the VA's ability to retain experienced providers. 
The proposed elimination of Title 5 due process protections and Merit 
Systems Protection Board appeal rights would allow managers to hire and 
promote based on favoritism and political affiliation instead of merit.
    As the Committee contemplates the future of the VA health care 
system, AFGE also strongly urges the Committee to save our treasured 
health care system from ``death by a thousand cuts.'' VA health care is 
already being dismantled ``brick by brick'' through the closures of 
many emergency rooms, intensive care units and other essential medical 
units. AFGE is also very concerned about the impact of VHA's 
overreliance on contractor-run outpatient clinics on quality of care, 
care coordination and costs and the secretive process for issuing and 
renewing these contracts. The most recent stealth attack on VHA is the 
imminent replacement of nearly all VHA compensation and pension (C&P) 
disability exams with contractor exams without any apparent analysis of 
the impact on veterans' disability ratings, access to integrated VHA 
care or costs.
    Recommendations #1 and #9: AFGE vehemently opposes Commission 
recommendations that would result in a massive shift of VA care to the 
private sector through unrestricted access to non-VA primary and 
specialty care and the transfer of primary control over veterans' care 
from the Secretary to an unelected corporate-style board running a new 
VHA Care System. AFGE concurs with Commissioner Michael Blecker that 
these drastic changes would result in ``the degradation or atrophy'' of 
critical veterans' health services. VA would also lose the critical 
core capacity that has enabled it to be the Nation's leading source of 
medical training and cutting edge research. Our nation would also lose 
the critical assistance that the VA provides through its ``fourth 
mission'' during national emergencies and natural disasters, from 
Hurricane Katrina to the Orlando mass shooting.
    VHA must remain the primary source of veterans' care, the exclusive 
provider of primary care and the exclusive care coordinator. VHA must 
retain control over the design and oversight of local, integrated care 
networks. AFGE fully supports the proposal for local integrated care 
networks developed by the Independent Budget veterans' service 
organizations and the similar proposal included in the VA's Plan to 
Consolidate Community Care.
    Putting a private governance board at the helm would also vastly 
reduce the ability of Congress and veterans to hold wrongdoers 
accountable for mismanagement, corruption and patient harm. The 
Commission acknowledged that the board would not have to comply with 
the open government requirements of the Federal Advisory Committee Act 
and most likely would not be subject to the Freedom of Information Act.
    Recommendation #2: The Commission's proposal to relieve the 
Secretary of the requirement under the Millennium Act to report 
annually to Congress on the number of beds closed the previous year 
constitutes another unjustified assault on accountability. AFGE agrees 
that current bed count data is inadequate but the solution is not less 
data. We have repeatedly sought Congressional oversight of ``bed count 
gaming'' where managers manipulate bed count data to hide the number of 
actual beds available to veterans. When beds are closed (primarily due 
to management's unwillingness to hire sufficient nurses), veterans are 
sent to non-VA hospitals that are less equipped to treat their unique 
conditions, often imposing greater costs on veterans and taxpayers.
    If the bed count reporting requirement is eliminated, thousands of 
veterans' beds will be lost forever, staff will be laid off, and 
smaller facilities may not survive. VA beds have also played a critical 
role in our national disaster response plan; during Hurricane Katrina, 
patients were moved to VA medical centers in Houston and other 
locations. Therefore, we urge the Committee to reject this 
recommendation and instead, conduct oversight of ways to improve bed 
count data collection with the input of veterans' groups and 
representatives of front line employees.
    Recommendation #6: AFGE strongly opposes the use of a BRAC-like 
process to address VHA's facility and capital asset needs. We are 
equally opposed to giving a governance board any role in determining 
VHA's infrastructure needs. It is likely that any board-run process 
would be plagued by the same self-interest that impaired the decision 
making process of a Commission filled with health care executives.
    AFGE concurs with the Independent Budget veterans service 
organizations that a far more urgent need is to address current 
infrastructure gaps that threaten safety and interfere with care 
delivery. Clearly, a BRAC is not the answer. The RAND Corporation 
recently reported that through at least 2019, demand for veterans 
'health care services is likely to exceed supply.
    Recommendation #15: In its report, the Commission portrays civil 
service protections afforded to Title 5 employees as the enemy of 
innovation and quality improvement (``a relic of a bygone era'', ``an 
island disconnected from the larger talent market for knowledge-based 
professional and administrative occupations that are mission-
critical''). The Commission then reveals its true agenda for 
eliminating Title 5 rights: it wants to make it easier to fire 
employees it doesn't like and hire through cronyism.
    What the report does not tell us is that the Department of Defense 
federal agencies operate health care systems effectively with Title 5 
workforces that have full due process and collective bargaining rights 
that they use to speak up against mismanagement and negotiate with 
management over working conditions to the benefit of their patients.
    This recommendation would eliminate all Title 5 rights currently 
afforded to the majority of VHA employees. These include full Title 5 
employees, most of whom are service-connected disabled veterans (e.g. 
police, housekeepers, food service workers) and Hybrid Title 38 
employee (e.g. Medical Support Assistants, nursing assistants, 
pharmacists, psychologists and social workers). Both groups would lose 
their right to third party review of removals and demotions by the 
Merit System Protection Board.
    Both groups would also lose most of their collective bargaining 
rights that allow them to negotiate over working conditions such as 
scheduling, assignments and training.
    Veterans who choose to work in VA health care after saving lives on 
the battlefield would also be greatly harmed by this Commission 
recommendation. Federal case law has made it clear that employees 
appointed under Title 38 (Hybrids and full Title 38 employees) are not 
covered by the Veterans Employment Opportunities Act (VEOA) and 
therefore lack veterans preference protections against being passed 
over for a non-veteran in hiring. AFGE concurs with the Independent 
Budget that Congress should enact legislation to extend the VEOA to all 
VHA employees.
    The proposed new Title 38 personnel system would ignore seniority 
when setting pay, at a time when VHA is facing low morale and increased 
attrition among providers with valuable experience because many new 
hires are being paid more than their senior counterparts.

Other recommendations

    AFGE generally supports recommendations #3 (appealing clinical 
decisions), #5 (health care disparities), #14 (diversity and cultural 
competence), #16 (human capital management) and #17 (eligibility for 
those with other-than-honorable discharges).
    AFGE supports modernized information technology (IT) (#7) but urges 
Congress to mandate greater involvement of front-line employees using 
new IT systems to ensure successful implementation.
    AFGE does not take a position on recommendation #4 (VHA 
transformation) because further investigation of the cost-effectiveness 
and lack of transparency of the Veterans Engineering Resource Centers 
is needed. We also take no position on #8 (supply chain) or #12 (VISNs) 
at this time.
    We object to #10 (leadership) if it involves a governance board. 
AFGE also opposes # 11 (leadership succession) because direct hire 
authority will increase cronyism and discrimination against veterans. 
AFGE also opposes #13 (performance standards) because of its 
overreliance on private sector standards that are not applicable to 
VHA's mission or its unique patient population. AFGE is opposed to 
recommendation #18 (expert body to address eligibility) as unnecessary.
    In closing, AFGE urges the Committee to reject all proposals to 
dismantle the VA health care system and shut the doors of its medical 
centers, either through unrestricted access to non-VA care under a 
governance board-run system or legislation to extend the broken 
temporary Choice program. Lawmakers should also investigate the growing 
number of incremental attacks on VA health care including outsourcing 
of C&P exams, contractor-run outpatient clinics and elimination of VA-
provided emergency care and ICU services.
    Instead, AFGE urges the Committee to serve the best interests of 
veterans and the Nation by investing in VA's own high performing 
integrated, veteran-centric health care system. AFGE welcomes the 
opportunity to work with the Committee and VSOs s to ensure continuous 
improvement in our Nation's treasured health care system for veterans.

                                 
                                 AMVETS
    Chairman Miller, Ranking Member Takano, and distinguished Members 
of the Committee,
    Since 1944, AMVETS (American Veterans) has been one of the largest 
congressionally-chartered veterans' service organizations in the United 
States and includes members from each branch of the military, including 
the National Guard, Reserves, and Merchant Marine. We provide support 
for the active military and all veterans in procuring their earned 
entitlements, and appreciate the opportunity to present our views at 
this oversight hearing, ``From Tumult to Transformation: The Commission 
on Care and the Future of the VA Healthcare System.''
    As widely noted, the Commission on Care was established by section 
202 of Public Law 113-146 and worked for ten months examining veterans' 
access issues with the Department of Veterans Affairs (VA) health care, 
and talked with many experts and veterans services organization leaders 
on how best to organize the Veterans Health Administration (VHA) to 
ensure successful delivery of high-quality health care to qualifying 
veterans over the next two decades.
    The Commission released its final report on June 30, 2016 and 
developed 18 recommendations intended for the purpose of extensive 
organizational transformation, not a disjointed fix to everyday issues.
         Redesigning the Veterans' Health Care Delivery System
The VHA Care System

    Recommendation #1: Across the United States, with local input and 
knowledge, VHA should establish high-performing, integrated community 
health care networks, to be known as the VHA Care System, from which 
veterans will access high-quality health care services.

    The Commission Recommends That:

      VHA Care System governing board (see Recommendation #9) 
develop a national delivery system strategy, including criteria and 
standards for creating the VHA Care System, comprising high-performing, 
integrated, community-based health care networks, including VHA 
providers and facilities, Department of Defense (DoD) and other 
federally-funded providers and facilities, and VHA-credentialed 
community providers and facilities.
      Develop integrated community-based health care networks 
with input of local VHA leadership to ensure their composition is 
reflective of local needs and veterans' preferences.
      Integrated, community-based health care networks must 
include existing VHA special emphasis resources. In areas where VHA has 
special expertise, VHA should enhance care by collaborating with 
community care providers to implement services that may not exist.
      Build out networks in a well-planned, phased approach, 
overseen by the new governing board, which determines the criteria for 
the phases to ensure effective strategic execution.
      VHA credential community providers. To qualify for 
participation in community networks, providers must be fully 
credentialed with appropriate education, training, and experience, 
provide veteran access that meets VHA standards, demonstrate high 
quality clinical and utilization outcomes, demonstrate military 
cultural competency, and have capability for interoperable data 
exchange.
      Providers in the networks should be paid using the most 
contemporary payment approaches available to incentivize quality and 
appropriate utilization of health care services.
      The highest priority access to the VHA Care System to be 
provided to service-connected and low-income veterans.
      Eliminate current time/distance criteria (30 days/40 
miles) for community care access.
      Veterans choose a primary care provider from credentialed 
primary care providers in the VHA Care System.
      All primary care providers in the VHA Care System 
coordinate care for veterans.
      VHA Care System provides veterans with health care 
coordination and navigation support.
      Veterans choose their specialty care providers from 
credentialed specialty care providers in the VHA Care System with a 
referral from their primary care provider.

    The Commission noted that the temporary Choice Program has proven 
to be flawed, and that VHA must instead establish high-performing, 
integrated, community-based health care networks, to be known as the 
VHA Care System. With the exception of the creation and involvement of 
a governing board, AMVETS supports this recommendation and will 
continue to work with VA in its goal of consolidating Community Care 
Programs through the MyVA initiative.

    Recommendation #2: Enhance clinical operations through more 
effective use of providers and other health professionals, and improved 
data collection and management.

    The Commission Recommends That:

      VHA increase the efficiency and effectiveness of 
providers and other health professionals and support staff by adopting 
policies to allow them to make full use of their skills.
      Congress relieve VHA of bed closure reporting 
requirements under the Millennium Act.
      VHA continue to hire clinical managers and move forward 
on initiatives to increase the supply of medical support assistants.

    AMVETS is in support of this recommendation.

    Recommendation #3: Develop a process for appealing clinical 
decisions that provides veterans protections at least comparable to 
those afforded patients under other federally supported programs.

    The Commission Recommends That:

      VHA convene an interdisciplinary panel to assist in 
developing a revised clinical appeals process.

    AMVETS is in support of this recommendation and believes that there 
needs to be a national process in place for veterans to appeal clinical 
decisions that is equitable and easy to understand.

    Recommendation #4: Adopt a continuous improvement methodology to 
support VHA transformation, and consolidate best practices and 
continuous improvement efforts under the Veterans Engineering Resource 
Center.

    The Commission Recommends That:

      The Veterans Engineering Resource Center (VERC) assist in 
transformation efforts, particularly in areas of access and that affect 
system-wide activities and require substantial change, such as human 
resources management, contracting, purchasing, and information 
technology.
      The many idea and innovation portals within VHA be 
consolidated under VERC.
      A culture to inspire and support continuous improvement 
of workflow processes be developed and fully funded.
      VHA's reengineering centers be enabled to proactively 
identify problem areas within the system and offer assistance.

    AMVETS is in support of this recommendation.

Health Care Equity

    Recommendation #5: Eliminate health care disparities among veterans 
treated in the VHA Care System by committing adequate personnel and 
monetary resources to address the causes of the problem and ensuring 
the VHA Health Equity Action Plan is fully implemented.

    The Commission Recommends That:

      VHA work to eliminate health disparities by making health 
care equity a strategic priority.
      VHA provide the Office of Health Equity adequate 
resources and the authority to build cultural and military competence 
among all VHA Care System providers and employees.
      VHA ensure that the Health Equity Action Plan is fully 
implemented with adequate staffing, resources, and support.
      VHA increase the availability, quality, and use of race, 
ethnicity, and language data to improve the health of minority and 
other vulnerable veterans with strong surveillance systems that monitor 
trends in health status, patient satisfaction, and quality measures.

    AMVETS is in support of this recommendation.

Facility and Capital Assets

    Recommendation #6: Develop and implement a robust strategy for 
meeting and managing VHA's facility and capital-asset needs.

    The Commission Recommends That:

      VA leaders streamline and strengthen the facility and 
capital asset program management and operations.
      The VHA Care System governing board be responsible for 
oversight of facility and capital asset management.
      Congress provide VHA greater budgetary flexibility to 
meets its facility and capital asset needs and greater statutory 
authority to divest itself of unneeded buildings.
      Congress enact legislation to establish a VHA facility 
and capital asset realignment process based on the DoD Base Realignment 
and Closure Commission (BRAC) process to be implemented as soon as 
practicable. The Commission recommends the VHA Care System governing 
board subsequently make facility decisions in alignment with system 
needs.
      New capital be focused on ambulatory care development to 
reflect health care trends.
      VHA move forward immediately with repurposing or selling 
facilities that have already been identified as being in need of 
closing.

    With the exception of the creation and involvement of a governing 
board, AMVETS supports this recommendation.

Information Technology

    Recommendation #7: Modernize VA's IT systems and infrastructure to 
improve veterans' health and well-being and provide the foundation 
needed to transform VHA's clinical and business processes.

    The Commission Recommends That:

      VHA establish a Senior Executive Service (SES)-level 
position of VHA Care System chief information officer (CIO), selected 
by and reporting to the chief of VHA Care System (CVCS) with a dotted 
line to the VA CIO. The VHA CIO is responsible for developing and 
implementing a comprehensive health IT strategy and developing and 
managing the health IT budget.
      VHA procure and implement a comprehensive, commercial 
off-the-shelf (COTS) IT solution to include clinical, operational and 
financial systems that can support the transformation of VHA as 
described in this report.

    AMVETS is in support of this recommendation.

Supply Chain

    Recommendation #8: Transform the management of the supply chain in 
VHA.

    The Commission Recommends That:

      VHA establish an executive position for supply chain 
management, the VHA chief supply chain officer (CSCO), to drive supply 
chain transformation in VHA. This individual should be compensated 
relative to market factors.
      VA and VHA reorganize all procurement and logistics 
operations for VHA under the CSCO to achieve a vertically integrated 
business unit extending from the front line to central office. This 
business unit would be responsible for all functions in a fully 
integrated procure-to-pay cycle management.
      VA and VHA establish an integrated IT system to support 
business functions and supply chain management; appropriately train 
contracting and administrative staff in supply chain management; and 
update supply chain management policy and procedures to be consistent 
with best practice standards in health care.
      VHA support the Veterans Engineering Resource Center 
(VERC) Supply Chain Modernization Initiative including consistent 
support from leadership, continued funding and personnel, and the 
alignment of plans and funding within OIT to accomplish the 
modernization goals.

    AMVETS is in support of this recommendation.
                 Governance, Leadership, and Workforce
Board of Directors

    Recommendation #9: Establish a board of directors to provide 
overall VHA Care System governance, set long-term strategy, and direct 
and oversee the transformation process.

    The Commission Recommends That:

      Congress provide for the establishment of an 11-member 
board of directors accountable to the President, responsible for 
overall VHA Care System governance, and with decision-making authority 
to direct the transformation process and set long-term strategy. The 
Commission also recommends the governing board not be subject to the 
Federal Advisory Committee Act (FACA) and be structured based on the 
key elements included in Table 5.
      The Board recommend a chief of VHA Care System (CVCS) to 
be approved by the President for an initial 5-year appointment. 
Additionally, the Commission recommends the governing board be 
empowered to reappoint this individual for a second 5-year term, to 
allow for continuity and to protect the CVCS from political 
transitions. If necessary, the CVCS can be removed by mutual agreement 
of the President and the governing board.

    AMVETS does not support establishing a board of directors to be 
responsible for overall VHA governance.

Leadership

    Recommendation #10: Require leaders at all levels of the 
organization to champion a focused, clear, benchmarked strategy to 
transform VHA culture and sustain staff engagement.

    The Commission Recommends That:

      VHA create an integrated and sustainable cultural 
transformation by aligning all programs and activities around a single, 
benchmarked concept.
      VHA align leaders at all levels of the organization in 
support of the cultural transformation strategy and hold them 
accountable for this change.
      VHA establish a transformation office to drive progress 
and report on it to the CVCS and the new VHA Care System board of 
directors.

    With the exception of the creation and involvement of a governing 
board, AMVETS supports this recommendation.

    Recommendation #11: Rebuild a system for leadership succession 
based on a benchmarked health care competency model that is 
consistently applied to recruitment, development, and advancement 
within the leadership pipeline.

    The Commission Recommends That:

      VA establish, as an OMB management priority for VHA, the 
goal of implementing an effective leadership management system in the 
agency.
      VHA executives prioritize the leadership system for 
funding, strategic planning, and investment of their own time and 
attention.
      VHA adopt and implement a comprehensive system for 
leadership development and management that includes a strategic 
priority of diversity and inclusion.
      Congress create more opportunities to attract outside 
leaders and experts to serve in VHA through new and expanded authority 
for temporary rotations and direct hiring of health care management 
training graduates, senior military treatment facility leaders, and 
private not-for-profit and for-profit health care leaders and technical 
experts.

    AMVETS is in support of this recommendation.

    Recommendation #12: Transform organizational structures and 
management processes to ensure adherence to national VHA standards, 
while also promoting decision making at the lowest level of the 
organization, eliminating waste and redundancy, promoting innovation, 
and fostering the spread of best practices.

    The Commission Recommends That:

      VHA redesign VHA Central Office (VHACO) to create high-
performing support functions that serve VISNs and facilities in their 
delivery of veteran-centric care.
      VHA clarify and define the roles and responsibilities of 
the VISNs, facilities, and reorganized VHA program offices in relation 
to one another, and within national standards, push decision making 
down to the lowest executive level with policies, budget, and tools 
that support this change.
      VHA establish leadership communication mechanisms within 
VHACO and between VHACO and the field to promote transparency, 
dialogue, and collaboration.
      VHA establish a transformation office, reporting to the 
CVCS with broad authority and a supporting budget to accomplish the 
transformation of VHA and manage the large-scale changes outlined 
throughout this report.

    AMVETS is in support of this recommendation.

    Recommendation #13: Streamline and focus organizational performance 
measurement in VHA using core metrics that are identical to those used 
in the private sector, and establish a personnel performance management 
system for health care leaders in VHA that is distinct from performance 
measurement, is based on the leadership competency model, assesses 
leadership ability, and measures the achievement of important 
organizational strategies.

    The Commission Recommends That:

    Organizational Performance Measurement

      VHA streamline organizational performance measures, 
emphasize strategic alignment and meaningful effect, and use 
benchmarked measures that allow a direct comparison to the private 
sector.
      The new Office for Organizational Excellence work with 
experts to reorganize its internal structure to align business 
functions with field needs and consolidate and eliminate redundant or 
low-priority activities.

    Personnel Performance Management System

      VHA create a new performance management system 
appropriate for health care executives, tied to health care executive 
competencies, and benchmarked to the private sector.
      The CVCS and all secondary raters hold primary raters 
accountable for creating meaningful distinctions in performance among 
leaders.
      VHA recognize meaningful distinctions in performance with 
meaningful awards.

    AMVETS is in support of this recommendation.

Diversity and Cultural Competence

    Recommendation #14: Foster cultural and military competence among 
all VHA Care System leadership, providers, and staff to embrace 
diversity, promote cultural sensitivity, and improve veteran health 
outcomes.

    The Commission Recommends That:

      VHA implement a systemic approach to establishing 
cultural and military competence across VHA and its community 
providers, and provide the resources required to fully integrate the 
related strategy into veterans' care delivery.
      Cultural and military competency training be required on 
a regular basis for VHA Care System leadership, staff, and providers.
      Cultural and military competency be criteria for allowing 
community providers to participate in the VHA Care System.

    AMVETS is in support of this recommendation.

Workforce

    Recommendation #15: Create a simple-to-administer alternative 
personnel system, in law and regulation, which governs all VHA 
employees, applies best practices from the private sector to human 
capital management, and supports pay and benefits that are competitive 
with the private sector.

    The Commission Recommends That:

      Congress create a new alternative personnel system that 
applies to all VHA employees and falls under Title 38 authority. The 
system must simplify human capital management in VHA; increase fairness 
for employees; and improve flexibility to respond to market conditions 
relating to compensation, benefits, and recruitment.
      VHA write and implement regulations for the new 
alternative personnel system, in collaboration with union partners, 
employees, and managers, that:

      Meets benchmark standards for human capital management in 
the health care sector and is easy for HR professionals and managers to 
administer;
      Promotes veteran preferences and hiring;
      Embodies merit system principles through simplified, 
sensible processes that work for managers and employees;
      Creates one human capital management process for all 
employees in VHA for time and leave, compensation, advancement, 
performance evaluation, and disciplinary standards/processes;
      Provides due process and appeals standards to adverse 
personnel actions;
      Allows for pay advancement based on professional 
expertise, training, and demonstrated performance (not time-in-grade);
      Promotes flexibility in organizational structure to allow 
positions and staff to grow as the needs of the organization change and 
the success of each individual merits;
      Establishes simplified job documentation that is 
consistent across job categories and describes a clear path for staff 
professional development and career trajectories for advancement;
      Eliminates most distinctions (except for benefits) 
between part-time and full-time employees; and
      Grandfathers current employees with respect to pay and 
benefits.

      VHA ensure all positions, to include human resources 
management staff, are adequately trained to fulfill duties.
    AMVETS is in support of this recommendation and believes it is 
crucial for recruiting and retention that VHA employees receive pay and 
benefits on par with the private sector, and that reliable funding in 
place to ensure the continuity of this measure.

    Recommendation #16: Require top executives to lead the 
transformation of HR, commit funds, and assign expert resources to 
achieve an effective human capital management system.

    The Commission Recommends That:

      VHA hire a chief talent leader who holds responsibility 
for the operation's entire HR enterprise, is invested with the 
authority and budget to accomplish the envisioned transformation, and 
reports directly to the chief of VHA Care System.
      VA and VHA prioritize the transformation of human capital 
management with adequate attention, funding, and continuity of vision 
from executive leaders.
      VA align HR functions and processes to be consistent with 
best practice standards of high-performing health care systems.
      VA Human Resources and Administration and the Office of 
Information and Technology should create an HR information technology 
plan to support modernization of the HR processes and to provide 
meaningful data for tracking, quality improvement, and accountability.

    AMVETS is in support of this recommendation.

Eligibility

    Recommendation #17: Provide a streamlined path to eligibility for 
health care for those with an other-than-honorable discharge who have 
substantial honorable service.

    The Commission Recommends That:

      VA revise its regulations to provide tentative 
eligibility to receive health care to former servicemembers with an OTH 
discharge who are likely to be deemed eligible because of their 
substantial favorable service or extenuating circumstances that 
mitigate a finding of disqualifying conduct.

    AMVETS is in support of this recommendation and emphasizes those 
``who are likely to be deemed eligible'' instead of a blanket opening 
of the system to all veterans with an other-than honorable discharge. 
Our organization has heard from many veterans who were improperly 
diagnosed or treated for their invisible wounds - some 40 years ago and 
others much more recently. Considerable progress has been made in the 
last decade in regards to identifying behavioral and physical symptoms 
of mild-to-moderate traumatic brain injuries and post-traumatic stress 
disorder. Veterans who honorably served prior to exhibiting these 
symptoms deserve a path to eligibility to access the specialized health 
care that VA offers.

    Recommendation #18: Establish an expert body to develop 
recommendations for VA care eligibility and benefit design.

    The Commission Recommends That:

      The President or Congress task another body to examine 
the need for changes in eligibility for VA care and/or benefits design, 
which would include simplifying eligibility criteria, and may include 
pilots for expanded eligibility for nonveterans to use underutilized 
VHA providers and facilities, providing payment through private 
insurance.
      The SECVA revise VA regulations to provide that service-
connected-disabled veterans be afforded priority access to care, 
subject only to a higher priority dictated by clinical care needs.

    AMVETS is not in support of this recommendation. On March 13, 2015 
VA announced the formation of the MyVA Advisory Committee (MVAC) which 
brought together experts from the private, non-profit, and government 
sectors to advise the Secretary of Veterans Affairs on improving 
customer service, veteran outcomes, and setting the course for long-
term reform and excellence. MVAC currently has 12 priorities which are 
to:

      Improve the Veterans Experience
      Increase Access to Health Care
      Improve Community Care
      Deliver a Unified Veterans Experience
      Modernize VA's Contact Centers
      Improve the Comp & Pension Exam
      Develop a Simplified Appeals Process
      Continue to Reduce Veteran Homelessness
      Improve Employee Experience
      Staff Critical Positions
      Transform OIT
      Transform Supply Chain

    AMVETS believes it would be in the best interest of VA to continue 
to work with the MVAC on additional goals, as needed, but to not dilute 
the current well-founded relationship. In fact, many of the 
recommendations in the Commission on Care report touch on the 
priorities that VA is working towards and where they have acknowledged 
work needs to be done.
    It is clear from many ongoing and recent reports that the VA health 
care veterans receive is on par or better than the private sector, 
high-quality, specialized, and patients are satisfied with the outcome. 
Access to care remains the most unstable part of the equation, yet 
measureable progress is being made. As stated earlier, AMVETS supports 
VA's plan to consolidate community care to address the access issue, 
and looks forward to its further implementation.
    Mr. Chairman and members of the Committee, this concludes my 
testimony and would be happy to answer any questions the Committee may 
have.

                                 
                     CONCERNED VETERANS FOR AMERICA
    Chairman Miller, Ranking Member Takano and distinguished members of 
the Committee, thank you for allowing Concerned Veterans for America to 
submit for the record on this important issue. In 2014, as the Nation 
stood in shock at the revelation that VA had manipulated data 
contributing to the deaths of veterans, Congress acted quickly, passing 
the Veterans Access, Choice and Accountability Act of 2014. That 
legislation included, among other things, a requirement that a 
commission be established in order to examine the state of VA health 
care and to make recommendations as to how it might be improved. On 
June 30th, 2016, the Commission on Care released its final report 
outlining its recommendations for the future of VA health care after 
nearly nine months of deliberation.
    The Commission had a legislative mandate requiring the 
implementation of all recommendations that the President considers 
feasible, advisable, and able to be implemented without legislation. 
Thus, it was uniquely empowered to make bold recommendations regarding 
the future of veteran health care.
    As was shown by the Independent Assessment-which was also mandated 
by the Veterans Access, Choice and Accountability Act of 2014 and was 
released in September, 2015-``Solving [the] problems [at VA] will 
demand far-reaching and complex changes that, when taken together, 
amount to no less than a system-wide reworking of VHA.'' \1\ 
Unfortunately, the Commission's recommendations amount to far less.
---------------------------------------------------------------------------
    \1\  The MITRE Corporation. (September, 2015). Independent 
Assessment of the Health Care Delivery Systems and Management Processes 
of the Department of Veterans Affairs Volume I: Integrated Report, 17.
---------------------------------------------------------------------------
    To be sure, there are aspects of the recommendations that represent 
real progress for veteran health care delivery.
    Currently, veterans who use VA are the only constituency in the 
country that does not, as a matter of course, have choice in how they 
receive their health care-including federal employees and Medicaid 
users. The Commission's recommendations aim to give veterans increased 
options in this regard. Injecting the principle that veterans should 
have the same opportunities as the rest of the population to select the 
health care delivery that best suits their needs is a step in the right 
direction; this is progress.
    Furthermore, the Commission recommends that the governance of VHA 
be restructured to include a board of directors. This is a 
recommendation that has resurfaced time and again, from the 2009 report 
of the Commission on the Future for America's Veterans \2\ -whose 
signatories included representatives of The American Legion and 
Disabled American Veterans-to the Fixing Veterans Health Care Task 
Force Report put forth by our organization. Currently, VA governance-a 
combination of bureaucratic and congressional management-functions to 
undermine rationalization of VHA operations. As the Commission's final 
report states ``New governance and changes to assure continuity of 
leadership are critical to meeting the needs of VHA and veterans who 
depend on it. At the core of this foundational recommendation, the 
Commission calls for establishing a VHA board of directors''. \3\ This 
is also progress.
---------------------------------------------------------------------------
    \2\  Walters, H. et al. (2009, December). Commission on the Future 
for America's Veterans: Preparing for the Next Generation. Commission 
on the Future for America's Veterans.
    \3\  Schlichting, N. et al. (June, 2016), Commission on Care Final 
Report. 98.
---------------------------------------------------------------------------
    In addition, the recommendations include an appeal to Congress to 
``enact legislation, based on DoD's BRAC model, to establish a VHA 
capital asset realignment process to more effectively align VHA 
facilities and improve veteran's access to care.'' \4\ This much-needed 
VHA facility realignment would allow under-utilized and outdated 
facilities to be jettisoned, allowing the funds required for up-keep to 
be redirected toward caring for veterans. As the report notes, ``If VA 
could sell, repurpose, or otherwise divest itself of unused or 
underutilized buildings in a timely, cost-effective manner, it would 
free funds for the purposes for which they are appropriated.'' \5\
---------------------------------------------------------------------------
    \4\  Ibid., 60.
    \5\  Ibid., 61.
---------------------------------------------------------------------------
    Unfortunately, however, the recommendations stop short of bold 
transformation that would constitute a true ``system-wide reworking,'' 
opting instead for a set of recommendations that, as mentioned, have 
good aspects, but are unlikely to ultimately address the problems that 
VA faces.
    Over the course of the Commission's meetings, some in the media 
began to preemptively question the very legitimacy of the Commission by 
questioning the notion that there had, in fact, been a scandal at VA at 
all, and noting that the Commission had been created out of the 
legislative response to the scandal. This was, apparently, because 
there was fear regarding what kinds of proposals might be put forth by 
the Commission. While these attempts at de-legitimization of the 
Commission were largely unsuccessful, the relative timidity of the 
Commission's final report reflected the effects of the attacks.
    Though it is true that the recommendations incorporate the 
principle of choice, they effectively leave VA at the center of the 
decision-making process regarding where and how veterans receive care.
    The recommendations stipulate that VA should establish ``Integrated 
community-based health care networks'' in response to the 
``misalignment of capacity and demand that threatens to become worse 
over time''. \6\ This, no doubt, is the result of the Commission 
attempting to ``split the difference'' between the measures required to 
create a truly high-preforming, veteran-centric system and the scruples 
of some stakeholders whose lack of imagination or ideological pre-
commitments constrain the range of possibilities that they will 
entertain. While this recommendation understandably attempts to balance 
concerns about care coordination with increased choice, by insisting 
that VA remain in control of credentialing providers, VA remains very 
much at the center of the decision-making process-not the veteran.
---------------------------------------------------------------------------
    \6\  Ibid., 23.
---------------------------------------------------------------------------
    Furthermore, the establishing and credentialing of provider 
networks-which sounds like a relatively simple task-is actually far 
more complicated than it seems. The Commission's recommendation 
essentially proposes a system that resembles TRICARE Prime-a system 
that has proven unworkable. In fact, last year the Military 
Compensation and Retirement Modernization Commission (MCRMC) 
recommended it be replaced by ``TRICARE Choice,'' an updated model 
which would allow ``beneficiaries to choose from a selection of 
commercial insurance plans offered through a Department of Defense 
health benefit program.'' \7\ As Military Times reported, ``Under that 
proposal, beneficiaries would choose a health plan from a menu of 
programs compiled by the federal Office of Personnel Management, 
similar to the health plans offered to federal employees.'' \8\ 
Considering that VA has had difficulty meeting its current 
responsibilities, it is not easy to see how it can be expected to 
effectively do what the Department of Defense was unable to with 
TRICARE Prime. \9\
---------------------------------------------------------------------------
    \7\  Maldon, A., et al. (January, 2015) Report of the Military 
Compensation and Retirement Modernization Commission, 79.
    \8\  Kime, Patricia, "Tricare Choice: What's in it for you?," 
Military Times, March 16, 2015, http://www.militarytimes.com/ story/
military/benefits/health-care /2015/03/16/commission-proposes-tricare- 
choice/24458697/.
    \9\  In 2013, TRICARE made some fairly drastic changes to, and 
reductions in, the availability of TRICARE Prime. For an overview see, 
for example, http://uhs.fsu.edu/insurance/ newDocs/PSA--Reduction--
FS.pdf.
---------------------------------------------------------------------------
    The Independent Assessment admonishes that VA is in need of a 
``system wide reworking'' in order to meet its responsibilities. 
Maintaining the current system as-is, while tacking on the added 
responsibility of establishing and operating networks based loosely on 
a failed model, would only compound VA's challenges.
    There are three other areas where the recommendations are 
deficient.
    First, there is a need, before anything else, to analyze and update 
the overall eligibility and benefits package to determine whether and 
to what extent it needs to be altered. The Commission recommendations 
rely on an outdated eligibility and benefit package that has not been 
critically analyzed and updated since the enactment of the Veterans' 
Health Care Eligibility Reform Act of 1996. Recommendation Number 18 
proposes the ``Establish[ment of] an expert body to develop 
recommendations for VA care eligibility and benefit design.'' \10\ 
Until the VA eligibility and the benefits package is updated and 
modernized, the other Commission recommendations will be hampered and 
only partially effective for operations, cost, quality and access 
improvement, as they will remain out of sync with the best practices of 
modern health care systems.
---------------------------------------------------------------------------
    \10\  Schlichting, N., et al. (June, 2016), Commission on Care 
Final Report, 161.
---------------------------------------------------------------------------
    Second, although there were some high-level cost estimates of 
alternative policy proposals, the recommendations do not include the 
effect of cost mitigation strategies and options that reduce risk for 
VHA policy and planning. For example, documents prepared by Milliman 
Inc. and presented to the Commission indicate that, given certain 
assumptions, Care in the Community could actually be cheaper than care 
received in VA. \11\ Clearly, more careful consideration of the cost/
savings possibilities is needed.
---------------------------------------------------------------------------
    \11\  Jamie Taber, Gideon Lukens, and Merideth Randles, "Estimating 
Costs for Veterans Health Part 2," (presentation, Commission on Care, 
Washington, DC, March 22-23, 2016), 7. https://
commissiononcare.sites.usa.gov/ files/2016/03/ Estimating-Costs-for-
Veterans-Health-Part-2-Day-2- 032316-1.pdf
---------------------------------------------------------------------------
    Third, both the Independent Assessment and the Commission on Care 
have identified a need to conduct a survey representative of the views 
of millions of veterans receiving health care from VHA. \12\ An 
effective model for this kind of a comprehensive survey of veterans 
health care needs and preferences would be those done by the MCMRC and 
cited in their 2015 report. \13\ Until this is done, it will be 
difficult to ascertain exactly what kinds of policies might meet the 
needs of veterans as they understand them.
---------------------------------------------------------------------------
    \12\  See, e.g. The MITRE Corporation. (September, 2015). 
Independent Assessment of the Health Care Delivery Systems and 
Management Processes of the Department of Veterans Affairs Volume I: 
Integrated Report, 2 and A-3.
    \13\  Maldon, A., et al. (January, 2015) Report of the Military 
Compensation and Retirement Modernization Commission, 209.

---------------------------------------------------------------------------
A Way Forward

    While it is true that more data and analysis are needed, there are 
policy proposals available that we believe represent a better way 
forward.
    In June, Rep. Cathy McMorris-Rodgers released a discussion draft of 
a bill entitled The Caring for Our Heroes in the 21st Century Act. \14\ 
We believe this discussion draft contains an excellent proposal that 
reflects the kind of comprehensive health care reform that VA needs. It 
utilizes a systems approach that contains all of the components needed 
to fix the VA health care system in a fiscally responsible way. 
Notably, all of the Commission on Care recommendations are, to a 
greater or lesser extent, compatible with this legislation. And, by 
including an implementation commission in the proposal, the legislation 
would provide a mechanism for further improvement based on the 
additional cost, survey and systems data and analysis referenced above.
---------------------------------------------------------------------------
    \14\  Full text can be found here: https://mcmorris.house.gov/ wp-
content/uploads/2016/06/ McMorris-Rodgers- Discussion-Draft-VA.pdf.
---------------------------------------------------------------------------
    The Caring for Our Heroes in the 21st Century Act offers a truly 
new way of looking at veterans' health care. It goes beyond the VA's 
current centralized model that traps veterans into a deficient system 
of unresponsive and inconsistent care, instead creating a system that 
is flexible and adaptable to the needs of the individual veteran and 
their family. It is, in our opinion, the best legislative proposal 
aimed at fixing VA health care that has yet been put forth. This is 
because it prioritizes the needs of veterans over the VA bureaucracy 
and seeks to transform a dated, sclerotic government agency into a 
high-functioning modern health care organization. It represents a 
change that is long overdue and one that our veterans deserve.
    Reform is never easy, but veterans deserve nothing less.

    For questions or additional information regarding this testimony, 
please contact Mr. Shaun Rieley at Concerned Veterans for America, 
[email protected] or 517-447-3542.

                                
                    Disabled American Veterans (DAV)
    Chairman Miller, Acting Ranking Member Takano, and Members of the 
Committee:
    Thank you for inviting DAV (Disabled American Veterans) to submit 
testimony for the record on the report and recommendations of the 
Commission on Care to improve the veterans health care delivery system 
over the next twenty years. As you know, DAV is a non-profit veterans 
service organization comprised of 1.3 million wartime service-disabled 
veterans that is dedicated to a single purpose: empowering veterans to 
lead high-quality lives with respect and dignity. Virtually all of our 
members rely on the Department of Veterans Affairs (VA) health care 
system for some or all of their health care, particularly for 
specialized treatment related to injuries and illnesses they incurred 
in service to the Nation.
    Mr. Chairman, since the waiting list scandal and access crisis were 
uncovered by Congress and the national media in the spring of 2014, a 
vigorous national debate has commenced about how best VA should provide 
timely, high-quality, comprehensive and veteran-focused health care to 
our Nation's veterans. After dozens of Congressional hearings, multiple 
internal reviews, numerous media investigations, enactment of temporary 
programs and laws, expert stakeholder input, an independent assessment, 
and recently the final report from the Commission on Care, all parties 
need to move from debating VA's future to creating the future VA health 
care system America's veterans deserve.
    With the current veterans ``choice'' program set to expire next 
year, Congress and VA must now choose whether to extend, expand or 
otherwise modify the current choice program, or to move beyond it to 
develop a new system of care based upon an integrated network of VA and 
community providers capable of meeting veterans health care needs in 
the future.
    As this Committee is well aware, Congress passed the Veterans 
Access, Choice, and Accountability Act (Public Law 113-146) in August 
2014 in direct response to the access crisis and waiting list scandal 
at the Phoenix, AZ VA Medical Center and other locations around the VA 
system. The primary purpose of the Choice Act was to address veterans' 
access barriers by creating a new temporary choice program that allowed 
certain veterans to choose community care if they would otherwise be 
forced to wait more than 30 days for requested care, or travel more 
than 40 miles to a VA facility to receive requested care. The act also 
required an outside, independent assessment of the VA health care 
system, and it established the Commission on Care to study and develop 
recommendations for VA to improve the delivery of health care to 
veterans on a longer term basis.
    Since its inception two years ago, the choice program has been 
beset with problems, some caused by the design of the law and others 
due to the urgent implementation schedule mandated by Congress. As the 
number of veterans using the choice program has risen, so have the 
number of problems they have encountered related to care coordination, 
appointment scheduling and provider payments. Although DAV and other 
VSOs supported passage of the choice program as an emergency response 
to the access crisis, it was neither intended to be nor supported as a 
permanent centerpiece of VA's health care delivery model. To address 
technical and implementation challenges with the choice program, 
Congress enacted two subsequent acts (Public Laws 113-175 and 114-41) 
but has not made any further legislative changes while awaiting the 
Commission on Care's final report.
    The Independent Assessment mandated by Public Law 113-146, 
conducted primarily by the MITRE and Rand Corporations., produced 
voluminous data, information and recommendations about improving health 
care to veterans. The first and most important finding of the 
assessment was that the root cause of VA's access problems was a 
``.misalignment of demand with available resources both overall and 
locally.'' leading to the conclusion that ``.increases in both 
resources and the productivity of resources will be necessary to meet 
increases in demand for health care.'' in the future. \1\ Further, 
despite these deficits, the assessment confirmed what DAV, other VSOs 
and dozens of independent studies have reported over the past two 
decades: VA quality of care, on average, is as good as or better than, 
care in the private sector.
---------------------------------------------------------------------------
    \1\  Independent Assessment of the Health Care Delivery Systems and 
Management Processes of the Department of Veterans Affairs, The MITRE 
Corporation, September 1, 2015, p. B-3.
---------------------------------------------------------------------------
    Last year, as mandated by Public Law 114-41, VA developed and 
submitted a plan to Congress to consolidate non-VA community care 
programs, including the choice program. VA's plan would create a high-
performing network comprised of both VA and linked community providers. 
Although VA has already begun taking steps to move forward with a 
consolidation plan, VA is awaiting Congress to enact enabling 
legislation to facilitate the new consolidated program that would bring 
VA's plan to fruition.
    Furthermore, the Independent Budget (IB) veterans service 
organizations (DAV, the Veterans of Foreign Wars, and Paralyzed 
Veterans of America) developed a joint Framework for Veterans Health 
Care Reform that proposed a similar concept of local veteran-focused 
integrated health care networks. Both the IB framework and the VA plan 
call for VA to remain the coordinator and primary provider of care, 
with community providers integrated when needed to guarantee veterans 
access to care. This integrated network approach has been publicly 
supported by dozens of other veterans and related organizations, 
reflecting the views and sentiments of millions of veterans they, and 
DAV, represent.
    The Commission on Care spent almost a year reviewing the 
Independent Assessment, hearing from stakeholders and other outside 
experts, and developing its recommendations to improve health care for 
veterans. While the Commission considered a wide range of ideas and 
options, including proposals to privatize VA, and one plan (the 
``strawman proposal'') that called for dismantling the VA health care 
system over the next two decades. Ultimately, the Commission rejected 
the radical ideas, instead reaching a consensus on recommendations that 
hold many similarities to the plans put forward by VA and mainstream 
veterans organizations. The first and foremost Commission 
recommendation calls for establishment of ``high-performing, integrated 
community-based health care networks'' with VA acting as the 
coordinator and primary provider of care. Although some important 
differences are apparent among the integrated network plan proposed by 
the Commission, the IBVSOs and VA, respectively, each of the three 
proponents calls for strengthening the existing VA health care system 
by incorporating community providers into integrated networks. 
Moreover, each proposal maintains VA as the coordinator and primary 
provider of care, and each views the use of community providers and 
choice as a limited means to expand access in circumstances in which VA 
is unable to meet local demand for care.
    After two years of spirited and passionate debate about the future 
of veterans health care, we envision a clear path forward that builds 
on the strengths of the existing VA system, while expanding access by 
seamlessly integrating the best of community care to ensure no veteran 
must travel too far or wait too long for care. Congress and VA must now 
begin the steps to finalize plans and move forward with the evolution 
of veterans health care. Equally important, both Congress and the next 
Administration must make a commitment to ensure that the resources 
necessary to complete this transformation.
    While we agree with most of the Commission's recommendations to 
strengthen the leadership, management and operation of the VA health 
care system, some remain of concern to us, and are explained below.

Recommendation #1:

    Across the United States, with local input and knowledge, VHA 
should establish high-performing, integrated community-based health 
care networks, to be known as the VHA Care System, from which veterans 
will access high-quality health care services.

    Based on National Resolution No. 238, adopted by delegates to our 
most recent National Convention, that calls for specific reforms in VA 
health care, DAV supports the overall structure and intent of this 
recommendation to create integrated networks. Nevertheless, our 
resolution does not support the recommended option to allow veterans to 
choose any primary or specialty care provider in a network made up of 
VA and private care providers because it would result in less 
coordinated care, worse health outcomes, lower overall quality and 
significantly higher costs that could ultimately endanger the overall 
VA system of care that millions of veterans rely on, particularly 
veterans who were injured or made ill during military service.
    As the Commission report states, ``Veterans who receive health care 
exclusively through VHA generally receive well-coordinated care. 
[whereas] ...fragmentation often results in lower quality, threatens 
patient safety, and shifts cost among payers.'' \2\ While veterans' 
individual circumstances and personal preferences must be taken into 
consideration, decisions about access must first and foremost be based 
on clinical consideration, rather than on arbitrary distances or 
waiting times. However, in order to ensure consistently reliable access 
as well as high quality for enrolled veterans, VA must retain the 
ability to coordinate and manage the networks. As the Commission's 
report states, ``Well-managed, narrow networks can maximize clinical 
quality.'' and, ``Achieving high quality and cost effectiveness may 
constrain consumer choice.'' \3\
---------------------------------------------------------------------------
    \2\  Commission on Care Final Report, June 30, 2016, p. 28.
    \3\  Commission on Care Final Report, June 30, 2016, p. 28.
---------------------------------------------------------------------------
    Furthermore, the Commission's recommended option to allow every 
individual veteran to determine which VA or non-VA providers in the 
network they would use could affect access for other veterans and could 
lead to increased costs. The Commission itself notes that in 
establishing networks, VA ``.must make critical tradeoffs regarding 
their size and scope. For example, establishing broad networks would 
expand veterans' choice, yet would also consume far more financial 
resources.'' \4\ In fact, the Commission's economists estimate that the 
recommended option could increase VA spending by at least $5 billion in 
the first full year, and that it could be as high as $35 billion 
without strong management control of the network. The Commission also 
considered a more expanded choice option to allow veterans the ability 
to choose any VA or non-VA provider - without requiring them to be part 
of any defined network - and the economists estimated such a plan could 
cost up to $2 trillion more than current VA expenditures over the first 
ten years.
---------------------------------------------------------------------------
    \4\  Ibid.
---------------------------------------------------------------------------
    While we agree that the VA health care system must evolve by 
integrating community providers into its networks, VA must retain the 
ability to coordinate care and manage workload within the networks. In 
general, the networks must have the ability to expand to include 
community providers if veterans face access challenges or VA is unable 
to provide sufficiently high quality care. The size, scope and design 
of local networks, as well as clinical workflow, must be directed by VA 
based on a demand-capacity analysis in each market in order to assure 
quality and adequate access to care.
    DAV is particularly concerned about the Commission's projection 
that more than 40% of the medical care currently provided inside VA 
facilities would shift to non-VA network providers if this recommended 
option is implemented. \5\ Note that the ``40% estimate is derived from 
the Commission's estimate that 60% of the 68% of care that is eligible 
for community care under the recommended option would shift.) Such a 
large transfer of patient care workload from VA facilities would 
produce a dramatic impact on VA's ability to maintain a critical mass 
of patients necessary to safely and efficiently operate its programs 
and facilities. An outflow of workload of this magnitude would 
undoubtedly lead to a number of facilities cutting services or closing, 
thereby depriving veterans of the option to receive all or even any of 
their care from VA providers. The elimination of VA as an option would 
be particularly devastating for severely injured, ill and disabled 
veterans who rely on VA for specialized care.
---------------------------------------------------------------------------
    \5\  Ibid, p. 31.
---------------------------------------------------------------------------
    Furthermore, we are alarmed that the Commission report specifically 
states that no consideration was given to whether its recommended 
option would weaken or diminish VA's medical and prosthetic research, 
academic, and national emergency preparedness missions, which continue 
to be vital aspects of the VA health care system overall. In 
particular, the VA research program serves as a harbor to ensure that 
veterans receive the most current, safest and most effective treatments 
available for service-related conditions, and to advance the standard 
of health care both within VA and beyond. The report also explicitly 
states that the Commission did not consider whether a sufficient number 
of private providers would be willing to take on additional patient 
loads from VA at Medicare reimbursement rates, how such a shift from VA 
to private providers would affect underserved communities, or how 
reduced patient workload within VA facilities would affect the quality 
of care of veterans remaining in the VA system. \6\
---------------------------------------------------------------------------
    \6\  Commission on Care Final Report, June 30, 2016, pp. 32-33.
---------------------------------------------------------------------------
    In addition to these concerns, it is critical to emphasize that the 
creation of seamless integrated community networks cannot be 
accomplished quickly or without a significant infusion of new resources 
to develop and deploy a modern IT and management infrastructure 
necessary to successfully operate the networks, particularly to achieve 
seamless scheduling, care coordination and provider payment functions. 
We agree with the Commission that networks should be, ``. built out in 
a well-planned, phased approach.'' \7\ Furthermore, it is imperative 
that before and during the development of these networks, VA should 
regularly consult and collaborate with local and national veterans 
organizations and leaders, as well as other key stakeholders and 
community partners to gauge progress.
---------------------------------------------------------------------------
    \7\  Ibid, p. 4.

---------------------------------------------------------------------------
Recommendation #6:

    Develop and implement a robust strategy for meeting and managing 
VHA's facility and capital-asset needs.

    DAV agrees with the recommendation to streamline and strengthen 
VA's facility and capital asset program management and operations. We 
also agree with the recommendation to give VA greater budgetary 
flexibility to meet its facility and capital asset needs, particularly 
overcoming Congressional budget scoring rules that have complicated 
VA's ability to open new leased clinic space. We also agree that VA 
needs to have the ability to realign its health care resources to 
address changes in the veteran population, demographics, location and 
health care needs, as well as evolving health science and technology. 
However, we do not agree that it is necessary or advisable to create an 
inflexible process, similar to the BRAC process, which has been 
employed to close military bases. The development of integrated 
community networks must be based on dynamic demand and capacity 
analysis, which would include modeling of the need to expand, contract, 
or relocate VA facilities. Local stakeholder input would be essential 
to ensure that local health care coverage would not be negatively 
affected by any facility realignment. DAV and our IB partners also 
believe that expanded usage of public-private partnerships should be 
explored as another way to address VA's infrastructure needs.
    However, even with these reforms, significant increases in 
infrastructure funding will be necessary to address VA's access 
challenges. The Independent Assessment discussed earlier in this 
statement found that the, ``..capital requirement for VHA to maintain 
facilities and meet projected growth needs over the next decade is two 
to three times higher than anticipated funding levels, and the gap 
between capital need and resources could continue to widen.'' \8\ 
Without change, the estimated gap will be between $26 and $36 billion 
over the next decade. For FY 2017, DAV and our IB partners recommended 
$2.5 billion for all VA infrastructure programs; however, the 
Administration requested only $1 billion. Both chambers of Congress 
settled for this inadequate funding level in this pending 
appropriation. While certainly a need exists to maximize savings from 
closing unused or underutilized facilities, the Commission's report 
points out that these savings are estimated at only $26 million per 
year, an amount that would not begin to make up for the shortfall in 
infrastructure spending required to maintain the remaining VA system. 
Also, under budget formulation policies, any such savings from closed 
or downsized facilities most likely would be lost to VA. Unless 
Congress and future Administrations begin to provide realistic funding 
levels to repair, maintain and replace existing VA health care 
infrastructure, these reforms will be significantly challenged.
---------------------------------------------------------------------------
    \8\  Independent Assessment of the Health Care Delivery Systems and 
Management Processes of the Department of Veterans Affairs, The MITRE 
Corporation, September 1, 2015, p. K-1.

---------------------------------------------------------------------------
Recommendation #9:

    Establish a board of directors to provide overall VHA Care System 
governance, set long-term strategy, and direct and oversee the 
transformation process.

    DAV does not support the recommendation to take control of the VA 
health care system away from the VA Secretary and give it to an 
unelected, independent Board of Directors that would be less 
accountable to the President, Congress, veterans and the American 
people. Separating veterans health care services from other veterans 
benefits and services would result in a loss of comprehensive and 
coordinated support for veterans, particularly those injured or ill 
from their service. Creating another layer of bureaucracy between 
veterans and the VA health care system would create more problems than 
solutions. We appreciate the Commission's interest in recommending 
greater stability and continuity of leadership; however; better means 
are available to accomplish these goals without undercutting VA's 
uniquely integrated system of services and benefits.
    Rather than create an inherently political and bureaucratic layer 
between veterans and their health care system, these same purposes 
could be accomplished through the establishment of strategic planning 
mechanisms currently being used by the Departments of Defense and 
Homeland Security. Specifically, we propose that VA be required to 
undergo a Quadrennial Veterans Review (QVR), similar to the Quadrennial 
Defense Review (QDR) and Quadrennial Homeland Security Review (QHSR). 
The QVR, similar to its counterparts, would establish a national 
strategy to guide the creation of federal policies and programs for 
veterans, and would be timed to overlap with Presidential 
administrations to provide continuity and insulation from political 
influence.
    In addition, similar to the Departments of Defense and Homeland 
Security, there should be established a Future Year Veterans Program 
(FYVP) that would establish five-year resource needs and projections 
that VA would need in order to implement the policies and programs set 
out in the QVR. VA should also fully convert its budgeting and spending 
systems to a Planning, Programming, Budgeting and Execution (PPBE) 
system also used by the Departments of Defense and Homeland Security in 
order to assure accountability in how VA allocates it resources to meet 
immediate, short-term and long-term strategic goals. Establishing new 
planning and budgeting functions could provide VA stability and 
continuity in a more practical, effective and feasible manner than 
trying to establish a semi-independent governance board.
    In addition, consideration should be given to overlapping the terms 
of the Under Secretary for Health and other senior VA leaders with 
Presidential elections, to provide additional stability and continuity, 
and to insulate these officials from political influence.
       ADDITIONAL COMMENTS ON COMMISSION ON CARE RECOMMENDATIONS
Recommendation #2:

    Enhance clinical operations through more effective use of providers 
and other health professionals, and improved data collection and 
management.

    DAV supports this recommendation but notes that additional funding 
would be essential in order for VA to hire the new support staff 
discussed by the Commission.

Recommendation #3:

    Develop a process for appealing clinical decisions that provides 
veterans protections at least comparable to those afforded patients 
under other federally-funded programs.

    DAV supports the recommendation to create a fair, transparent and 
timely process to appeal clinical decisions, and we have testified 
before Congress on this concept. We would emphasize the importance of 
including veteran patients and veterans advocates during the 
development of this procedure.

Recommendation #4:

    Adopt a continuous improvement methodology to support VHA 
transformation, and consolidate best practices and continuous 
improvement efforts under the Veterans Engineering Resource Center.

    DAV supports the recommendation for VHA to adopt a model of 
continuous improvement and to share and standardize best practices in 
accordance with our Resolution No. 244, which calls for VA to maintain 
a comprehensive health care system for enrolled veterans, endemic to 
which is continuous improvement and the advent of best practices. We 
also agree that the three Veterans Engineering Resource Centers should 
play a more prominent role in the maintenance and improvement of such a 
system. Currently, VA employs numerous clinical researchers and 
operates numerous centers of excellence, health services research and 
development centers, and other centers devoted to continuous 
improvement, quality enhancement, patient safety and other factors 
affecting the state of care for veterans' health. Each has its own 
history, mission and proven accomplishments that have and continue to 
serve veterans. In addition, because systems engineering, as with other 
systemic change approaches, has limitations particularly in network-
based complex adaptive systems, such limitations should also be 
considered when implementing this recommendation.

Recommendation #5:

    Eliminate health care disparities among veterans treated in the VHA 
Care System by committing adequate personnel and monetary resources to 
address the causes of the problem and ensuring the VHA Health Equity 
Action Plan is fully implemented.

    DAV supports the recommendation to more effectively address health 
care equity issues. We refer the Committee to DAV's 2014 report, Women 
Veterans: The Long Journey Home, which details the barriers and program 
inequities that women veterans face. Our report offered specific 
recommendations to remedy these challenges.

Recommendation #7:

    Modernize VA's IT systems and infrastructure to improve veterans' 
health and well-being and provide the foundation needed to transform 
VHA's clinical and business processes.

    DAV supports the recommendation to modernize and give VHA 
functional control over its IT systems in accordance with our 
recommendations in the IB. To assure full coordination of the proposed 
integrated networks will require full implementation of new IT systems 
and complete interoperability across VA and network providers. We would 
again note that significant time and dedicated resources will be 
required to achieve this goal.

Recommendation #8:

    Transform the management of the supply chain in VHA.

    DAV generally agrees with this recommendation. We would note in 
consonance with our recommendations in the IB that some supply and 
acquisition programs and services are critically important to veterans, 
such as those affecting the procurement of prosthetics and sensory 
aids. Careful consideration must be given to balancing national 
standardization concepts with local flexibility to meet the unique 
needs and preferences of veterans who need these specialized services 
to address their disabilities.

Recommendation #10:

    Require leaders at all levels of the organization to champion a 
focused, clear, benchmarked strategy to transform VHA culture and 
sustain staff engagement.

    DAV supports this recommendation, on the basis of National 
Resolution No. 238, urging VA to adopt a broad reform agenda for the 
future in health care, and in that respect would note our specific 
support for VA's MyVA initiative that is already beginning to address 
these concerns.

Recommendation #11:

    Rebuild a system for leadership succession based on a benchmarked 
health care competency model that is consistently applied to 
recruitment, development, and advancement within the leadership 
pipeline.

    DAV supports the intent of this recommendation on the basis of our 
recommendations in the IB dealing with the need for reforms in VA's 
human resources management programs, and again notes that VA's MyVA 
initiative and other new leadership programs are also beginning to 
address these issues.

Recommendation #12:

    Transform organizational structures and management processes to 
ensure adherence to national VHA standards, while also promoting 
decision making at the lowest level of the organization, eliminating 
waste and redundancy, promoting innovation, and fostering the spread of 
best practices.

    DAV supports eliminating waste and redundancy and standardization 
where possible; however, because this recommendation would impact such 
a large part of VHA organizational structure, we believe it requires 
further study.

Recommendation #13:

    Streamline and focus organizational performance measurement in VHA 
using core metrics that are identical to those used in the private 
sector, and establish a personnel performance management system for 
health care leaders in VHA that is distinct from performance 
measurement, is based on the leadership competency model, assesses 
leadership ability, and measures the achievement of important 
organizational strategies.

    DAV generally supports the intent of this recommendation, although 
we would emphasize that not all performance metrics could or should be 
identical to those used in the private sector due to the unique nature 
of the VA health care system and the significant differences between 
patient case mix in VA facilities versus those in private care. Health 
care outcomes and patient satisfaction could be measured consistently 
between VA and private providers; however, metrics related to cost, 
value or efficiency are less likely to provide meaningful comparisons 
because of differences in how VA and private systems are funded, the 
role of private health insurance, the primary-preventative model of VA 
health care and the interconnection of VA's complementary services and 
benefits-none of which generally exist in private care. VA should 
continue to develop and optimize metrics that provide meaningful 
feedback about its unique health care model, as well as help develop 
new benchmarks that both VA and the private sector can use to 
strengthen performance measurement.

Recommendation #14:

    Foster cultural and military competence among all VHA Care System 
leadership, providers, and staff to embrace diversity, promote cultural 
sensitivity, and improve veteran health outcomes.

    DAV generally agrees with this recommendation. In terms of 
providing military culture competency, VA providers are generally well-
trained, though there remains room for improvement. As networks are 
developed, transferring some level of military/veteran cultural 
competency to non-VA providers will be critical, although they may 
never possess the same level of immersion or understanding about the 
impact of military service as VA providers who work full-time inside a 
veteran-focused environment. We would also agree that non-VA providers 
should be expected to deliver the same level of veteran-focused care as 
VA providers, such as by requiring all providers to ask patients about 
their military history and possible toxic exposures, as is required for 
VA providers.

Recommendation #15:

    Create a simple-to-administer alternative personnel system, in law 
and regulation, which governs all VHA employees, applies best practices 
from the private sector to human capital management, and supports pay 
and benefits that are competitive with the private sector.

    DAV recognizes the need to strengthen VA's ability to recruit, 
hire, retain and hold accountable all VA employees. Nevertheless, we do 
not take a position on whether the creation of an alternative personnel 
system would be the best way to accomplish these goals.

Recommendation #16:

    Require VA and VHA executives to lead the transformation of HR, 
commit funds, and assign expert resources to achieve an effective human 
capital management system.

    DAV supports this recommendation on the basis of our human 
resources management concerns expressed in the IB.

Recommendation #17:

    Provide a streamlined path to eligibility for health care for those 
with an other than honorable discharge who have substantial honorable 
service.

    DAV supports this recommendation on the basis of our National 
Resolution No. 226, adopted by delegates to our most recent National 
Convention, which calls for a more liberal review of other than 
honorable discharges for purposes of receiving VA benefits and health 
care services in cases of former servicemembers whose post-traumatic 
stress disorder, traumatic brain injury and military sexual trauma or 
other trauma contributed to their administrative discharges 
characterized as other than honorable.

Recommendation #18:

    Establish an expert body to develop recommendations for VA care 
eligibility and benefit design.

    DAV does not believe a new commission or task force is needed to 
make adjustments to veterans health care eligibility or benefits 
design. The Secretary already possesses tools to control access through 
enrollment decisions, and Congress retains complete discretion to 
modify eligibility requirements, to adjust the health care benefits 
package or other benefits through the legislative process.
    Mr. Chairman, this concludes DAV's testimony. We thank the 
Committee for inviting DAV to submit this testimony for the record, and 
we are prepared to respond to any questions by Committee Members on the 
Commission's report and our positions on VA health care reform.

                                 
                          THE AMERICAN LEGION
    Chairman Miller, Acting Ranking Member Takano and distinguished 
members of the Committee, on behalf of National Commander Charles E. 
Schmidt and The American Legion; the country's largest patriotic 
wartime service organization for veterans, comprising over 2 million 
members and serving every man and woman who has worn the uniform for 
this country; we thank you for the opportunity to comment regarding The 
American Legion's position on the Commission on Care and the future of 
the VA health care system.
    The American Legion has worked extensively on matters concerning 
veterans for nearly 100 years. Our work includes all business lines 
managed and operated by The Department of Veterans Affairs (VA) through 
sustained physical involvement, review of national policy, and 
donations of resources, funding, personnel, and experience.
    It is with the voice and support of the largest voting block of 
veterans in the country that The American Legion presents the following 
analysis and recommendations regarding the report offered by The 
Commission on Care dated June 30, 2016.
    The American Legion acknowledges the Commission relied heavily on 
the Independent Assessment as per congressional instructions, as well 
as some limited testimony from VA, Veteran Service Organizations (VSO), 
and media reports; but the primary foundation for discussion and 
findings were based on internal discussions among commissioners based 
on individual filters, experiences, and loyalties; and thus this report 
is reflective of those individual opinions.
    The American Legion will not address the entire report, rather we 
will highlight the parts we believe have merit for further study or 
implementation, and those areas where we believe implementation would 
be detrimental to all veterans seeking health care from the VA, whether 
directly, or through a managed community relationship.
    We are in general agreement with most of the Commission's 
recommendations and are pleased to see they are in line with 
transformation currently underway at VA through the MyVA initiative.
    As you know, three of 15 Commission members did not sign the final 
report, with two commissioners opposing the final report because they 
felt it didn't go far enough. Commissioner Michael Blecker also did not 
sign, saying the main recommendation, for the Veterans Health 
Administration (VHA) Care System, went too far.
    The American Legion's positioning on the report places us closer to 
Commissioner Blecker's. As he explained in his June 29 dissent:

    I cannot agree to the Commission's first and most significant 
recommendation, establishment of a proposed ``VHA Care System.'' Given 
the design of this proposed new delivery model, the adoption of this 
proposal would threaten the survival of our nation's veteran-centered 
health care system as a choice for the millions of veterans who rely on 
it. Although this is only one of many recommendations in the Report, 
this single recommendation risks undermining rather than strengthening 
our veteran-centered health care system, and I cannot agree to it. \1\

    \1\  http://www.prweb.com/releases /2016/07/prweb13535231.htm
---------------------------------------------------------------------------
    We also believe that recommendations of more privatization that 
some are trying to mask as ``Choice'' fail to take into consideration 
that veterans already have a myriad of choices, more so than most 
Americans. Choosing to see a contracted primary care physician as 
opposed to a VA primary care physician is a choice most veterans using 
VA health care already have through their private insurance, Tricare, 
Medicare, Medicaid or several other options. These ``choices'' also 
come with additional expenses to the veteran. Converting VA health care 
to an insurance payer would increase out-of-pocket expenses for 
veterans who rely solely on VA for all of their health care needs, and 
who may not have alternate insurance options.
    That said, here are our initial comments on a few of the most 
important recommendations:

    Recommendation #1: Across the United States, with local input and 
knowledge, VHA should establish high-performing, integrated community 
health care networks, to be known as the VHA Care System, from which 
veterans will access high-quality health care services.

    This recommendation includes several sub-recommendations. Here we 
will address two of the most salient ones separately because they each 
have separate and distinct implications and will require individualized 
policy and/or legislative modifications in order to accomplish. The 
overarching theme of this recommendation involves a robust and 
integrated community care network.

    A.The American Legion supports realigning VA's community care 
program and has provided testimony that discusses its restructuring. In 
relevant part, we said:

    The American Legion believes in a strong, robust veterans' health 
care system that is designed to treat the unique needs of those men and 
women who have served their country. However, even in the best of 
circumstances there are situations where the system cannot keep up with 
the health care needs of the growing veteran population requiring VA 
services, and the veteran must seek care in the community. Rather than 
treating this situation as an afterthought, an add-on to the existing 
system, The American Legion has called for the Department of Veterans 
Affairs (VA) to ``develop a well-defined and consistent non-VA care 
coordination program, policy and procedure that includes a patient 
centered care strategy which takes veterans' unique medical injuries 
and illnesses as well as their travel and distance into account. \2\
---------------------------------------------------------------------------
    \2\  Resolution No. 46: (Oct 2012): Department of Veterans Affairs 
(VA) Non-VA Care Programs
---------------------------------------------------------------------------
    Over the years, VA has implemented a number of non-VA care programs 
to manage veterans' health care when such care is not available at a VA 
facility, could not be provided in a timely manner, or is more cost 
effective through contracting vehicles. Programs such as Fee-Basis, 
Project Access Received Closer to Home (ARCH), Patient-Centered 
Community Care (PC3), and the Veterans Choice Program (VCP) were 
enacted by Congress to ensure eligible veterans could be referred 
outside the VA for needed, and timely, health care services.
    Congress created the VCP after learning in 2014 that VA facilities 
were falsifying appointment logs to disguise delays in patient care. 
However, it quickly became apparent that layering yet another program 
on top of the numerous existing non-VA care programs, each with their 
own unique set of requirements, resulted in a complex and confusing 
landscape for veterans and community providers, as well as the VA 
employees that serve and support them.
    Therefore, Congress passed the Surface Transportation and Veterans 
Health Care Choice Improvement Act of 2015 (VA Budget and Choice 
Improvement Act) in July 2015 after VA sought the opportunity to 
consolidate its multiple care in the community authorities and 
programs. This legislation required VA to develop a plan to consolidate 
existing community care programs.
    On October 30, 2015, VA delivered to Congress the department's Plan 
to Consolidate Community Care Programs, its vision for the future 
outlining improvements for how VA will deliver health care to veterans. 
The plan seeks to consolidate and streamline existing community care 
programs into an integrated care delivery system and enhance the way VA 
partners with other federal health care providers, academic affiliates 
and community providers. It promises to simplify community care and 
gives more veterans access to the best care anywhere through a high 
performing network that keeps veterans at the center of care.
    Generally, The American Legion supports the plan to consolidate 
VA's multiple and disparate purchased care programs into one New 
Veterans Choice Program (New VCP). We believe it has the potential to 
improve and expand veterans' access to health care.

Network Structure

    The American Legion supports allowing VA to set up tiered networks. 
As we understand it, this structure is meant to empower veterans to 
make informed choices, provide access to the highest possible quality 
care by identifying the best performing providers in the community, and 
enabling better coordination of care for better outcomes. However, it 
does not dictate how veterans will use the network. The American Legion 
wants to make clear, though, that we do not support a wholesale option 
to circumvent the VA infrastructure or health care system entirely.

Prompt Pay

    We support a provision mandating that all claims be made 
electronically by January 1, 2019 and an eligible provider should 
submit claims to Secretary within 180 days of furnishing care or 
services.

Episode of Care

    Provisions ensuring that an eligible veteran receives such care and 
services through the completion of the episode of care, including all 
specialty and ancillary services deemed necessary as part of the 
treatment recommended in the course of such care and services.

Emergency/Urgent Treatment

    The American Legion supports requiring VA to reimburse veterans for 
the reasonable value of emergency treatment or urgent care furnished in 
a non-Department facility in a final bill.

Conclusion

    Ensuring veterans have access to appropriate, timely, high-quality 
care is critical. VA needs to overhaul its outside care reimbursement 
programs, consolidating them into a more efficient bureaucracy able to 
dynamically interact with the network of federal, public, and private 
providers that are to supplement VA direct provided care. \3\

    \3\  http://www.legion.org/legislative/ testimony/231623/pending-
veterans-affairs-legislation
---------------------------------------------------------------------------
    B.Choice of primary care provider

    The American Legion opposes allowing a complete option of primary 
care providers within the proposed VHA Care System based on the 
Commission's faulty analysis. The Commission supports this 
recommendation based on a Congressional Budget Office (CBO) estimate of 
cost that was calculated using Medicare rates. The Commission, however, 
gave no consideration to Medicare rules for billing structure and how 
those rules would apply to the current quality of care provided to 
veterans through VHA primary care physicians. VHA physicians are not 
restricted as to the amount of time they are able dedicate to each 
patient, or the number of presentations per patient. Medicare, on the 
other hand only provides payment based on a 10 or 15 minute 
consultation, which then denies veterans the full complement and 
quality of care they are entitled to through their earned benefits. If 
scored by CBO properly, the cost of this recommendation would be at 
least triple if not more, and is thus financially unsustainable. The 
American Legion finds the recommendation and subsequent analysis by the 
Commission to be in error and believe that it should not be considered 
by the Administration.

    Recommendation #9: Establish a board of directors to provide 
overall VHA Care System governance, set long-term strategy, and direct 
and oversee the transformation process.

    The American Legion does not support the creation of a governing 
board. We do find value in the Commission's discussion and 
recommendations that point out inconsistent leadership due to rotating 
political appointments and a leadership vision with a lack of 
continuity. The American Legion supports appointing a Veterans Health 
Administration (VHA) leader for a minimum of a 5 year term, with an 
option for an additional 5 year reappointment. We could also support 
the same consistency for the Deputy Secretary position.
    Congress is also part of the problem here. When Representative Beto 
O'Rourke addressed the Commission on Care on March 22nd of this year, 
he noted that part of the problem with VA has been a severe lack of 
continuity in oversight due to an unwillingness of Members to serve on 
the VA Committees: it's not glamorous, there are real problems to be 
addressed, and there are no ``mission accomplished'' banners. Members 
tend to leave the Committee as soon as they are able - to the point 
that, on day one as a new congressman assigned to the Committee, he 
found himself third in seniority on the Democratic side.
    The American Legion thinks consideration should also be given to 
proposals that the Secretary of Veterans Affairs develop and submit to 
Congress a Future-Years Veterans Program and a quadrennial veteran's 
review. \4\
---------------------------------------------------------------------------
    \4\  https://www.congress.gov/bill/ 114th-congress/house-bill/216

    Recommendation #15: Create a simple-to-administer alternative 
personnel system, in law and regulation, which governs all VHA 
employees, applies best practices from the private sector to human 
capital management, and supports pay and benefits that are competitive 
---------------------------------------------------------------------------
with the private sector.

    This proposal to shift all 300,000 VHA employees away from Title 
Five and onto Title 38 to provide the department with more flexibility 
in pay, benefits and recruiting is worth serious consideration. While 
the change would be designed to ease hiring and firing at the agency, 
the report says the new system should maintain due process appeal 
rights and merit system principles and we concur.

    Recommendation #18: Establish an expert body to develop 
recommendations for VA care eligibility and benefit design.

    Included in this recommendation is consideration of the feasibility 
of allowing veterans' family members and currently ineligible veterans 
to purchase VHA care through their health plans in areas where VHA 
hospitals and other facilities might otherwise need to close. In many 
parts of the country, VHA currently maintains hospitals and other 
health care facilities that are underutilized or in danger of becoming 
so. A related challenge is maintaining safe volume of care when patient 
loads decline.
    As the report notes, ``closing a low-volume hospital may be the 
answer in some instances. But closing VHA facilities reduces the 
choices available to veterans. Increasing the volume of patients 
treated by VHA in areas where it currently has excess capacity may 
ameliorate these challenges.''
    Appendix C of the report discusses the outline of developing pilot 
programs to test the feasibility of avoiding VA hospital closures by 
allowing veterans' spouses and currently ineligible veterans to 
purchase VA care in selected areas. The American Legion supports 
further investigation of this proposal.
    The American Legion appreciates the hard work from all of the 
commission members and we look forward to working with this 
administration and the incoming Congress and administration to ensure 
veterans are provided with the high level of expert health care that 
they have earned.
    Secretary McDonald's words on the report serve as a worthy stopping 
point for now: ``However, until all veterans say they are satisfied, I 
won't be satisfied. Nobody at VA will be satisfied, but our progress so 
far proves that VA's current leadership, direction and momentum can 
produce the necessary transformation.''
                               Conclusion
    As always, The American Legion thanks this Committee for the 
opportunity to explain the position of the over 2 million veteran 
members of this organization. For additional information regarding this 
testimony, please contact Mr. Warren J. Goldstein at The American 
Legion's Legislative Division at (202) 861-2700 or 
[email protected].

                                 
  THE ENLISTED ASSOCIATION OF THE NATIONAL GUARD OF THE UNITED STATES
    The Enlisted Association of the National Guard of the United States 
(EANGUS) was created in 1970 by a group of senior Non-Commissioned 
Officers. It was formally organized / incorporated in 1972 in Jackson, 
Mississippi, with the goal of increasing the voice of enlisted persons 
in the National Guard on Capitol Hill for enlisted National Guard 
issues. Beginning with twenty-three states, EANGUS now represents all 
54 states and territories, with a constituency base of over 414,000, 
hundreds of thousands of family members, as well as thousands of 
retired members.
    Headquartered and with offices in Alexandria, Virginia, EANGUS is a 
long-time member of The Military Coalition (TMC) and is actively 
engaged with the Guard/Reserve Committee, the Health Care Committee, 
and the Veterans Committee. EANGUS often partners with other National 
Guard related associations such as the National Guard Association of 
the United States (NGAUS), the Adjutants General Association of the 
United States (AGAUS) and the Reserve Officers Association (ROA) to 
pursue common legislative goals and outcomes.
    EANGUS is a non-profit organization that is dedicated to promoting 
the status, welfare and professionalism of enlisted members of the 
National Guard by supporting legislation that provides adequate 
staffing, pay, benefits, entitlements, equipment and installations for 
the National Guard.
    The legislative goals of EANGUS are published annually. The goals 
and objectives are established through the resolution process, with 
resolutions passed by association delegates at the annual conference. 
From these resolutions come the issues that EANGUS will pursue in 
Congress, the Department of Defense, and in the Department of Veterans 
Affairs.
    President - Chief Master Sergeant John Harris, US Air Force Retired
    Executive Director - Sergeant Major Frank Yoakum, US Army Retired
    Legislative Director - Mr. Daniel Elkins

The Veterans Health Administration (VHA) Care System

    Recommendation 1: Across the United States, with local input and 
knowledge, VHA should establish high-performing, integrated community 
health care networks, to be known as the VHA Care System, from which 
veterans will access to high-quality health care services.

    The Enlisted Association of the National Guard of the United States 
(EANGUS) recommends integrated, locally based health care networks that 
will take advantage of the current public and private health care 
infrastructure. These local networks will provide the aid necessary to 
serve their community's veterans and their health care needs. 
Furthermore, we recommend that the U.S. Department of Veterans Affairs 
(VA) remains the coordinator and guarantor of care for veterans. It is 
the VA's role to develop the systems necessary to equip veterans to 
make informed decisions on behalf of their health care needs.
    While EANGUS supports the elimination of current wait-time and 
distance-based eligibility standards, we fully recommend that the VA 
remains the primary care provider for veterans when such care is 
readily available. When the VA is unable to be the primary care 
provider, veterans must be given the opportunity to present their 
personal preferences and needs to a VA health care professional in 
order to find a provider - whether they're private, public, or VA - 
that best suits them. This procedure would not only empower veterans to 
make informed decisions, but would also best utilize the networks 
within the VHA Care System.
    We also recommend that the VA have the power to waive primary care 
referral for such specialty care like optometry and audiology that do 
not necessarily require a primary care consult.
    And, while EANGUS is in support of a phased implementation of the 
VHA Care System that requires ongoing evaluation and management, we are 
not in agreement with Recommendation Nine. We recommend that the 
construction and integration of local networks be managed by a team of 
VA subject matter experts, receiving consistent guidance from local VA 
health care professionals and other Veterans Service Organizations.

Clinical Operations

    Recommendation 2: Enhance operations through more effective use of 
providers and other health care professionals, and improved data 
collection and management.
    EANGUS fully supports this recommendation to implement training 
programs for medical support assistants (MSA). MSAs will ensure that VA 
health care providers are able to spend more time actually treating 
veterans, rather than being tied down with administrative tasks.
    In addition, the VA must also be able to keep up with the high 
turnover rates associated with MSAs and other entry-level positions at 
a local level. To do this the VA is currently implementing an expedited 
hiring process for MSAs as part of the MyVA transformation. EANGUS 
fully supports this initiative, but recommends that the VA have 
statutory authority to directly hire entry-level employees to fill high 
turnover positions.

    Recommendation 3: Develop a process for appealing clinical 
decisions that provides veterans protections at least comparable to 
those afforded patients under other federally supported programs.

    We support the recommendation to reform and enhance the current 
appeals process afforded veterans in order to mitigate disagreements 
between veterans and their health care providers, and to ensure that 
veterans obtain excellent and necessary medical attention.
    Currently, veterans who disagree with their health care provider 
can appeal to that specific medical facility's chief medical officer. 
Veterans are only then able to appeal to their area's Veterans 
Integrated Service Network director (VISN), who rarely overturns a 
decision made by a medical center's chief medical officer. This 
decision by the VISN director is final unless veterans further appeal 
to the Board of Veterans Appeals. Given a time sensitive medical issue 
requiring immediate treatment, this is not an option, and veterans are 
left either untreated or subject to undesirable treatment plans.
    Veterans have had vastly different experiences appealing clinical 
decisions within multiple VISNs due to the lack of a national, system 
wide appeals process. EANGUS is in favor of a systematic and dependable 
appeals process, and we strongly agree with the commission's 
recommendation to implement an interdisciplinary panel to revise the 
VA's clinical appeals process. This panel must safeguard veterans' 
ability to provide justification or evidence to support their appeals, 
which many VISNs do not permit, and to have the ability to appeal 
clinical decisions above the VISN level.

    Recommendation 4: Adopt a continuous improvement methodology to 
support VHA transformation, and consolidate best practices and 
continuous improvement efforts under the Veterans Engineering Resource 
Center.

    EANGUS is in agreement that the improvement of employee experience 
is an improvement to the VA health care system as a whole. When VA 
employees take pride in their work, they actively look for ways to 
improve the efficiency and productivity of their positions. However, 
there are not yet adequate processes for employees to identify problems 
or provide solutions. We support this recommendation to empower VA 
employees to identify and disseminate best practices, and to reward 
innovative employees who work to improve the care provided to veterans.

Health Equity

    Recommendation 5: Eliminate health care disparity among veterans 
treated in the VHA Care System by committing adequate personnel and 
monetary resources to address the causes of the problem and ensuring 
the VHA Health Equity Action Plan is fully implemented.

    EANGUS fully supports this recommendation. Health care disparities 
based upon social or economic status must be eliminated from the VA 
health care system. We have heard of women veterans being confused with 
and treated as caregivers or spouses, or having their veteran status 
being questioned because of their gender. All veterans must be treated 
with the dignity and respect they have earned and deserve, regardless 
of such difference as race, background, or gender.
    We, therefore, strongly support implementing a cultural and 
military competence program throughout all VHA network providers and 
employees. It is crucial for veterans to receive informed care from 
health care providers who are aware their needs, and familiar with the 
health conditions associated with military service. This includes all 
VA health care providers as well as private providers within the 
integrated VHA network. The provision of cultural competence training 
will ensure that all veterans will receive care that is pertinent and 
tailored to their unique needs, and improve health care outcomes 
overall.

Facility and Capital Assets

    Recommendation 6: Develop and implement a robust strategy for 
meeting and managing VHA's facility and capital asset needs.

    We mostly agree with the Commission's recommendations regarding the 
management of capital infrastructure. In order to streamline the VA's 
ability to enter into necessary leases, and to lease unused property 
more efficiently, we support waiving congressional rules requiring 
budgetary offset, and to expand enhanced-use lease authority.
    We also are in agreement with the Commission that the ability to 
reevaluate the total cost of multiple, minor construction projects is 
necessary. But, we recommend the VA have the ability to umbrella 
multiple, minor construction projects under one contract, if these 
projects interdepend upon each other for completion. Furthermore, we 
suggest the implementation of differing classifications of major 
construction projects to ensure that the building of new medical 
centers does not conflict or enter into competition with facility 
expansions or seismic corrections.
    The Commission recommends a new board to analyze and recommend 
changes regarding the needs of current infrastructure to include the 
development of the VHA's integrated health care system. But we at 
EANGUS recognize that most of the functions of this recommended board 
are already being carried out by the Federal Real Property Council 
(FRPC) and the Strategic Capital Infrastructure Plan (SCIP). We do not 
believe that adding another stage of bureaucratic process will solve an 
already inefficient system. Instead, we urge congress to grant the VA 
the full authority to close facilities, or certain departments within 
facilities, as they see fit.
    We at EANGUS do not agree with the Commission's recommendation to 
realign the Defense Base and Realignment Commission (BRAC). Currently, 
the SCIP already deals with the issue of closing inefficient and 
dilapidated property, but as it has already been stated, they have been 
mostly ineffective and unable to prune the current infrastructure in 
order to promote efficient growth of the VHA network. Again, we urge 
Congress to grant the VA the authority to oversee and dismantle current 
VHA infrastructure as they see fit, as this is the most cost effective 
and timely way to dispose of out-of-date and inefficient facilities in 
order to make room for the continual improvement of VHA's 
infrastructure.
    Furthermore, we urge Congress to explore means to create more 
partnerships between the VA and the Department of Defense (DoD), in 
line with the example set by partnerships formed between the VA and DoD 
in Chicago. Their model of partnership has proven to increase budgetary 
savings, expand available scope of care, and increase the access of 
care for servicemembers and veterans.
    Finally, we encourage Congress to explore the model set by the 
National Guard in their continued pursuit to partner with local 
providers. The National Guard's model has improved the accessibility of 
care for servicemembers and veterans where DoD infrastructure is not 
yet in place, and such a model within the VA could continue to bridge 
the gaps in the VHA network to provide necessary health care for 
veterans until infrastructure can catch up to current needs.

Information Technology

    Recommendation 7: Modernize VA's IT systems and infrastructure to 
improve veterans' health and well-being and provide the foundation 
needed to transform VHA's clinical and business processes.

    We at EANGUS support the Commission's recommendation to appoint a 
chief information officer (CIO) that focuses on efficient and strategic 
health care information technology (IT) in order to better serve the 
needs of the VA health care system. This CIO for the Veterans' Health 
Administration must work closely with VHA staff to efficiently 
implement IT systems that meet the needs of its users, and report to 
the Veterans Affairs' Assistant Secretary for Information and 
Technology LaVerne Council to maintain interoperability with the IT 
programs of the Veterans Benefits Administration and National Cemetery 
Systems.
    We recommend that the VHA CIO have a multiyear budget that ensures 
health care programs are sufficiently supported and implemented.
    We do not have a position on whether the VA should purchase a 
commercial, off-the-shelf, electronic health care system (COTS), or 
themselves develop an in-house electronic health care system. But, we 
strongly urge that the new electronic health care system be 
interoperable with the Department of Defense's Electronic Health Record 
system (EHR), regardless if it is a COTS product, or developed in-
house. Investing in the interoperability of the VHA's and DoD's health 
record systems is the most cost effective and efficient solution. It 
will eliminate countless man-hour's squandered hunting down records for 
servicemembers and veterans, and it will ensure that no servicemember 
or veteran will ever be denied care because of inefficient and outdated 
bureaucratic recordkeeping.

Supply Chain

    Recommendation 8: Transform the management supply chain in VHA.

    EANGUS fully supports this recommendation that aims to reorganize 
and standardize the VA's supply chain. This will effectively leverage 
economies of scale, increase responsiveness and efficiency of the 
supply-chain, and reduce operating costs.
    This recommended transformation of the management supply chain must 
rely on local feedback and their buy-in to be successful. So, while 
each individual medical facility will no longer be able to dictate 
where their supplies are purchased, there must remain the option to 
request specific supplies and products in order to provide the best 
quality care. We see this as similar to the already-existing non-
formulary requests for prescriptions that are not on the VA's 
formulary. Lastly, this recommended transformation must evaluate 
whether specified requests are preferred or clinically needed by 
veterans, such as prosthetics.

Board of Directors

    Recommendation 9: Establish a board of directors to provide overall 
VHA Care System governance, set long-term strategy, and direct and 
oversee the transformation process.

    EANGUS does not support this recommendation to establish a separate 
board of directors. We do not see current problems to be due to lack of 
management, but rather a lack of leadership in Veterans Affairs itself. 
This recommended governing board would be constituted of political 
appointees who, despite being health care executives, would not use the 
VA health care system. We do not believe that a separate board of 
appointees, having no real vested interest to improve the care and 
services for veterans, will outperform or better guide the VHA Care 
System transformation than improved leadership within the VHA itself.
    Furthermore, we foresee that a governance board will not resolve 
the imbalance between capacity and demand that is pointed out in the 
Commission's report. It will instead introduce more bureaucracy, as 
this governing board would require yet another step for the approval of 
VHA budget requests, which currently still have to be approved by the 
Office of Management and Budget and appropriated by Congress. Rather 
than limiting how much care the VA is able to provide, we recommend a 
reformation of the congressional appropriations process. We, therefore, 
urge Congress to empower the VA so that it does not need to lean on 
outside accountability measures in order to effect the changes 
necessary for the system to prosper, but allow the VA to resolve 
internal issues themselves. This will ensure that the VA receives its 
required resources more efficiently so as to better serve the health 
care needs of veterans.

Leadership

    Recommendation 10: Require leadership at all levels of the 
organization to champion a focused, clear, benchmarked strategy to 
transform VHA culture and sustain staff engagement.

    EANGUS is in full support of this recommendation. As previously 
discussed in Recommendation 4 and Recommendation 5, the continuous 
improvement of employee experience will not only sustain the 
transformation of the VHA health care system, but also work to restore 
and build up veterans' trust in their health care system.

    Recommendation 11: Rebuild a system for leadership succession based 
on a benchmarked health care competency model that is consistently 
applied to recruitment, development, and advancement within the 
leadership pipeline.

    EANGUS strongly supports this recommendation. We believe in the 
importance of a systematic plan of mentorship, advancement, and 
succession, and we recognize the need for nationally structured 
programs that will recruit, develop, retain, and advance high 
performing leaders. Strong leadership development programs will empower 
VA employees to fill vacant leadership positions in the future, 
effectively building a nationwide leadership team of seasoned and 
invested employees to run VHA medical facilities.

    Recommendation 12: Transform organizational structures and 
management processes to ensure adherence to national VHA standards, 
while also promoting decision making at the lowest level of the 
organization, eliminating waste and redundancy, promoting innovation, 
and fostering the spread of best practices.

    EANGUS is in support of this recommendation. We agree with the 
Commission that rapid growth within the VA central office and VISN 
network has weakened authority, blurred respective roles, and confused 
the boundaries of responsibility of each branch, impairing the VA's 
ability to meet veterans' health care needs. The implementation of 
clear boundaries and responsibilities to separate and focus the VA and 
VISN will empower all available resources within both organizations to 
accomplish their distinct and necessary purposes for the sake of the 
VHA.

    Recommendation 13: Streamline and focus organizational performance 
measurement in VHA using core metrics that are identical to those used 
in the private sector, and establish a personnel performance management 
system for health care leaders in VHA that is distinct from performance 
measurement, is based on the leadership competency model, assesses 
leadership ability, and measures the achievement of important 
organizational strategies.

    EANGUS generally supports this recommendation. We agree that it is 
important to implement an objective performance management system that 
can evaluate results throughout the VHA Care System, and to hold VA 
leaders accountable to implement improvements.
    However, we do not believe the metrics of performance measurement 
must be identical to those used in the private sector. These metrics 
ought to borrow the best practices currently employed in the private 
sector, while also giving allowances for the singular mission of the 
VHA, and the differences between private and public health care 
systems.

Diversity and Cultural Competence

    Recommendation 14: Foster cultural and military competence among 
all VHA Care System leadership, providers, and staff to embrace 
diversity, promote cultural sensitivity, and improve veterans' health 
outcomes.
    EANGUS fully supports this recommendation. As stated in 
Recommendation 5, enhanced cultural and military competence training 
ensures the equity, improves the quality, and efficiently tailors the 
care that veterans' need. It is crucial for veterans to receive 
informed care from health care providers who are aware their needs, and 
familiar with the health conditions associated with military service. 
The better informed and prepared VHA network providers become, the more 
cost effective and efficient the provision of care becomes, thereby 
sustaining the VHA itself, and better serving the servicemembers and 
veterans in need.

Workforce

    Recommendation 15: Create a simple-to-administer alternative 
personnel system, in law and regulation, which governs all VHA 
employees, applies best practices from the private sector to human 
capital management, and supports pay and benefits that are competitive 
with the private sector.
    EANGUS does not support this recommendation of the Commission. 
Currently, there are already two separate agencies attempting to 
coordinate as a personnel system in order to recruit, hire, train, and 
manage a competent workforce for the VHA. As things stand, the current 
laws and regulations governing how government employees are hired, 
paid, and disciplined are not adequate for the sustenance of a high 
performing health care system. However, we do not see the solution 
coming in the form of yet another system. This will only lead to 
further confusion and more bureaucratic steps that muddle the actual 
execution of hiring, paying, and disciplining a competent workforce.
    EANGUS recommends, rather, a transformation of the current two-
party system, where both USAJobs and the VA clearly demarcate their 
target demographic and untangle from each other. We believe that if 
Congress grants the VA with more authority to navigate its own hiring 
practices, it will streamline the netting and implementation of a 
capable workforce for the VHA, and resolve the current problems within 
the VHA personnel system.

    Recommendation 16: Require VA and VHA executives to lead the 
transformation of HR, commit funds, and assign expert resources to 
achieve an effective human capital management system.

    EANGUS supports this recommendation. As discussed above, we fully 
support the empowerment and higher call of leadership within the VA to 
implement changes and safeguard this process of VHA transformation. We 
urge Congress to continue to empower the VA to manage its own employees 
and resources more fully, thereby streamlining the process of 
stabilizing an effective human capital management system, and removing 
the hurdles caused by external agencies that slow down the VA from 
accomplishing its unique goals.

Eligibility

    Recommendation 17: Proved a streamlined path to eligibility for 
health care for those with an Other-Than-Honorable discharge who have 
substantial honorable service.

    EANGUS supports this recommendation to provide eligibility to 
veterans with Other-Than-Honorable discharges, given that they are 
combat veterans, and their overall service is deemed to be honorable.

    Recommendation 18: Establish an expert body to develop 
recommendations for VA care eligibility and benefits design.

    EANGUS supports this recommendation. We have seen that past 
evaluations and changes to eligibility criteria resulted in increased 
access to care for previously uncared for populations of veterans, and 
eligibility was realigned to match with updated delivery models. 
Recognizing that the implementation of an integrated health care system 
will change the model of delivering care, and having seen the benefits 
of evaluating eligibility criteria, we support the idea of an expert 
body to evaluate potential access barriers and current eligibility 
criteria, and to make recommendations to the VA based upon their 
findings, in order to ensure that service-connected, homebound, and 
disabled veterans run into no barriers or delays that would keep them 
from service and care.

                                 
                IRAQ AND AFGHANISTAN VETERANS OF AMERICA
    Chairman Miller, Ranking Member Takano and Distinguished Members of 
the Committee:
    On behalf of Iraq and Afghanistan Veterans of America (IAVA) and 
our more than 425,000 members, thank you for the opportunity to share 
our views on the recently released Commission on Care Report. The 
Commission on Care was created by the Veterans Choice, Accountability 
and Access Law of 2014 and was charged with providing a framework for 
designing the Veterans Health Administration (VHA) for the next 20 
years. IAVA appreciates the opportunity to have the voices of this 
nation's newest veterans heard as we discuss the long term future of 
veteran health care.
    Overall the Commission on Care report has put forward thoughtful 
analyses and recommendations for reforming VHA. IAVA broadly agrees 
with many of the recommendations, but also has reservations with a few, 
which are outlined in detail in this testimony. Further, we have an 
overarching concern with the lack of consideration for how these 
recommended changes to VHA will impact the Department of Veterans 
Affairs (VA) as a whole, particularly VHA's ability to continue 
coordinating with the Veteran Benefits Administration (VBA) and 
National Cemetery Administration (NCA) as well as its ability to 
continue leading in health research and clinician training.
    Regardless of the specifics of each recommendation, one thing is 
certain: Reforming VHA into a truly 21st century health care system 
will require significant coordination between VA, the larger 
administration, Congress, VSO partners, and the veterans we all serve. 
This coordination must be done in a bipartisan, veteran-centric manner 
that understands transformative change requires resources. IAVA 
encourages Congress to listen to the needs of the VA and fund any 
necessary changes at adequate levels without cutting existing critical 
benefits, like the GI Bill.

General Analyses

    1. The report fails to consider how these recommendations to VHA 
will impact the VA as a whole, particularly VHA's ability to continue 
coordinating with the the VBA and NCA. One of the most unique aspects 
of the VA is its ability to offer wrap-around services to the veterans 
in its care. VHA is not only responsible for health care, but also 
oversees critical programs like suicide prevention and veteran 
homelessness. Over the years, the necessary coordination between VHA, 
VBA and NCA has continually improved. While not perfect, the cross-
coordination of the these administrations is critical in maintaining 
VA's ability to provide these wrap-around services and fully support 
the veteran. This report does not address this critical need for 
coordination and how coordination would be impacted if these 
recommendations to VHA were implemented, but it must.
    2. The report fails to analyze the impact of recommended VHA 
reforms on VHA's ability to conduct research and train future 
clinicians. Seventy percent of physicians receive some level of 
professional training from the VA. VA also trains over 20,000 nurses 
and nearly 35,000 people in other health related fields annually. This, 
combined with the robust research program that has led to 
groundbreaking discoveries in prosthetic development, spinal cord 
injuries, mental health injuries and burn care, expands VHA's impact in 
the community beyond any simple health care provider. These additional 
roles are critical aspects of the VHA footprint that were not accounted 
for in the development of the Commission on Care report. The impact of 
implementing these recommendations on these additional critical VHA 
roles must be taken into account.
    3. The report does not acknowledge the challenges faced by VA due 
to the misalignment of demand, resourcing and authorities. The 
Independent Assessment of VA conducted by the Mitre Corporation found 
that a misalignment between demand, resourcing and authorities is one 
of the critical challenges of the VA to execute effectively on its 
mission. This report does not address this challenge. As the writers of 
the Independent Budget point out, at its current state VA is 
underfunded and cannot meet demand. Budget approval rests with 
Congress; only they can properly align demand and resources. And such 
substantial reform efforts, while needed, will require proper and 
realistic resourcing. IAVA would again echo our concern of recent 
Congressional efforts to pay for new services and benefits at the VA by 
cutting existing benefits and make a strong recommendation that this 
method not be used to fund transformative change within VHA.
    4. The report is presented as a series of independent 
recommendations; it fails to acknowledge that the success of 
implementing a single recommendation likely depends on the execution of 
others and will also require extensive time and resources to execute 
effectively. The Commission on Care report puts forward a number of 
recommendations that will require time and resources to implement, and 
yet the challenges inherent to such a long-term, resource-intensive 
process are not addressed. Further, the report outlines a series of 
independent recommendations, but does a poor job of showing their 
interconnectedness. For example, an integrated network of care cannot 
be built without an updated technology platform and infrastructure to 
support the network. Yet these, and the costs associated with them, are 
not mentioned in the recommendation to create an integrated network of 
care. This lack of integration gives a false sense of overall cost of 
implementing this plan. It also fails to emphasize that in many cases, 
if one recommendation is adopted without others, the overall plan to 
improve VHA will fail. It is critical to recognize that while these 
recommendations are presented as stand-alones, many will be intertwined 
and one cannot be fully achieved without others.
    5. The report failed to take into account reforms and programs that 
the current VA Secretary has already planned and/or implemented. The 
Secretary conducted an extensive internal assessment of the VA when he 
was initially appointed to the position in 2014. As a result, he has 
put into action the myVA initiative, which addresses many of the points 
raised by the Commission on Care report. The report does not 
specifically address this initiative or take under consideration 
potential redundancies of the recommendations of the Commission report.
    6. The report recommendations are broad, contradictory at times, 
and can be left somewhat open to interpretation. This presents a 
challenge as leadership and the makeup of Congress changes. The broad 
and contradictory nature of the report does not provide clear and 
concise direction and the intent of the Commission in making these 
recommendations might be lost to political leanings.

Analyses of Report Recommendations

    Recommendation #1: Across the United States, with local input and 
knowledge, VHA should establish high-performing, integrated community-
based health care networks, to be known as VHA Care Systems, from which 
veterans will access high-quality health services.

    IAVA Analysis: IAVA recognizes that the VA cannot fulfill its 
mission alone and a fully integrated network of care that includes 
community providers will be essential to achieving this mission. We 
also agree with the need for an integrated model that requires patients 
to consult with a primary care provider to receive specialty care 
services and removes the arbitrary eligibility criteria enacted by the 
Choice Program. However, we disagree with primary care services being 
available outside of the VA, even if it is limited to within the 
community network. While well-intentioned, IAVA is concerned that a 
broad interpretation of this recommendation creates a framework whereby 
VHA as an institution can slowly be phased out. Furthermore, IAVA is 
not convinced the primary care providers outside the VA could 
effectively treat the whole veteran and effectively help veterans 
navigate the VA. A veteran's primary care provider needs to be the 
quarterback of their care; they've got to be central and fully 
integrated into the team.
    Additionally, the budget assessment for this recommendation makes a 
number of assumptions that may or may not hold true. First, the 
economic analysis does not include cost assessments for upgrading the 
IT platforms to support a truly integrated network, costs associated 
with the needs of the physical infrastructure of facilities nor 
additional administrative costs to support this new model.
    Although not specifically addressed, this recommendation also 
assumes that community providers will be available and able to absorb 
the demand created by integrating this network. The model estimates as 
much as 60 percent of VA care shifting to the community network (from 
34 percent currently). This will likely create a large demand on a 
community medical system already struggling to meet the demand of 
existing civilian patients (a challenge already realized by VA Choice 
providers). Finally the implementation of such a system does not take 
into account the impact on research and training, and could have a 
severe negative economic impact if not mitigated.
    Overall, IAVA supports an integrated network of care that includes 
community providers, with integration of VA primary care providers 
managing the patient care and an overall resource estimate that 
considers additional costs needed for administrative support, IT 
systems and infrastructure required to support the network. We find 
this recommendation well intentioned, but too broad, lacking critical 
pieces of analysis, and with a fatal flaw: the external primary care 
provider.

    Recommendation #2: Enhance clinical operations through more 
effective use of providers and other health professionals, improved 
data collection and management.

    IAVA Analysis: There is a growing shortage of physicians and the 
health care community will need to be open to expanding 
responsibilities for all health professionals. IAVA agrees with the 
need for VHA to more effectively engage its professional staff and 
ensure that clinicians have the support staff, both clerical and 
clinical, they need to use their time more efficiently and effectively 
to treat patients. We also agree that data integrity and collection 
must be a priority.

    Recommendation #3: Develop a process for appealing clinical 
decisions that provides the veterans protections at least comparable to 
those afforded under other federally-supported programs.

    IAVA Analysis: IAVA has no strong opinion on this recommendation. 
IAVA does support the intent to convene an interdisciplinary panel to 
further assess and offer recommendations regarding revising the 
clinical appeals process to ensure the veteran is receiving a judicious 
and uniform process when appealing a clinical decision.

    Recommendation #4: Adopt a continuous improvement methodology to 
support VHA transformation, and consolidate best practices and 
continuous improvement efforts under the Veterans Engineering Resource 
Center.

    IAVA Analysis: IAVA has continually recognized that one of the 
challenges at VHA is sharing best practices across the VHA system of 
care. Under the leadership of Secretary McDonald and the Undersecretary 
for Health, Dr. Shulkin, VHA continues to try and identify innovative 
solutions at the local level and bring these to the greater VHA 
community. However, streamlining these practices has been a challenge. 
We concur with the intent of this recommendation, VHA must establish an 
effective way to identify these transformative programs and share them 
across the VA in a streamlined and efficient way. However, we are not 
confident that the Veterans Engineering Resource Center is the 
appropriate entity to meet this intent.

    Recommendation #5: Eliminate health care disparities among veterans 
treated in the VHA Care System by committing adequate personnel and 
monetary resources to address the cause of the problem and ensuring VHA 
Health Equity Action Plan is fully implemented.

    IAVA Analysis: IAVA agrees that VHA should adopt as a primary 
mission the elimination of health care disparities among the veterans 
it serves. As the report states, minority populations are growing in 
the U.S. as a whole, and also within the veteran community. For VA to 
fully recognize its mission to serve veterans, it must be focused on 
serving all veterans.
    IAVA has recently focused on improving services to women veterans. 
Women veterans are a minority group, but they are not homogeneous. 
Women veterans are a very diverse population. We agree with the 
report's findings that the VA prioritize and fully resource serving 
minority populations. Additionally, we agree that while VA has improved 
its focus on understanding these populations through research, more 
must be done. There is an overall lack of data on vulnerable 
populations and a lack of data on how VA is doing to support these 
populations. This data gap must be closed. In doing so, VA will have 
the tools to finally address the needs of these populations in a data-
informed way.

    Recommendation #6: Develop and implement a robust strategy for 
meeting and managing VHA's facility and capital-asset needs.

    IAVA Analysis: As the Commission on Care report recognizes, the VHA 
infrastructure is in dire need of attention. The average facility is 50 
years old, resources for updates are nowhere near adequate and the 
ability for VA to conduct needs assessments of its facilities and act 
on those assessments are hindered by Congressional oversight. IAVA 
agrees that the VA must have more flexibility to meet its facility 
needs. We also recognize the growing importance of ambulatory care 
needs, while balancing the availability of inpatient facilities
    Additionally, we feel it is imperative to recognize the current 
challenges for VA to enter into agreements with health care partners to 
share space, equipment or personnel. Current law makes it nearly 
impossible for these private-public partnerships to be entered into, 
and in order for VA to implement recommendation one of this report, an 
integrated network of care, this capability is essential.
    IAVA also agrees that there could be resources gained by empowering 
VA to make these critical facilities decisions. There are a number of 
legislative changes that can be made to address the critical 
infrastructure needs of the VA. It will be imperative that Congress 
work with the VA to make these needed changes a reality.

    Recommendation #7: Modernize VA's IT systems and infrastructure to 
improve veterans' health and well-being and provide the foundation 
needed to transform VHA's clinical and business practices.

    IAVA Analysis: IAVA recognizes the VA IT system will be a critical 
component of an integrated system of VA care. Currently, the IT system 
is woefully outdated and does not afford the possibility of this 
integrated system. The current care in the community programs and 
providers do not interface with VA in a streamlined manner, making care 
disjointed. Further, the report points out that a lack of standard 
clinical documentation and a standardized electronic health records 
(EHR) across all facilities makes record sharing across facilities and 
from facility to veteran very difficult. IAVA agrees with these 
findings. In order for VHA to provide a streamlined, high quality and 
timely level of care, the IT system must be brought into the 21st 
century. VHA must have a detailed strategy and roadmap to achieve this 
level of IT and it will require the support of Congress to fulfill its 
vision.
    IAVA has advocated not only for an update to the VHA IT system, but 
also the development of an interoperable EHR between Department of 
Defense (DoD) and VA and within VA. This is critical to providing 
patient service to the military/veteran population. It is is also 
required by law and past due. However, with an integrated network, the 
need for interoperability will go beyond the VA and DoD and include its 
community partners.
    We are concerned that the priorities of VHA's IT needs are getting 
lost in the Office of Information and Technology and agree VHA needs an 
IT advocate working to meet the IT needs of VHA. However, we believe 
this would also benefit VBA and NCA and they too should have IT 
advocates.
    Finally, we agree that the budget cycle as it stands now makes it 
very difficult for VHA to plan for and execute on IT needs, and concur 
that VHA's IT budget needs should also be on a two year cycle with 
VHA's advance appropriations cycle.

    Recommendation #8: Transform the management of the supply change in 
VHA.

    IAVA Analysis: This is beyond the scope of IAVA's expertise and 
therefore we take no position. However, we support any mechanisms that 
could improve efficiencies and allow for resources to be reallocated 
elsewhere in VHA with these improved efficiencies.

    Recommendation #9: Establish a board of directors to provide 
overall VHA Care System governance, set long-term strategy and direct 
and oversee the transformation process.

    IAVA Analysis: IAVA understands the reasoning behind this 
recommendation and agrees that continuity in leadership is critical to 
long term reform. However, it can be very difficult to impose private 
sector practices (Board of Directors) on a public sector entity (VHA) 
because of the nature of that public sector entity.
    In an attempt to increase accountability in VHA, establishing a 
board runs the risk of the opposite effect. Particularly with the 
establishment of the board through various political appointees, the 
board risks becoming another entity where inaction becomes the norm 
because of opposing viewpoints. Additionally, as described the board 
has no fiduciary control; Congress will continue to be the final 
oversight authority. IAVA is concerned that the addition of the board 
adds another layer to the already burdensome bureaucracy. A board of 
directors without fiduciary responsibility effectively becomes an 
advisory board, and VA already has one, and arguably multiple, of those 
established through the myVA Board and the VSO community.
    We understand the Commission's concerns over continuity of senior 
leadership roles such as the Undersecretary of Health and are willing 
to consider a longer term of appointment for the Undersecretary of 
Health, but believe that this requires further analysis on the impact 
on VBA and NCA. More generally, with a change in governance structure 
such as this recommendation, there must be considerations as to how 
this impacts the coordination between VHA, VBA and NCA.
    There is also further consideration to be made as to the role that 
VSOs, Congress and other informal advisors already play in this 
capacity.

    Recommendation #10: Require leaders at all levels of the 
organization to champion a focused, clear, benchmarked strategy to 
reform VHA culture and sustain staff engagement.

    IAVA Analysis: As the report recognizes, the cultural and 
organizational health of VHA must be positively transformed before the 
VHA can function at its greatest potential. IAVA strongly agrees that 
in order to build a healthy culture, VHA must instil greater 
collaboration, ownership, and accountability among its employees. We 
applaud the strong dedication found among VHA employees and continue to 
advocate for policies and opportunities that best strengthen and 
support the VA's workforce.
    We agree with the report's recommendations that stress a systems-
oriented, leadership-supported, and flexible approach to cultural 
transformation. However, IAVA is concerned that this cultural 
transformation must be conducted throughout all of the VA and not 
exclusively siloed within VHA. Given the strong inter-agency 
cooperation at the VA and the need for VA leadership at its highest 
levels to support these goals, implementing the changes suggested by 
the report must be done across the whole VA.
    Additionally, the concept of the transformation office has the 
potential to help drive and focus the suggested cultural changes. 
However, we would need to understand the specifics of how the 
transformation office would function, how it would disseminate policies 
and training, and how it would be able to support local and national 
change to understand if such an office would be a more effective model 
of change than the current system. Since the report also directs this 
new transformation office to report directly to the suggested governing 
board, we would echo here our concerns detailed under the analysis of 
recommendation nine.

    Recommendation #11: Rebuild a system for leadership succession 
based on a benchmarked health care competency model that is 
consistently applied to recruitment, development, and advancement 
within the leadership pipeline.

    IAVA Analysis: IAVA overall agrees that VHA does not have a strong 
plan in place for leadership development and growth and this is 
critical for the continued success of VHA. Under Secretary McDonald, 
the need for leadership development has been recognized and is one of 
many areas where IAVA is excited to see progress already being made.

    Recommendation #12: Transform organizational structures and 
management processes to ensure adherence to national VHA standards, 
while also promoting decision making at the lowest level of the 
organization, eliminating waste and redundancy, promoting innovation, 
and fostering the spread of best practices.

    IAVA Analysis: IAVA supports streamlining VHA and empowering staff 
to make decisions, but in empowering the staff VA must ensure they have 
the right tools and metrics to make informed decisions. IAVA supports 
reducing redundancies and simplifying organizational structure, but 
also want to ensure that in simplifying vital processes are not lost.
    We have also supported the VA Secretary's request for more 
budgetary authority to make these critical decisions and route 
resources to where the need rests. We understand the need for a health 
care system to have that additional flexibility, but that must be 
carefully balanced with ensuring vital programs continue to be funded.

    Recommendation #13: Streamline and focus organizational performance 
measurement in VHA using core metrics that are identical to those used 
in the private sector, and establish a personnel performance management 
system for health care leaders in VHA that is distinct from performance 
measurement, is based on the leadership competency model, assesses 
leadership ability, and measures the achievement of important 
organizational strategies.

    IAVA Analysis: IAVA broadly agrees with the need for VHA to 
streamline and focus its organizational performance measures and 
establish the same in a personnel performance measure system. These 
metrics must be clearly defined, measurable, and speak more to the need 
for meaningful measures tied to safety, quality, patient experience, 
operational efficiency, finance and human resources (as indicated in 
the Independent Assessments). We also see value to tying these metrics 
to private sector measures given recommendation one to create and 
integrate the network of care, but hesitate to rely too much on the 
private sector measures given that VHA also has its own unique aspects 
that might warrant some measures outside of the private sector. 
Additionally, this is another area being addressed by the VA 
Secretary's myVA transformation plan.

    Recommendation #14: Foster cultural and military competence among 
all VHA Care System leadership, providers and staff to embrace 
Diversity, promote cultural sensitivity and improve veteran health 
outcomes.

    IAVA Analysis: IAVA completely agrees that military cultural 
competence is critical for all who provide care to veterans. A recent 
RAND report that looked at military cultural competence among community 
mental health providers defined this not just as knowledge and comfort 
with the military culture, but also knowledge of evidence-based 
practices to treat mental health injuries and ability to practice these 
techniques. It's critical to recognize that competence applies at all 
levels, from the individual greeting as the veteran walks in the door, 
to the provider treating the patient. All VA staff must be trained in 
this. Additionally, providers and their support staff must understand 
the specific health indicators for this population to better serve 
them. IAVA supports all of the recommendations in this section specific 
to asking about military health history and awareness of all veteran 
groups, including providing quality care for women veterans and the 
LGBT community. This will be a critical requirement for any community 
providers that are adopted into the VHA network, whether it be the 
current care in the community programs, or some future iteration.

    Recommendation #15: Create a simple to administer alternative 
personnel system, in law and regulation, which governs all VHA 
employees, applies best practices from the private sector to human 
capital management and supports pay and benefits that are competitive 
with the private sector.

    IAVA Analysis: IAVA is an active advocate for a dedicated focus on 
VA staffing. Specifically at VHA, we agree that attracting talent to 
VHA will be critical at all levels of the staffing hierarchy, and so 
competitive salaries and hiring incentives will be critical in doing 
this, as well as expediting the hiring process. We also recognize the 
tradeoff of moving from a Title 5 to a Title 38 hiring structure, 
including potential impacts on the diversity of the hiring pool. We 
recommend that should this recommendation be considered, this concern 
be addressed and then monitored if the recommendation is implemented. 
Given that VA serves a unique and diverse population, we want to be 
sure that the staff that serves this population maintains that same 
diversity.
    We also agree that VA HR should take a more proactive approach in 
developing leaders within VHA. We encourage VA to consider how VA HR 
can balance the needs to meet regulatory requirements, but more 
importantly emphasize professional development and fostering leaders 
among the VA ranks, as well as improving morale and hopefully as a 
result, retention.
    Any discussion on improving VA personnel systems must also include 
a discussion on increasing accountability at the VA. While a vast 
majority of VA employees serve veterans in an exemplary way, there are 
also those who discredit the VA through underperforming or plain 
negligent acts. Being able to jettison these employees in an expedited 
manner while also protecting whistleblowers and rewarding those that do 
serve in an exemplary way are the keys to restoring VA morale.

    Recommendation #16: Require VA and VHA executives to lead the 
transformation of HR, commit funds and assign expert resources to 
achieve an effective human capital management system.

    IAVA Analysis: In order to achieve recommendation 15, 
recommendation 16 must also be a priority. To reform the personnel 
hiring and HR administrative systems, leadership must be in support and 
must prioritize it.

    Recommendation #17: Provide a streamlined path to eligibility for 
health care for those with an other-than-honorable discharge who have 
substantial honorable service.

    IAVA Analysis: IAVA agrees with this recommendation. Those with 
Other-Than-Honorable (OTH) discharges can be among the most vulnerable 
in our veteran population. They are at a higher risk for suicide and 
homelessness, and often as a result of their discharge status may have 
no VA resources available to them. Community programs often mirror the 
eligibility criteria of the VA, and so even these resources may not be 
available to them. They become stuck in limbo, possibly needing help 
for an injury sustained while in service, but not able to obtain that 
help because they are not eligible due to their discharge status. For 
some, the injury obtained during service might have even contributed to 
the OTH discharge received.
    Awarding temporary eligibility to these individuals will allow for 
access to critical services without delay in health care due to the 
current process for determining eligibility. However, it's important to 
stress that with this change will be a resource burden on the VA that 
will require Congress to support. With increased demand comes increased 
need for resources.

    Recommendation #18: Establish an expert body to develop 
recommendations for VA care eligibility and benefit design.

    IAVA Analysis: This remains a critical issue within the veteran 
community and updates to VA eligibility have not been addressed in 20 
years. It is past time to do so. IAVA agrees with the recommendations 
to form a body to review these criteria and develop recommendations to 
meet the needs of all veterans.
    Again, IAVA appreciates the opportunity to outline our review of 
the Commission on Care. Change is necessary, and working together we 
know the VA and the health care it provides can be strengthened to 
provide the highest quality care for veterans in this nation's history. 
IAVA looks forward to continuing to work alongside this Committee, 
Secretary McDonald and our fellow VSO partners to evaluate and 
implement changes necessary to best achieve this goal.

                                 
                MILITARY OFFICERS ASSOCIATION OF AMERICA
    CHAIRMAN MILLER, RANKING MEMBER TAKANO, and Members of the 
Committee, the Military Officers Association of America (MOAA) is 
pleased to present its views on the Department of Veterans Affairs (VA) 
Commission on Care Report under consideration by the Committee today, 
September 7, 2016.
    MOAA does not receive any grants or contracts from the federal 
government.
                           EXECUTIVE SUMMARY
    On behalf of our 390,000 members, MOAA appreciates the Congress' 
vision in establishing an independent commission to look at how best to 
organize and deliver health care in the VA Health Administration (VHA) 
in the 21st Century.
    After reports of secret waiting lists at the VA medical center in 
Phoenix, Arizona, MOAA urged President Obama to establish an 
independent commission in order to make immediate and long-range 
systemic changes necessary to provide the best quality care and support 
services to our Nation's servicemembers, veterans and their families.
    After 10 months of intense deliberations, public meetings, 
testimony, and extensive inputs from experts across the country, 
including MOAA, the federally-directed Commission on Care issued its 
final report on June 30, 2016.
    MOAA was particularly grateful for the open and collaborative 
process commissioners established in order to receive information, 
feedback and viewpoints from veterans themselves, as well as from 
veteran and military service organizations representing this 
constituency.
    Overall, MOAA supports most of the Commission's findings, and we 
are pleased to see many of the report recommendations incorporate the 
changes Secretary McDonald and veterans service organizations (VSOs) 
have been advocating for since the implementation of the Veterans 
Access, Choice and Accountability Act of 2014 (Choice Act).
    While much more remains to be done, we appreciate the Commission's 
sincere effort to strike a balance of sustaining and improving VA 
health care delivery while enhancing civilian care opportunities.
    Along with our VSO partners, we look forward to working with the 
President, Congress and the VA to translate the Commission's 
recommendations into effective action.
    The following section provides MOAA's views and concerns on 
selective issues and recommendations for your consideration.
         COMMISSION ON CARE REPORT ANALYSIS AND RECOMMENDATIONS
    MOAA believes Chairperson Nancy Schlichting's statement on the 
final report released on July 5, 2016, is an excellent characterization 
of the current system and provides a compelling reason for why 
immediate reform is needed.
    ``The system problems in staffing, information technology, 
procurement and other core functions threaten the long term viability 
of VA health care system and that key VA systems do not adequately 
support the needs of 21st century health care,'' stated Schlichting, 
CEO of the Henry Ford Health System. ``The Commission found that no 
single factor can explain the multiple systemic problems that have 
frustrated VA efforts to provide veterans consistent timely access to 
care. Governance challenges, failures of leadership, and statutory and 
funding constraints all have played a role. As the Final Report states, 
however, 'VHA has begun to make some of the most urgently needed 
changes outlined in the Independent Assessment Report (Independent 
Assessment of the Health Care Delivery Systems and Management Processes 
of the Department of Veterans Affairs Report, published January 1, 
2015), and we support this important work.''
    MOAA supports the following key elements of the report 
recommendations:

    Redesigning the Veterans' Health Care Delivery System

      Establish high-performing, integrated community-based 
health care networks to be called ``VHA Care System (VCS)'' to include 
VA facilities and Department of Defense (DoD) and other federally-
funded providers and facilities.
      VCS networks retain existing special-emphasis resources 
and specialty care expertise (e.g., spinal cord injury, blind 
rehabilitation, mental health, prosthetics, etc.).
      Community providers must be credentialed by VHA to 
qualify to participate in community networks, ensuring providers have 
the appropriate education, training, and experience.
      Highest priority access to health care would be provided 
to service-connected and low-income veterans.
      Eliminate the current time and distance criteria for 
community care access (30 days/40 miles).
      VCS should provide overall health care coordination care 
and provide navigation support for veterans.
      Veterans would choose a primary care/specialty care 
provider in VCS-specialty care requires referral from the primary care 
provider.
      VHA should increase efficiency and effectiveness of 
providers and other health professionals by improved data collection 
and management, adopting policies to allow them to make full use of 
their skills.
      Eliminate health disparities by establishing health care 
equity as a strategic priority.
      Modernize VA's information technology (IT) systems and 
infrastructure.

    While VA alone cannot meet all the health care needs of veterans, 
the system does provide for a foundational platform upon which to 
build. The Commission acknowledges the importance of this foundation up 
front in the report:

    "VHA has many excellent clinical programs, as well as research and 
educational programs, that provide a firm foundation on which to build. 
As the transformation process takes place, VHA must ensure that the 
current quality of care is not compromised, and that all care is on a 
trajectory of improvement."

    MOAA believes the new health care system delivery model needs to 
preserve well-known programs and competencies in VHA's mission areas of 
clinical, education, research, and national emergency response-all 
critically important elements and capabilities integrally linked to the 
broader VA mission as well as the American medical system.
    The report does note however, that while care delivered in VHA in 
many ways is comparable or better in clinical quality to that generally 
available in the private sector, it is inconsistent from facility to 
facility because of operational systems and processes, access, and 
service delivery problems.
    Specialty programs and resources are unique and distinctive 
capabilities which set VHA apart from the private sector in its ability 
to deliver critical and specialized medical services. This is 
particularly true in the areas of behavior health care programs, 
integrated behavioral health and primary care through its patient-
aligned care teams, specialized rehabilitation services, spinal cord 
centers, and services for homeless veterans-core competencies and 
capabilities which should be expanded, enhanced, and shared across 
government and private sector health systems.
    These unique medical capabilities, combined with other government 
(DoD and other federal health systems) and private sector partners to 
create high-performing networks of care, would allow VHA to more 
effectively assimilate its system of care through integrated community-
based health care networks of the VCS. Such change would result not 
only in greater system optimization, but also better serve our 
veterans.
    MOAA is pleased the Commission recognized VA's primary overall role 
in coordinating health care and helping veterans navigate the system 
whether care is delivered in VA medical facilities or through community 
providers. Though the new system would allow veterans the option to 
choose a primary care provider (PCP) from all credentialed PCPs across 
the system, and all PCPs would be responsible for coordinating veterans 
care, MOAA believes VA must retain ultimate responsibility for 
veterans' health care and managing health information and patient 
outcomes to ensure quality and continuity of care and services.
    Like many VSOs, we support the elimination of the current time and 
distance criteria for community care access (30 days and 40 miles). 
Implementation of the Choice Act using the current restrictive and 
arbitrary eligibility criteria has created problems that require a 
fresh look at what the standards should be in the new VA health system.
    MOAA is also supportive of refocusing health care benefits to allow 
service-connected, disabled and low income veterans' higher priority. 
Additionally, VHA must eliminate existing health disparities by making 
health care equity a strategic priority. The report outlined a number 
of racial and ethnic health inequities in the system. More must be done 
to institutionalize cultural and military competency and eliminate 
system disparities as we move forward in the transformation.
    Similarly, MOAA agrees with the Commission's approach to allowing 
health care providers and professionals such as advanced practice 
registered nurses to work to their full licensure potential. This is 
already being done in many states and government health agencies, 
including the Defense Department, and offers a positive solution for 
addressing VHA's suboptimal productivity levels. MOAA has strongly 
advocated for such change as a means to help expand current system 
capacity and capability.
    Further, the report highlighted the need for VA to invest in 
transforming its antiquated, disconnected IT systems and infrastructure 
to improve veterans' health and well-being. MOAA agrees such an 
investment in a comprehensive electronic health care information 
platform is foundational to VA's ability to establish, operate and 
sustain a health system equal to or better than what is found in the 
private sector.
    This platform must be interoperable with other systems within the 
network, enabling scheduling, billing, claims, and payment. It should 
be easy for veterans to access their own information so they can better 
manage their health. Years of underfunding VA IT and financial 
management clinical, administrative, and business systems has prevented 
VA from evolving and innovating to remain relevant and agile as private 
sector medicine and patient health needs change over time.

Governance, Leadership, and Workforce

    MOAA agrees with Commission recommendations to:

      Develop and implement a strategy for cultural 
transformation.
      Reform and modernize VA's leadership and human capital 
management systems to recruit, train, retain, and sustain high quality 
health care professionals and executive-level leaders.
      Create a simple-to-administer alternative personnel 
system.
      Transform the organizational structure of VHA and 
reengineer business processes.

    Cultural transformation across the VA enterprise is imperative and 
it starts at the top with effective leadership. VA's last major 
transformation occurred in the mid-1990's. Former Under Secretary of 
Veterans Health, Dr. Kenneth Kizer told commissioners, ``Today's VHA is 
intensely, unnecessary complex, and lacks a clear strategic direction, 
and is hampered by overly top-down management at VA's Central Office 
(VACO), where the staff size more than doubled in a five year period 
between fiscal years 2009 to 2014 as a result of centralizing a portion 
of field operations functions to VACO.''
    Of all government agencies, VHA has one of the lowest scores in 
terms of the organizational health and has repeatedly appeared on the 
Government Accountability Office's (GAO) high-risk list. GAO has 
documented well over 100 outstanding systemic weaknesses covering a 
wide-range of management and oversight problems in the VA health care 
system, including insufficient oversight of employees and leadership.
    While the VA has a reputation for having a highly dedicated staff 
focused on serving veterans, VHA is often perceived by employees as 
being very bureaucratic, driven by politics and crisis, and having a 
risk-adverse culture, with little connection to leadership. These 
findings from the Independent Assessment are persistent and prevalent 
across the system even though VA has undertaken a number of initiatives 
in recent years to address the culture of the environment.
    MOAA agrees with the Commission's recommendation to create an 
integrated and sustainable culture of transformation where all programs 
and activities are aligned, and leaders at all levels of the 
organization are responsible and accountable for improving 
organizational health and staff engagement.
    Such transformation must also include reforming and modernizing 
VA's leadership and human capital management systems across the 
enterprise. Currently VHA lacks a comprehensive system for leadership 
and employee development and urgently requires a workforce management 
and succession planning strategy for attracting, training, retaining, 
and sustaining high quality health care personnel and executive-level 
leaders.
    MOAA urges the Committee to support improvements to the 
Department's leadership and human capital management systems by 
providing the necessary funding and authorities needed to implement the 
report recommendations. The VA needs the financial incentives and 
hiring authorities to attract outside leaders and experts who want to 
serve in VHA, to include temporary and/or direct hiring of health care 
management graduates, senior government and private sector health 
system leaders and experts to stabilize the current workforce and to 
remain competitive in the health care market.
    Additionally, VHA must embrace a systems approach to transforming 
its organizational structure and reengineer business processes to align 
with the VHA mission, eliminate unclear, duplicative functions, and 
clarify roles and responsibilities at VACO on down to field offices and 
medical facilities. VHA needs a more simplified organizational 
structure, performance measurements, and processes for business 
operations-the current operating system is unnecessarily complex, 
confusing and cumbersome.
    The Commission proposes one model for streamlining VHA structure to 
reflect the structure used in large private-sector hospital systems. 
MOAA believes this should be a priority to eliminate duplication, 
consolidate program offices, and create a flatter and more sustainable 
structure.
    Eligibility. MOAA agrees with the Commission proposal to establish 
an expert body to develop recommendations for VA care eligibility and 
benefit design.
    The criteria for determining health care eligibility has not 
changed in 20 years even though VA's health system has seen tremendous 
change during this time. Current criteria are outdated and confusing to 
veterans and VHA staff and are inconsistently administered across the 
system.
    The report also spotlighted ``that nothing in law or regulation 
assures service-connected, disabled veterans of priority of care.'' The 
new system must assure priority to these as well as other vulnerable 
segments of the veteran population.

Major Areas of Concern

    MOAA has some concern about Commission proposals to:

      Establish a Governing Board of Directors to provide 
overall VCS governance, set long-term strategy, and direct and oversee 
the transformation process.
      Provide a streamlined path to eligibility for health care 
for those with Other-Than- Honorable (OTH) Discharge who have 
substantial honorable service.

    The Commission recommends an 11-member board which would be 
accountable to the President, having decision-making authority to 
establish long-term strategy and implement and oversee the 
transformation of the new health system.
    The Board of Directors would also provide recommendations to the 
President for appointment of a Chief of VHA Care System (CVCS) for a 
five-year term (could be reappointed for a second term). The CVCS would 
report to the Board and function as a chief executive officer of VHA. 
The idea is to provide longer-term continuity in VHA operations and 
prevent disruption in leadership that often comes with political 
transitions.
    As with many of our VSO partners, MOAA supports the concept of a 
longer-term appointment for the Under Secretary of Health to ensure 
continuity when changes in leadership occur in the Executive and 
Legislative Branches, but would not be supportive of establishing a 
Board of Directors. MOAA believes Congress' role of oversight is 
essential in holding VA accountable in caring for veterans, and 
Congress must continue to be veterans' strongest advocate. Establishing 
a Board of Directors would usurp Congress' role, add an additional 
level of bureaucracy, and in our view, likely slow progress and hinder 
transformation.
    Finally, the Commission recommends VA revise its regulations to 
provide tentative health care eligibility to former servicemembers with 
an OTH discharge who are likely to be deemed eligible because of their 
substantial favorable service or extenuating circumstances (e.g., 
traumatic brain injury or post-traumatic stress that likely contributed 
to their OTH discharge).
    MOAA understands the Commission's concern about VA's strict 
interpretation of what is truly dishonorable service and agrees the 
ambiguous and subjective application of regulations resulted in 
disparities in adjudicating veterans' cases. MOAA has supported 
establishment of boards to review and upgrade discharges in such cases 
where appropriate. VA estimates there are over 700,000 OTH cases, and 
it would cost upwards of $846 million to implement the Commission's 
recommendation, but acknowledges the true size of the population and 
costs are unknown.
    VA also acknowledges the need to streamline the Veterans Benefits 
Administration's characterization of discharge adjudication process 
when veterans apply for benefits. The current process is not 
standardized and is taking far too long for decision-making, preventing 
veterans from getting the care they need sooner rather than later. 
While VHA has established partnerships with community organizations to 
help link non-eligible veterans to care outside the system, more needs 
to be done to address these disparities. MOAA recommends Congress 
direct VA to provide more information on the current scope of the 
problem, potential costs and the impact on VHA of such changes before 
implementing the Commission's recommendation.
                               CONCLUSION
    MOAA appreciates Chairman Miller's response to the report in a July 
6, 2016, Washington Post article by stating, ``The report makes it 
abundantly clear that the problems plaguing the VA medical care are 
severe. Fixing them will require dramatic changes in how VA does 
business, to include expanding partnerships and community providers in 
order to give veterans more health care choices.''
    MOAA is confident that collectively we can achieve dramatic 
transformation in VHA which will serve our Nation, veterans and their 
families for decades to come. While it will take a significant 
commitment and investment by government and non-government communities, 
we believe reform is possible and achievable. Our veterans and their 
families deserve no less.
    MOAA thanks the Committee for considering the important findings 
and recommendations in the report. Our organization looks forward to 
working with the Congress, the VA and the Administration to reform and 
modernize the VHA system of care.

                                 
                                  NOVA
    September 6, 2016

    The Honorable Jeff Miller
    Chairman
    House Committee on Veterans' Affairs
    345 Cannon House Office Building
    Washington, D.C. 20515

    Dear Chairman Miller:

    On behalf of the over 3,000 members of the Nurses Organization of 
Veterans Affairs (NOVA), we would like to offer our thoughts regarding 
the Commission on Care Final report being discussed before your 
Committee today.
    NOVA thanks the Commissioners for their hard work and believes many 
of the recommendations offered will improve the care we provide 
veterans every day at VA facilities around the country. Recommendations 
to include providing additional resources to modernize IT, increase HR 
and other support staff, strengthen capital assets and recruit and 
retain a high quality professional workforce, all have our support.
    The most glaring recommendation - and one that has received strong 
opposition from veterans' advocates and those in the community working 
to care for veterans - is a proposal that would create a VHA 
Independent Board which would govern the VA health care system.
    NOVA strongly opposes giving an outside board - made up of civilian 
health care executives who may have never set foot into a VA facility - 
the authority to make decisions about the care and services provided 
America's veterans. Creating another layer of bureaucracy, which would 
take VA's ability to manage care away from those who are held 
accountable by this very body seems ill-advised. Oversight for 
veterans' health care handed over to a newly created external board 
would all but dismantle the most effective and innovative features of 
the current VA system - the Primary Care/Mental Health Integrated 
approach. It also fails to take into account the many wrap around 
services that VA offers veterans, while ironically recognizing that VA 
provides better coordinated care than any of its private sector 
partners.
    NOVA agrees in order to reform VA so it can best serve our nation's 
veterans, we must expand access to services that it currently provides 
by hiring at VA facilities where demand exceeds available staffing, 
where geographic challenges exist, and specific services are not 
offered, allowing veterans the option of using purchased care available 
through its community providers.
    Community providers should be a crucial part of the integrated 
network of care, but VA must remain the first point of access and 
coordinator of all care. As nurses, managing workflow and coordinating 
care is key to providing the quality that serves as a model for VA's 
``whole health'' approach to care.
    NOVA asks that any discussion regarding the Commission's proposed 
recommendations to improve gaps in service be made in a thoughtful, 
transparent process and involve all stake holders. Preserving an 
integrated health care community designed to put veterans first must 
include VA. It is VA care that veterans overwhelming prefer and 
deserve.

    Sincerely,

    Sharon Johnson, MSN, RN, President
    Nurses Organization of Veterans Affairs

                                 
                     PARALYZED VETERANS OF AMERICA
    Chairman Miller, Ranking Member Takano, and members of the 
Committee, Paralyzed Veterans of America (PVA) would like to thank you 
for the opportunity to express our views on the Commission on Care's 
Final Report. We appreciate the Committee's continued commitment to 
thoroughly examining the best way forward for comprehensive reform in 
the delivery of veterans health care.
         Redesigning the Veterans' Health Care Delivery System
The VHA Care System

    Recommendation #1: Across the United States, with local input and 
knowledge, VHA should establish high-performing, integrated community-
based health care networks, to be known as the VHA Care System, from 
which veterans will access high-quality health care services.

    PVA supports the creation of fully integrated health care networks 
with the Department of Veterans Affairs (VA) maintaining responsibility 
for all care coordination. This part of the recommendation is 
consistent with the proposal that PVA along with our partners in The 
Independent Budget (IB)-DAV and VFW-put forward late last year. We also 
support eliminating the 30-day and 40-mile standards for access 
established as part of the Choice program. The IB offered a similar 
recommendation last year suggesting that access to care and when and 
where to seek service should be a clinically-based decision determined 
by the veteran and his or her provider, not an arbitrary access 
standard. Despite our support for the concept of creating fully 
integrated health care networks, we have some significant concerns with 
other aspects of the Commission's recommendation.
    We are first, and foremost, concerned with the Commission's 
recommendation for ``choice.'' The report proposes that veterans should 
have unrestricted choice for any primary care provider within their 
newly-constructed network. In order to access specialty care (outside 
of VA's specialized services), veterans would be required to get a 
referral from their designated primary care provider.
    The Commission does not, however, discuss what the boundaries 
should be in establishing the networks. The breadth of the networks is 
limited only by the Commission's assumption that the networks will be 
``tightly managed'' by VA and that primary care providers wishing to 
participate will meet certain quality standards. Together these two 
parameters do not establish a clear picture as to what extent VA may 
efficiently dilute its capacity to deliver care in favor of outsourcing 
to the private sector.
    These networks must be developed and structured in a way that 
preserves VA's capacity to deliver high-quality care while specifically 
preserving its core competencies and specialized services. Without a 
critical mass of patients, VA cannot sustain the very infrastructure 
that supports and makes VA specialized services world-class. Providing 
veterans unfettered choice as to their provider jeopardizes this 
baseline of patients. A better proposal is found in VA's Plan to 
Consolidate Community Care Programs, which rests on a principle of 
using community resources to supplement service gaps and better realign 
VA resources. This sets a natural boundary that would prevent the 
networks from expanding to a harmful and unmitigated degree. 
Ultimately, the Commission failed to articulate what constitutes a 
``tightly managed'' network, and it admittedly did not contemplate 
``[r]eductions in the volume of care within VA facilities, and 
potentially adverse effects [on] quality . . . .'' \1\ The result we 
are left with is lip service paid to preserving VA's specialized 
services.
---------------------------------------------------------------------------
    \1\  Commission on Care, Final Report, June 30, 2016, p. 32 
(hereafter "Report").
---------------------------------------------------------------------------
    In addition to VA specialized services, there is insufficient 
discussion regarding care coordination within these networks. The 
recommendation suggests that care coordination take place through all 
primary care providers, but VA would assume overall responsibility for 
care coordination of all enrolled veterans. There is no delineation, 
though, as to exactly where VA and community providers hold 
responsibility. The recommendation is conflicting and could ultimately 
lead to finger pointing instead of well-coordinated care for veterans 
being served in the community. We would again point to VA's Plan to 
Consolidate Community Care Programs. \2\ VA's proposal would administer 
care-coordination based on the intensity of coordination needed. This 
method offers the functionality and flexibility needed to ensure that 
patients with complex cases receive adequate attention and resources. 
It also tailors the level of care coordination to each individual 
patient's complexity and needs, regardless of whether the patient 
receives care in VA facilities or in the community.
---------------------------------------------------------------------------
    \2\ Department of Veterans Affairs, Plan to Consolidate Programs of 
Department of Veterans Affairs to Improve Access to Care, October 30, 
2015, pp. 21-25, http://www.va.gov/ opa/publications/ va--community--
care--report--11--03--2015.pdf.
---------------------------------------------------------------------------
    We are further concerned with the report's consideration of funding 
for the new health care delivery system. It does not clearly reconcile 
how VA currently determines its appropriations needs through the 
Enrollee Health Care Projection Model (EHCPM) with how it will have to 
determine its appropriations needs through the new system with local 
leadership input.
    The report also considers cost-sharing, particularly for veterans 
with non-service connected disabilities. The cost-sharing opportunity 
would be used to expand options for choice, but it would likely come 
with increased costs for Priority Group 4 (non-service connected 
catastrophically disabled) who do not currently have a cost for their 
care. This proposal is contemplated within the larger context of 
determining priority of service. The report recommends priority be 
given to service-connected disabled veterans and those with low 
incomes, but it does not properly consider the relationship of Priority 
Group 4 veterans to the system.
    Finally, as VA begins to involve community providers at a greater 
rate, it is essential to ensure that the process for adjudicating 
medical malpractice claims is the same whether that care was received 
in the community or within VA. In almost all cases, the current process 
under 38 U.S.C. Sec. 1151 treats malpractice claims the same regardless 
of where they received care. However, certain unique situations still 
present inequitable results for veterans.

Clinical Operations

    Recommendation #2: Enhance clinical operations through more 
effective use of providers and other health professionals, and improved 
data collection and management.

    PVA generally supports this recommendation as it would allow 
providers in the VA health care system to practice within the full 
scope of their licenses. The report also addresses bed capacity 
reporting as originally established by P.L. 106-117, the ``Veterans 
Millennium Health Care and Benefits Act.'' It appears to endorse a 
requirement for VA to report beds as closed, authorized, operating, 
staffed, and temporarily inactive.
    We reiterate our support for reinstating the capacity reporting 
requirement originally established by P.L. 104-262, the ``Veterans' 
Health Care Eligibility Reform Act of 1996.'' VA has not maintained its 
capacity to provide for the unique health care needs of severely 
disabled veterans. Reductions in both inpatient beds and staff in VA's 
acute and extended care settings have been continuously reported 
throughout the system of care, particularly since the capacity 
reporting requirement expired in 2008.

    Recommendation #3: Develop a process for appealing clinical 
decisions that provides veterans protections at least comparable to 
those afforded patients under other federally-funded programs.

    PVA supports this recommendation as it aligns VA with widely 
accepted medical practice. As it stands, each Veteran Integrated 
Service Network (VISN) has its own process for appealing clinical 
decisions. Failure to standardize the appeals process across VA 
naturally produces a disparity in outcomes among similarly situated 
veterans seeking to bring clinical disputes. Furthermore, external 
review of final VA decisions is subject to the discretion of the VISN 
director.
    One aspect of current VA policy that is not addressed in the 
Commission's report is the latent conflict of interest in the patient 
advocate office that each VA facility employs to manage and resolve 
complaints. While patient advocates generally serve as the liaison 
between patients and clinicians, their ability to fully advocate on 
behalf of the veteran is hampered by the fact that they are forced to 
present criticism to those who hold the keys to their career. The 
``program operates under the philosophy of Service Recovery, whereby 
complaints are identified, resolved, classified, and utilized to 
improve overall service to veterans.'' \3\ Capturing useful data by 
documenting complaints in order to facilitate positive changes at VA is 
productive, but the incentive to downplay patterns of conduct and other 
pervasive issues exists and limits potential progress. As a solution, 
PVA has suggested before that the patient advocates should be removed 
from their current personnel structure and report instead to the MyVA 
Veterans Experience Office in order to offer more robust, constructive 
criticism when patterns emerge among veteran complaints.
---------------------------------------------------------------------------
    \3\  VHA Patient Advocacy Program, VHA Handbook 1003.4 (2005).

    Recommendation #4: Adopt a continuous improvement methodology to 
support VHA transformation, and consolidate best practices and 
continuous improvement efforts under the Veterans Engineering Resource 
---------------------------------------------------------------------------
Center.

    PVA supports this recommendation. The principle of diffusing 
knowledge and best practices throughout VA is important and should be 
encouraged. As the report indicates, VA currently has resources, such 
as the Veterans Engineering Resource Center (VERC), that are 
underutilized. To truly capitalize on these available benefits, though, 
VA must thoroughly pursue personnel management reform. A large 
contributor to stagnant innovation and distribution of best practices 
is due to persistent, wide-spread vacancies in senior leadership 
positions. Acting directors or senior managers, as opposed to permanent 
leaders, have a limited ability to implement long-term changes because 
of the uncertainty of their tenure. Fixing the issues that pervade the 
personnel system will go hand-in-hand with success in adopting a 
continuous improvement methodology.

Health Care Equity

    Recommendation #5: Eliminate health care disparities among veterans 
treated in the VHA Care System by committing adequate personnel and 
monetary resources to address the causes of the problem and ensuring 
the VHA Health Equity Action Plan is fully implemented.

    PVA supports certain aspects of this recommendation, but we believe 
that this recommendation perpetuates a false narrative about VA health 
care prematurely and without a thorough understanding of the scope of 
the problem. Health care systems across the United States are 
acknowledging and seeking to address health care equity, inequality and 
disparities. VA has conducted its own studies and found that 
disparities do exist. Dealing with these disparities when and where 
they exist requires affirmative steps to combat the problem. It is 
essential, however, to thoroughly understand the root causes and true 
scope of the problem before implementing an effective plan.
    VA's unique history of providing care for historically underserved 
populations, particularly poor or near poor veterans with chronic 
medical conditions and behavioral health conditions, suggests that 
patterns within the private sector should not be arbitrarily 
appropriated to VA without thorough examination. Furthermore, because 
cost is often not a barrier to care within VA, a significant 
distinction between VA and private sector care must be made based on 
the absence of typical market influences affecting private sector 
outcomes.
    Before mandating that VA make ``implementation of the VHA Health 
Equity Action Plan (HEAP) nationwide'' \4\ a strategic priority in the 
face of all the other competing issues, more research and better 
information is needed to help inform VA's planning and allocation of 
resources. The 2015 Evidence Brief relied upon by the Commission's 
report specifically states that the sources of the disparities 
identified were not examined. \5\ The Evidence Brief concludes that 
more research, specifically related to the sources or causes of the 
disparities is needed before an accurate assessment of the issue can be 
made. \6\ To this end, we support the proposal to plus-up the staff 
dedicated to examining this issue within VA. It will not only encourage 
VA to determine how pervasive certain issues are and root out causes of 
the disparities that exist, but it will also permit VA to apply lessons 
learned from its own successes, such as its leadership on the issue of 
health care equity in the LGBT community acknowledged by the Commission 
in its discussion related to diversity and cultural competence. \7\
---------------------------------------------------------------------------
    \4\  Report, p. 54.
    \5\  Department of Veterans Affairs, Evidence Brief: Update on 
Prevalence of and Interventions to Reduce Racial and Ethnic Disparities 
within the VA, http://www.hsrd.research.va.gov/ publications/esp/ 
HealthDisparities.pdf, pp. 1, 3, 33.
    \6\  Id., p. 28, 31.
    \7\  Report, p. 137.

---------------------------------------------------------------------------
Facility and Capital Assets

    Recommendation #6: Develop and implement a robust strategy for 
meeting and managing VHA's facility and capital-asset needs.

    Position: PVA strongly supports this recommendation. VA's capital 
asset management has been substandard, to say the least, in recent 
years. We support, in accordance with the recommendations of The 
Independent Budget, the expansion of ambulatory or urgent care. We also 
believe that VA must make a concerted effort to right size its 
infrastructure, in light of the amount of unused and underutilized 
capacity in the system. However, we are not absolutely convinced that a 
BRAC-modeled concept is the most effective way for VA to realign its 
capital footprint. Finally, we fully support the recommendation the 
report offers to free the VA of the strict fiscal constraints that have 
hampered its ability to manage its capital leasing program.

Information Technology

    Recommendation #7: Modernize VA's IT systems and infrastructure to 
improve veterans' health and well-being and provide the foundation 
needed to transform VHA's clinical and business processes.

    PVA fully supports this proposed recommendation. We have repeatedly 
advocated for reform to VA's IT system management and enterprise 
through The Independent Budget (IB). The IB strongly opposed IT 
centralization in 2006 (a move forced by then Chairman of the House VA 
Committee, Steve Buyer). We believe many of the problems identified by 
the Commission originated with that centralization, and the report 
essentially affirms our belief. We believe that the Commission's 
recommendations could be taken even further to fully decentralize IT 
into VHA once again. This will provide more health care IT innovation, 
flexibility with the IT budget and better IT outcomes.
    However, we recognize that cost for these reforms remains a 
significant hurdle to advancement. Indeed, VA's Plan to Consolidate 
Community Care Programs similarly called for significant IT upgrades in 
order to be successful. The plan was presented to this Committee in 
late 2015 and was well-received on both sides of the aisle, but several 
members of Congress balked at the cost of paying for this necessary 
upgrade. Ultimately, we strongly believe that this is a cost that must 
be met for VA to have the opportunity to fully modernize its IT 
infrastructure. This is particularly true in light of the discussion 
regarding use of commercial off-the-shelf (COTS) IT products.
    PVA has no strong position on whether VA should choose a COTS 
solution for its IT systems or design its own systems. However, it 
would seem that leveraging COTS would make innovation and modernization 
more dynamic and possibly more cost efficient.

Supply Chain

    Recommendation #8: Transform the management of supply chain in VHA.

    The Commission accurately outlines the supply and contracting 
problems within VHA and VA. The corresponding recommendations are good 
business concepts if VA and VHA have the funding, ability and 
leadership to implement them. The recommendation to have VA and VHA re-
organize all procurement and logistics operations for VHA under the VHA 
Chief Supply Chain Officer (CSCO) is the correct organizational 
solution. However, in order to implement the recommendations, there 
must be multiple changes in other departments throughout VA and VHA. 
Absent these changes, implementation of these recommendations will 
cause disruption, confusion and uncertainty at the Central Office level 
and will be even worse at the field level.
    PVA has also identified some additional concerns with the 
recommendation. The attempt to standardize medical equipment and 
supplies, as offered in the report, would include prosthetic equipment. 
The danger is that there is no leadership or expertise in VHA to manage 
the standardization of prosthetics. There are certainly prosthetic 
items and supplies that can be standardized, but even those items must 
be carefully reviewed by an expert clinical team composed of 
clinicians, contracting, prosthetic and veteran representatives who use 
the particular items under consideration. Additionally, the report does 
not contemplate how far down the supply chain standardization of 
prosthetic equipment should go.
    If VA was to pursue the reforms recommended in this section, PVA 
has a number of implementation level items that could be offered to 
improve the process and increase the likelihood of a successful 
transformation.
                  Governance, Leadership and Workforce
Board of Directors

    Recommendation #9: Establish a board of directors to provide 
overall VHA Care System governance, set long-term strategy, and direct 
and oversee the transformation process.

    While PVA understands the intent of this recommendation, we do not 
support it. We agree with the notion that too frequent turnover of VHA 
leadership has stymied innovative leadership and transformational 
change. However, replacing politically-appointed leadership with a 
Board comprised of leaders representing multiple political ideologies 
will likely lead to even greater gridlock. At the very least, it is 
simply trading one political entity for another; it does not get rid of 
the political interference. We can easily envision a scenario where 
this new appointed Board becomes a reflection of the political 
leadership of Congress that has demonstrated no ability whatsoever to 
govern or compromise. While the current leadership of VA is based on 
nomination by the President and approval by the Senate, this proposal 
takes political influence too far. One only need to look at the 
workings of the Commission itself and a number of its politically-
motivated members to realize the potential negative consequences 
politically-driven decisions could have on the delivery of health care 
for veterans.
    Additionally, while the recommendation places emphasis on ensuring 
veterans are included on the Board, it does not include any real 
consideration of veterans' service organization representation.

Leadership

    Recommendation #10: Require leaders at all levels of the 
organization to champion a focused, clear, benchmarked strategy to 
transform VHA culture and sustain staff engagement.

    PVA supports this recommendation. This recommendation cuts at the 
necessary leadership to effect the cultural changes required to make 
VHA a more responsive and dynamic organization.

    Recommendation #11: Rebuild a system for leadership succession 
based on a benchmarked health care competency model that is 
consistently applied to recruitment, development, and advancement 
within the leadership pipeline.

    PVA supports this recommendation. Succession planning for 
leadership is a problem that exists across the federal government, not 
just at the VA. The process by which senior leaders are brought into 
the VA system, particularly VHA, is cumbersome and complicated. VA too 
often loses out on some of the best candidates because of the nature of 
the HR process that fills open leadership positions. The direct-hire 
authority proposed by the report could provide improved opportunities 
to bring on critically needed senior staff in the health care system. 
Additionally, a renewed focus on leadership development and management 
could ensure that the best candidates are retained in the VHA system.

    Recommendation #12: Transform organizational structures and 
management processes to ensure adherence to national VHA standards, 
while also promoting decision making at the lowest level of the 
organization, eliminating waste and redundancy, promoting innovation, 
and fostering the spread of best practices.

    PVA generally supports this recommendation. We believe the vision 
that the Commission provides for how to change the organizational 
structure of VHA could prove beneficial to improving management of the 
system and implementation of policy. We are disappointed that the 
report does not provide more discussion about the inefficiency of the 
current VISN structure. Additionally, we remain skeptical about the 
efficacy of the proposed simplification of the VHA budget. While this 
sounds reasonable out of context, it does not reflect the complicated 
nature of budget development and appropriations distribution within 
VHA.
    We do support the notion of more transparent and detailed 
accounting and disclosure of VHA's expenditures. This recommendation is 
consistent with recommendations made by the IB during debate and 
passage of legislation to establish advance appropriations for VA 
health care.

    Recommendation #13: Streamline and focus organizational performance 
measurement in VHA using core metrics that are identical to those used 
in the private sector, and establish a personnel performance management 
system for health care leaders in VHA that is distinct from performance 
measurement, is based on the leadership competency model, assesses 
leadership ability, and measures the achievement of important 
organizational strategies.

    PVA generally supports the creation of a workgroup to establish a 
new performance management system for VHA leadership. However, we are 
not certain that it is appropriate to establish performance metrics 
that are identical to those used in the private sector. The nature of 
VA health care delivery is appreciably different from the delivery of 
health care in the private sector. While there are some aspects that 
are similar, the VA health care system is not so much like the private 
sector that it should be evaluated in exactly the same manner. With 
this in mind, performance standards for employees and management should 
not be exactly the same either.

Diversity and Cultural Competence

    Recommendation #14: Foster cultural and military competence among 
all VHA Care System leadership, providers, and staff to embrace 
diversity, promote cultural sensitivity, and improve veteran health 
outcomes.

    PVA generally supports this recommendation; however, we take 
exception to the implication that VHA somehow lacks the cultural and 
military competence to provide veterans' health care. VA is the 
embodiment of veteran cultural competence, and it is, in fact, one of 
the notable reasons veterans who receive health care from VA prefer it 
over the private sector. We strongly support the recommendation that 
cultural and military competence be criteria for allowing community 
providers to participate in the VA's integrated health networks. In the 
past, private providers have openly testified before the House 
Committee on Veterans' Affairs that one of their primary concerns with 
treating veterans is not understanding veterans and their experiences 
as patients. This very circumstance is one of the primary reasons that 
the private sector is not the ultimate solution to VA's access 
problems.

Workforce

    Recommendation #15: Create a simple-to-administer alternative 
personnel system, in law and regulation, which governs all VHA 
employees, applies best practices from the private sector to human 
capital management, and supports pay and benefits that are competitive 
with the private sector.

    Recommendation #16: Require VA and VHA executives to lead the 
transformation of HR, commit funds, and assign expert resources to 
achieve an effective human capital management system.

    PVA supports many of the pragmatic ideas found in recommendations 
15 and 16 related to VHA workforce issues. A modernized and effective 
human resources operation is vital to any organization, especially one 
as large as VA. We believe the federal personnel system is one of the 
largest hindrances to effective management of the VHA system. 
Recommendations 15 and 16 deal with two aspects critical to successful 
reform: the authorities which govern the personnel system and the 
overall management of human resources (HR) within VHA.
    The multiple authorities governing the VHA personnel system are 
incompatible with a dynamic high-performing health care system. Hiring 
managers and their employees must attempt to understand the end-to-end 
hiring process under four separate rules systems. This unnecessarily 
adds complexity to the hiring system which is difficult for both the 
potential employee and the human resources staff to navigate. The 
unnaturally slow hiring process also produces lost talent. Quality 
employees do not often have the luxury to wait around for a VA 
employment application to be processed. Similarly, when an employee 
announces his or her forthcoming retirement or departure from VA, HR is 
unable to begin the recruiting or hiring process for that position 
until it is actually vacated. It not only causes an unnecessary vacancy 
- exacerbated by the lengthy hiring time - but it also prevents a warm 
handoff between employees and any chance for training or shadowing.
    PVA also believes that VA has suffered from its inability to be 
competitive with its private sector health care counterparts who do not 
face the same restrictions on pay and benefits for critical staff. We 
support the recommendations to align pay and benefits to make the VA 
more competitive for important staff with the private sector.
    The broad recommendation to consolidate all personnel authorities 
into one alternative personnel system will bring wide benefits, but it 
must also include increased flexibility in the actual hiring process. 
It must also establish clear standards for disciplining or removing 
poor performing employees without diminishing current due process 
protections afforded by law.
    In short, the VHA workforce arena is ripe for numerous practical 
changes that would provide realistic opportunities to reconcile 
personnel reform and preservation of the due process protections 
currently afforded to VHA employees.
                              Eligibility
    Recommendation #17: Provide a streamlined path to eligibility for 
health care for those with an other-than-honorable discharge who have 
substantial honorable service.

    PVA supports this recommendation. This recommendation mirrors 
legislation introduced earlier this year-S. 1567 and H.R. 4683, the 
``Fairness for Veterans Act''-which PVA publicly supported. There is 
overwhelming evidence that the effects of war can cause psychological 
harm, drastically changing the personality and behavior of 
servicemembers. Sometimes those effects manifest and adversely affect 
the terms of the veteran's discharge. It is a poor irony and ultimately 
unjust to withhold care for an injury incurred during service solely 
because that injury provoked or caused the actions which led to their 
discharge classification. While most commanders are dedicated and 
caring leaders, many do not have the intimate knowledge of a 
servicemember's behavior prior to the trauma they experienced during 
military service. Other leaders may even find it ``expedient'' to 
rapidly discharge an individual to rid themselves of a problem in the 
unit. Too often these discharges are determined without regard to the 
cause of the altered behavior. Having an effective mechanism to review 
the discharge in a deliberate manner can ensure that veterans deserving 
of care for injuries incurred as a result of their service are not 
denied.

    Recommendation #18: Establish an expert body to develop 
recommendations for VA care eligibility and benefit design.

    PVA is very cautious of this recommendation. The Commission 
generally supports with evidence its belief that the issue of 
eligibility needs to be reexamined or updated in order to better align 
capacity and demand. But it does not support or even present a 
rationale for why this undertaking should be conducted by an entity 
outside VA or Congress. The recommendation to outsource this task 
treads into the territory of eligibility with a different, and 
potentially harmful, perspective - that of business efficiency.
    The benefits currently afforded to, for example, Priority Group 4 
veterans reflects years of hard work and advocacy that forced our 
country's representatives to make tough business decisions within the 
context of long-accepted philosophical principles. What this country 
owes its veterans and what it can afford to pay cannot always be 
reconciled. It does not absolve this nation's responsibilities to its 
veterans. In such circumstances VA and Congress should act from the 
perspective that they must fight not just to better manage resources 
but to also find the necessary appropriations to cover the obligation. 
``Restructuring the debt'' and trimming veterans from the rolls based 
on a cold and calculated business-driven decision is not an option. The 
budget must not be balanced on the backs of veterans.
                               Conclusion
    Mr. Chairman, we would like to thank you once again for the 
opportunity to testify on this important issue. This concludes our 
statement for the record. We would be happy to answer any questions the 
Committee may have.

                                 
             VETERANS OF FOREIGN WARS OF THE UNITED STATES
    MR. CHAIRMAN AND MEMBERS OF THE COMMITTEE:
    On behalf of the men and women of the Veterans of Foreign Wars of 
the United States (VFW) and our Auxiliary, thank you for the 
opportunity to offer our thoughts on the Commission on Care's final 
report.
    The VFW thanks the Commission on Care for their hard work and 
extensive deliberations on how to improve the health care and services 
a grateful Nation provides its veterans. In particular, we thank 
Chairperson Nancy Schlichting for her work to build consensus among the 
commissioners and for her willingness to work with the major Veterans 
Service Organizations (VSOs) in order to gain an understanding of what 
veterans like and want to see improved in their health care system.
    While the VFW does not support every recommendation made by the 
Commission, we certainly believe the Commission accomplished its 
mission to propose bold transformation that can improve access to high 
quality care for our Nation's veterans. The VFW urges Congress and VA 
to act on the recommendations we support and consider alternatives to 
the ones we oppose.

    Recommendation #1: Across the United States, with local input and 
knowledge, VHA should establish high-performing, integrated community 
health care networks, to be known as the VHA Care System, from which 
veterans will access high-quality health care services.

    Similar to the Independent Budget's ``Framework for Veterans Health 
Care Reform,'' the Commission recommends developing high performing, 
integrated and community based health care networks that leverage the 
capabilities of private and public health care systems to meet the 
health care needs of veterans in each community. The VFW is glad to see 
the Commission also agrees that VA must remain the coordinator of care 
for veterans and must develop systems and processes to help veterans 
make informed health care decisions. Doing so is vital to ensuring 
veterans receive high quality and coordinated care, rather than 
fragmented care which the Commission agrees results in lower quality 
and threatens patient safety.
    That is why the VFW opposes the Commission's proposal to give 
veterans a list of primary care providers and then find one willing to 
see them. The VFW does not believe it is necessary to trade quality 
care coordination for choice. Veterans in need of a primary care 
provider must be offered the opportunity to discuss their preferences 
and clinical needs with a VA health care professional to determine 
which provider (including private sector, VA and other public health 
care providers) best fits their preferences and clinical needs. This 
would ensure veterans make informed choices and receive care tailored 
them.
    The VFW is also concerned that the Commission's recommendation on 
how veterans would navigate its proposed community delivered service 
(CDS) within the Veterans Health Administration (VHA) care system 
ignores the Commission's key findings regarding care coordination. 
Instead of fully leveraging the nurse navigators ``to help veterans 
coordinate their care in VA and in the community,'' as the Commission 
describes as a possible supplement to its CDS recommendation, it calls 
for private sector primary care providers to coordinate the care 
veterans receive and leaves veterans to fend for themselves when 
scheduling appointments with community specialty care providers.
    While we agree that a veteran's primary care provider must have 
visibility of all the care a veteran receives at VA and in the 
community, we strongly believe VA, not the primary care provider, must 
serve as veteran's medical home. This includes helping veterans 
schedule appointments with specialty providers when they receive a 
referral from their primary care provider, which would ensure veterans 
receive care that fits their preferences and clinical needs. This also 
includes consolidating a veteran's medical history into one electronic 
health care record that is accessible by the veteran's VA and community 
health care providers.
    In an effort to alleviate demand on its primary care providers, VA 
is moving towards direct scheduling for certain specialty care, such as 
optometry and audiology. The VFW agrees with VA that certain types of 
care may not require a primary care consult and believes VA must have 
the ability to waive primary care referral requirements for such 
specialties. Such waivers must also apply to veterans who receive care 
through community care networks, which further exemplifies the need for 
VA to serve as the medical home for enrolled veterans.
    Counter to the Commission's recommendation, the VFW does not 
believe that the majority of eligible care would shift from VA 
facilities to the community care networks. VFW surveys and direct 
feedback from veterans indicate that veterans would like to receive 
more of their care from VA health care professionals who know how to 
care for their service-connected conditions. In the VFW's ``Our Care'' 
report from September 2015, we found that 53 percent of veterans prefer 
to receive their care from VA providers, which is higher than VA's 
reported reliance rate of 34 percent. VFW surveys of veterans who are 
eligible for the Choice Program under the 40-mile rule, which affords 
them the option to receive private sector care without a referral from 
a VA provider, also indicate that the majority of veterans continue to 
prefer VA providers despite having unfettered choice.
    However, the VFW is very concerned that open networks could lead to 
veterans receiving care from providers that are available instead of 
the ones they prefer. The VFW has heard from veterans who use the 
Choice Program that they would prefer to go to VA, but their local VA 
facilities do not provide the services they need, or they would have to 
wait too long for an appointment.
    The VFW fears that VA and Congress would interpret such veterans' 
use of private sector care as their preference for private sector care, 
when in reality they would have preferred to receive VA care, but 
private sector care was their only option. Doing so could lead to more 
resources being directed to community care networks and further 
depleting resources VA is given to expand access to the care veterans 
prefer. That is why the VFW believes continuous evaluation and 
adjustments to community care networks, as recommended by the 
Commission, must be based on veterans' preference, not simply 
utilization of networks.
    Regardless if care is delivered through community providers or VA 
medical facilities, VA must remain the guarantor of care to ensure such 
care is high quality, veteran-centric and accessible. That is why the 
VFW strongly supports the Commission's recommendation that VA require 
community care network providers to report quality, service and access 
metrics. The VFW also believes veterans who receive care through 
community care networks must be afforded the same patient rights and 
protections they receive at VA medical facilities.
    The VFW also supports a phased implementation of integrated 
networks with ongoing management and evaluation, national strategy and 
local flexibility to ensure veterans' needs are met. However, the VFW 
opposes the Commission's recommendation of establishing a board of 
directors, as discussed in our views of recommendation number nine, and 
believe management and implementation of integrated networks must be 
overseen by a multidisciplinary team of VA subject matter experts with 
direct and consistent guidance from local VA health care professionals 
and VSOs, similar to the approach VA used to develop its plan to 
consolidate community care programs and authorities.

Clinical Operations

    Recommendation #2: Enhance clinical operations through more 
effective use of providers and other health professionals, and improved 
data collection and management.
    The VFW supports the recommendation to develop training programs 
for medical support assistants (MSA) to ensure VA health care providers 
devote more time to treating veterans rather than administrative tasks.
    While training is important, VA must also address the high turnover 
in MSA and entry level positions at the local level. VA has developed 
an expedited hiring process for MSAs as part of the MyVA 
transformation. The VFW fully supports this initiative, but believes VA 
must have statutory authority similar to the VA Canteen Service, which 
is exempt from title 5 hiring requirements and can directly hire entry 
level employees to fill high turnover positions.
    The VFW does not take a position on the recommendation to grant 
full practice authority to advance practice registered nurses. The VFW 
defers to VA in determining the most efficient and effective scope of 
practice of its providers. However, we will hold VA accountable for 
providing timely access to high quality health care, regardless if such 
care is provided by an advance practice registered nurse or a 
physician.

    Recommendation #3: Develop a process for appealing clinical 
decisions that provides veterans protections at least comparable to 
those afforded patients under other federally supported programs.

    VFW members have experienced firsthand the pitfalls of VA's 
clinical appeals process. The VFW agrees with the Commission that a 
well implemented clinical appeals process is necessary to improve 
patient satisfaction, ensure veterans obtain medically necessary care, 
and mitigate disagreements between veterans and their health care 
providers. Currently, veterans who disagree with clinical decisions by 
their health care provider can appeal to the medical center's chief 
medical officer, who is reluctant to overturn a decision made by VA 
health care providers. A veteran is then able to appeal to the Veterans 
Integrated Service Network (VISN) director, who rarely overturns a 
decision made by a medical center chief medical officer. The VISN level 
decision is final, unless a veteran appeals to the Board of Veterans 
Appeals, which is not a viable option for veterans who require time 
sensitive medical treatments.
    Due to the lack of a system wide clinical appeals process with 
national oversight, veterans have experienced vast differences when 
appealing clinical decisions between multiple VISNs. That is why the 
VFW strongly agrees with the commission's recommendation to convene an 
interdisciplinary panel to revise VA's clinical appeals process. Such a 
panel must ensure veterans have the ability to provide justification or 
evidence to support their appeals, which many VISNs do not permit. 
Veterans must also have the ability to appeal clinical decisions above 
the VISN level.

    Recommendation #4: Adopt a continuous improvement methodology to 
support VHA transformation, and consolidate best practices and 
continuous improvement efforts under the Veterans Engineering Resource 
Center.

    The VFW agrees that improving employee experience is a vital aspect 
of reforming the VA health care system. The majority of VA employees 
take pride in their jobs and continuously identify ways to improve 
efficiency and productivity. However, such employees have not been 
given the tools or the processes to identify problems and make changes. 
That is why the VFW supports efforts to identify and disseminate best 
practices and recognize innovative employees who improve the care 
veterans receive.

Health Equity

    Recommendation #5: Eliminate health care disparities among veterans 
treated in the VHA Care System by committing adequate personnel and 
monetary resources to address the causes of the problem and ensuring 
the VHA Health Equity Action Plan is fully implemented.

    The VFW supports this recommendation and agrees that health 
disparities based on social and economic differences have no place in 
the VA health care system. The VFW has heard directly from women 
veterans that VA employees have confused them for caregivers and 
spouses, or have challenged their veteran status because of their 
gender. Veterans of all races, backgrounds, and genders have sacrificed 
in defense of this Nation and must be treated with the respect and 
dignity they have earned and deserve.
    The VFW strongly supports building cultural and military competence 
among all community care network providers and employees. It is 
important that veterans receive care from providers who understand 
their health care needs and are familiar with the health conditions 
associated with their military service. This includes providers in VA 
medical facilities and private sector providers who participate in 
community care networks. By providing cultural competence training, VA 
would improve health care outcomes and ensure veterans receive care 
that is tailored to their unique needs.

Facility and Capital Assets

    Recommendation #6: Develop and implement a robust strategy for 
meeting and managing VHA's facility and capital asset needs.

    The VFW agrees with most of the recommendations provided regarding 
capital infrastructure.
    We agree that waiving congressional rules requiring budgetary 
offsets for a period of time and expanding the enhanced-use lease 
authority will allow VA to enter into needed leases, without accounting 
for the cost of the entire lease in the first year. However, suspending 
this offset requirement for a few years will leave VA in the same 
position it finds itself in today if Congress does not find a long term 
solution to VA's leasing authority. VA also needs broader authority to 
enter into enhanced-use leases agreements. Public Law 112-154 reduced 
VA's authority to allow for only adaptive housing. Returning it to its 
prior authority will allow VA to lease more of its unused or 
underutilized property, while still contributing to the mission of VA.
    The VFW also agrees that reevaluating the total cost of minor 
construction projects is needed. Currently, VA will submit multiple 
minor construction projects that appear to be related for a single 
facility. This is evidence that either the $10 million cap on minor 
construction projects needs to be increased or VA needs the authority 
to bundle multiple minor contracts for the ease of planning and 
appropriating several minor projects at one time without violating the 
$10 million cap. Regardless of whether the cap amounts are adjusted, 
underfunding will continue to place much needed construction projects 
in competition with each other. Congress must fund VA construction 
accounts to a level where projects to expand access are not in 
competition for resources for new facilities or eliminating safety 
risks in facilities VA must maintain.
    The Commission recommends that a board analyze and make 
recommendations regarding VA's infrastructure needs and the CDS 
networks. The VFW believes that most of the functions of this proposed 
commission are already being carried out by either the Strategic 
Capital Infrastructure Plan (SCIP) or the Federal Real Property Council 
(FRPC). The VFW believes that the current roles of SCIP and the FRPC 
would need to be expanded to include the evaluation of community care 
on the overall capital planning process. SCIP analysis should be 
expanded to include the feasibility for public-private partnerships and 
sharing agreements with other public and community provides. This would 
fulfil the idea of better leveraging community resources to expand VA's 
capacity and capabilities.
    The VFW does not agree with the Commission on Care's BRAC 
realignment commission. The SCIP process already addresses the issue of 
under/unutilized property, and it is Congress that has failed to act to 
remove these properties. The reason they have failed to act is the same 
reason they would fail to act under a BRAC-style recommendation--local 
pressure from the veterans' community would cause them to vote ``no.'' 
The solution is to develop better communication with the local 
veterans' community and present the replacement plan that will occur 
when their VA hospital is closed. Veterans' fear of losing VA care 
drives Congress' inaction, and no commission or board will fix that 
without improved communications.

Information Technology

    Recommendation #7: Modernize VA's IT systems and infrastructure to 
improve veterans' health and well-being and provide the foundation 
needed to transform VHA's clinical and business processes.

    The VFW agrees that VHA must have a chief information officer (CIO) 
to focus on the strategic health care information technology (IT) needs 
of the VA health care system. VA Assistant Secretary for Information 
and Technology LaVerne Council has discussed the need for a senior 
level employee to oversee VHA IT projects. The VFW agrees that the VHA 
CIO must work closely with VHA clinical and operations staff to ensure 
IT systems meet the needs of their users, but continue to report to the 
Assistant Secretary for IT to ensure interoperability with Veterans 
Benefits Administration (VBA) and National Cemetery Administration 
(NCA) systems.
    The VFW agrees that the lack of advance appropriations for VA's IT 
accounts has hindered VA's ability to properly fund IT projects, 
specifically ones associated with VHA which is funded under advance 
appropriations. That is why the VFW has continuously called for 
Congress to provide advance appropriations for all of VA's budget 
accounts. We thank this Committee and the Senate Committee on Veterans' 
Affairs for enacting legislation to authorize advance appropriations 
for VA's medical services and mandatory accounts to ensure veterans can 
continue to receive care and benefits during a government shutdown, but 
it is vital that VA's remaining accounts, including IT, community care, 
research, NCA, VBA, Inspector General and VA's four construction 
accounts receive advance appropriations to ensure VA can fulfill its 
mission to veterans.
    The VFW does not have a position on whether VA should purchase a 
commercial off-the-shelf (COTS) electronic health care system. However, 
the VFW agrees that VA should turn to COTS products when such products 
are financially beneficial and lead to improved services for veterans, 
but VA must have the authority to develop homegrown products when 
necessary.

Supply Chain

    Recommendation #8: Transform the management of supply chain in VHA.

    The VFW supports this recommendation to reorganize and standardize 
VA's supply chain to leverage economies of scale. This recommendation 
is similar to one of Secretary Robert McDonald's MyVA priority goals 
aimed at building an enterprise-wide integrated medical-surgical supply 
chain that leverages VA's scale to drive an increase in responsiveness 
and a reduction in operating costs, which the VFW fully supports.
    This transformation must rely on local level feedback and buy-in to 
succeed. While each medical facility cannot continue to dictate where 
their medical supplies are purchased, they must be given the 
opportunity to request specific supplies or products if needed in order 
to provide the best quality care. This is similar to non-formulary 
requests for prescriptions that are not on the VA's formulary. The 
transformation must also consider whether specific products are 
preferred or clinically needed by veterans, such as prosthetics 
equipment that may cost more, but lead to a better quality of life for 
veterans.

Board of Directors

    Recommendation #9: Establish a board of directors to provide 
overall VHA Care System governance, set long-term strategy, and direct 
and oversee the transformation process.

    The VFW opposes this recommendation. The VFW believes VA needs 
leadership, not management by Committee. Similar to the Commission on 
Care, the governance board would include political appointees, the 
majority of whom would be civilian health care executives and veterans 
who do not use the VA health care system. How, when and where veterans 
receive their health care cannot be determined by appointees who do not 
have a vested interest in improving the care and services veterans 
receive.
    Additionally, the VFW believes that a governance board would result 
in more bureaucracy. VHA's budget requests would still need to be 
approved by the Office of Management and Budget and appropriated by 
Congress. This recommendation also fails to resolve the misalignment 
between capacity to provide care and the demand on its programs that is 
highlighted in the Commission's report. The VFW recommends reforming 
the congressional appropriations process to ensure VA receives the 
resources it needs to meet veterans' health care needs, instead of 
creating more bureaucracy and further limiting how much care VA is able 
to provide.
    A number of reform ideas have been discussed to address this issue. 
One proposal is to make VA's health care accounts mandatory spending. 
Doing so would exempt VA health care accounts from discretionary budget 
caps which have limited VA's ability to expand access and implement 
needed reforms. Another proposal is to provide VA a true two-year 
budget by authorizing VA to transfer advance appropriations to its 
current year budget to cover budget shortfalls. However, such ideas 
have not been given proper consideration by Congress. The VFW believes 
it is time to consider innovative reforms to the VA health care 
appropriations process.
    This Committee, the Senate Committee on Veterans' Affairs, the 
Secretary of Veterans Affairs and the President must continue to 
provide oversight and management of the VA health care system with or 
without a governance board. Thus, a governance board would mean that 
VHA leadership would have additional management and reporting 
requirements which would only serve to further stymie the needed 
transformation process.

Leadership

    Recommendation #10: Require leadership at all levels of the 
organization to champion a focused, clear, benchmarked strategy to 
transform VHA culture and sustain staff engagement.

    The VFW supports this recommendation. As discussed above, employee 
experience is vital to restoring veterans' trust and confidence in 
their health care system. Secretary McDonald is in the process of 
addressing this recommendation by transforming VA from a rules based 
culture to a principles based culture that empowers VA employees to do 
what is right, instead of fearing reprisal for not following every 
rule. Several veterans have reported improvements in the culture at VA 
medical facilities, but more work is still needed.

    Recommendation #11: Rebuild a system for leadership succession 
based on a benchmarked health care competency model that is 
consistently applied to recruitment, development, and advancement 
within the leadership pipeline.

    The VFW supports this recommendation. We agree with the importance 
of succession planning and the need for robust structured programs to 
recruit, retain, develop and promote responsible and high performing 
leaders. Specifically, the VFW strongly supports the recommendation to 
adopt and implement a comprehensive system for leadership development 
and management. VA employees must be prepared and willing to fill 
vacancies in leadership positions to ensure VA is not required to rely 
on temporary leadership to run its medical facilities.

    Recommendation #12: Transform organizational structures and 
management processes to ensure adherence to national VHA standards, 
while also promoting decision making at the lowest level of the 
organization, eliminating waste and redundancy, promoting innovation, 
and fostering the spread of best practices.

    The VFW generally supports this recommendation. We agree that the 
VA central office and VISN office staff have grown too rapidly and that 
fragmented authorities, lack of role clarity and overlapping 
responsibilities impacts VA's ability to deliver high quality and 
efficient health care. Specifically, the VFW agrees that VHA must 
consolidate program offices to create a flat organizational structure 
to streamline VHA's current cumbersome and duplicative organizational 
structure.
    The VFW understands the Commission's recommendation that Congress 
should reduce the number of VA appropriations accounts. While it is 
essential for Congress to use its power of the purse to influence VA 
programs, Congress must do so effectively and not impede VA from 
fulfilling its mission. For example, the Military Construction and VA 
Appropriations Act recently passed by the House and being considered by 
the Senate limits VA's VistaA Evolution project to $168 million, but 
requires VA to meet certain requirements before the funds become 
available. While the VFW understands the need for such reporting 
requirements, we believe VA must have the flexibility to use such funds 
immediately. Withholding such funds only serves to further delay VA's 
plans to modernize its electronic health care record.

    Recommendation #13: Streamline and focus organizational performance 
measurement in VHA using core metrics that are identical to those used 
in the private sector, and establish a personnel performance management 
system for health care leaders in VHA that is distinct from performance 
measurement, is based on the leadership competency model, assesses 
leadership ability, and measures the achievement of important 
organizational strategies.

    The VFW supports this recommendation. It is important to develop a 
performance management system that effectively measures outcomes and 
holds VA leaders accountable for improvements.
    However, the VFW does not believe such performance measures need to 
be identical to those used in the private sector. VA performance 
measures must adopt best practices from the private sector, but they 
must also acknowledge VA's unique mission and the fundamental 
differences between private and public health care systems.

Diversity and Cultural Competence

    Recommendation #14: Foster cultural and military competence among 
all VHA Care System leadership, providers, and staff to embrace 
diversity, promote cultural sensitivity, and improve veterans' health 
outcomes.

    The VFW strongly supports this recommendation. As discussed above, 
cultural and military competence training of providers would ensure 
veterans receive care that is tailored to their unique needs.
    It is particularly important to build cultural competency among 
community care providers who do not have experience caring for veterans 
or may not be aware of best practices when caring for veterans with 
service-connected wounds and illnesses. A study by the RAND Corporation 
found that only 13 percent of private sector mental health care 
providers are ready and able to provide culturally competent and 
evidence based mental health care to veterans. The VFW believes VA must 
leverage the capacity of the private sector to provide mental health 
care to veterans, but it must also ensure veterans who use community 
care receive high quality and veteran-centric care by providing 
military competency training and sharing best practices with community 
care providers and ensuring such practices are adopted.

Workforce

    Recommendation #15: Create a simple-to-administer alternative 
personnel system, in law and regulation, which governs all VHA 
employees, applies best practices from the private sector to human 
capital management, and supports pay and benefits that are competitive 
with the private sector.

    The VFW supports this recommendation. VA must be able to recruit, 
train, retain and discipline a high performing workforce. The VFW 
agrees that civil service laws and regulations that govern how 
government employees are hired, how much they are paid, and how they 
are disciplined were not designed to support a high performing health 
care system. VA must have a personnel system that eliminates barriers 
to hiring and retaining high quality employees.
    We agree with the Commission that Congress must afford VA employees 
appropriate due process to appeal disciplinary actions. The VFW has 
also supported a number of accountability measures considered by this 
Committee, including H.R. 5620, the VA Accountability First and Appeals 
Modernization Act of 2016, which would expand the Secretary's ability 
to remove or demote employees for poor performance or misconduct. 
Overall, the process that is taken to remove or demote VA employees who 
commit malfeasance must ensure such employees are no longer allowed to 
collect a paycheck or harm veterans, but protect good employees and 
whistleblowers from being wrongfully terminated or retaliated against.
    The VFW also agrees with the need to improve VA's student loans 
reimbursement programs. However, VA is already authorized to reimburse 
health care professionals up to $120,000 over five years of student 
debt, which is similar to the National Health Service Corps' loan 
repayment plan program. While the VFW would support increasing the 
amount VA health care professionals may receive, it would not make VA 
more competitive when hiring or retaining high quality employees, 
because local facilities are not given enough funds to fully utilize 
this program. For example, the VFW heard from a VA nurse that her 
medical center is given $80,000 per year for the education debt 
reduction program. These means the facility could reimburse three 
providers the maximum allowed amount of $25,000 or divide the $80,000 
amongst its dozens of providers and render the retention incentive 
ineffective. To properly utilize this incentive, Congress and VA must 
properly fund this program.

    Recommendation #16: Require VA and VHA executives to lead the 
transformation of HR, commit funds, and assign expert resources to 
achieve an effective human capital management system.

    The VFW supports this recommendation. We often hear from VA medical 
facilities that they struggle to hire needed staff because of the 
cumbersome human resources (HR) process. Specifically, the outdated and 
ineffective rules and regulations that govern when and how VA can 
recruit possible candidates puts VA at a disadvantage when competing 
with the private sector to recruit high quality health care 
professionals.
    Secretary McDonald has made some progress in addressing this issue 
by deploying rapid process improvement workgroups which identify and 
resolve regulatory barriers that adversely impact the hiring process 
and improve an applicant's experience when applying for VA jobs. 
However, the VFW agrees with the Commission that VA HR systems and 
processes must be prioritized and improved. It is unacceptable for VA 
HR professionals to be required to operate 30 disparate IT systems. 
When HR is unable to do its job efficiently, VA medical facilities are 
not able to fill vacancies quickly, which leads to access problems that 
negatively impact veterans. It is also deplorable that VA's cumbersome 
HR rules and processes impede its ability to remove or demote 
wrongdoers.

Eligibility

    Recommendation #17: Provide a streamlined path to eligibility for 
health care for those with an Other-Than-Honorable discharge who have 
substantial honorable service.

    The VFW fully supports the recommendation to amend VA's current 
health care eligibility regulation and provide VA health care and 
benefits to veterans with other than honorable (OTH) discharges, if 
their overall service is deemed honorable. Under current law, a veteran 
who meets other eligibility criteria and has a discharge that is other 
than dishonorable is eligible for VA health care. However, VA's process 
for determining which veterans are considered to have an other than 
dishonorable discharge is flawed, and generally results in veterans who 
have anything less than an honorable discharge being denied benefits.
    This is a particular concern for veterans who served honorably in 
combat, but were administratively discharged upon returning home due to 
relatively small infractions, like missing formations or being charged 
with alcohol-related incidences. VA regulations do not consider 
discharges for minor offenses as dishonorable, if such veteran's 
service was otherwise honest, faithful and meritorious.
    Unfortunately, VA's process for determining eligibility is not 
consistent and often fails to properly account for a veteran's entire 
service. In their recent report, ``Underserved: How the VA Wrongfully 
Excludes Veterans with Bad Paper,'' Swords to Plowshares, the National 
Veterans Legal Service Program and the Veterans Legal Clinic at the 
Legal Service Center of Harvard Law School found that instead of 
granting OTH veterans the health care and benefits they have earned, VA 
has lumped them in with bad conduct and dishonorable discharges, which 
are reserved for servicemembers convicted of wrongdoing at a court 
martial--thus resulting in 90 percent of OTH veterans being denied the 
benefits and services they have earned.
    Without access to VA health care, those suffering from service-
related mental health injuries are left on their own to deal with their 
mental health symptoms, making recovery nearly impossible. The VFW 
supports amending VA's regulation to ensure veterans with OTH 
discharges who committed minor infractions but otherwise completed 
honorable service, receive full eligibility for health care and 
benefits. Additionally, VA must also ensure veterans who present to a 
VA medical facility with a medical condition that requires urgent or 
emergent medical attention, such as a veterans who shows signs of 
suicidal ideation, are not required to undergo a cumbersome character 
of discharge review before receiving lifesaving care. Veterans who are 
later determined to be ineligible for VA health care must be 
transitioned to other health care options, but veterans cannot be 
denied lifesaving care simply because VA rules require a flawed and 
time consuming character of discharge review process.

    Recommendation #18: Establish an expert body to develop 
recommendations for VA care eligibility and benefits design.

    In every past evaluation and change to the eligibility criteria for 
health care, access to care was increased to unserved populations of 
veterans, or eligibility was realigned to conform with an updated 
delivery model. With those two facts in mind, and understanding that 
the development of an integrated health care system will deliver care 
under a different model, the VFW supports the idea of studying access 
barriers based on current eligibility criteria while ensuring service-
connected, homebound and catastrophically disabled veterans do not 
incur barriers or delays in services or care. Additionally, the VFW 
would oppose any proposal to increase the health care cost shares for 
veterans.

                                 
                   VIETNAM VETERANS OF AMERICA (VVA)
    Chairman Miller, Ranking Member Takano, and distinguished members 
of this august Committee, Vietnam Veterans of America presents for the 
record, and for your consideration, our observations on the final 
report of the Commission on Care.
    Before we offer VVA's comments, we do want to acknowledge the 
yeoman efforts, accomplished on a very tight timeline, by the 
commissioners and the very knowledgeable and gifted commission staff. 
In particular, we want to applaud the strong and steady leadership of 
commission chair Nancy Schlichting, who piloted a ship with a diverse 
crew with very different ideas through very rocky waters. She deserves 
our praise, and your thanks.
    During public meetings of the commission, a number of folks, 
including the Chairman of this Committee, acknowledged that without a 
buy-in from the veteran's service organizations, the commission's 
recommendations, their vision, would not go very far. Although there 
are several very well-thought-out and logical recommendations that 
ought to be adopted via legislation from Congress or regulation from 
the Department of Veterans Affairs, the ``big picture'' as 
conceptualized by the commission is in many respects problematical, and 
cannot garner VVA's assent.
    Certainly, however, VVA does not quibble with the stated mission of 
the commission: to enhance and improve a health care delivery system 
that will ``provide eligible veterans prompt access to quality health 
care.''
    Let us begin with some facts:

      The Commission on Care was borne of the so-called Choice 
Act, enacted into black-letter law after legislators and the media 
finally recognized a situation that had existed for some two decades. 
It was a ``scandal'' that galvanized Congress to act, however 
belatedly. In fact, the media often put the adjective ``beleaguered'' 
before ``VA'' in their reportage after the scandal broke. That neither 
Congress nor the Administration nor the media had taken heed about a 
long-standing situation before did not even make the back-story.
      The Veterans Health Administration is an integrated 
managed care network, the largest in the nation. Long before the 
legislation that created the Choice Act, a provision of which 
established the Commission on Care, the VHA availed veterans of care by 
community providers, when necessary or appropriate. More than one out 
of every ten VA health care dollars was expended outside of VA Medical 
Centers and community-based outpatient clinics, or CBOCs.
      VA Medical Centers, for the most part, provide ``one-stop 
shopping'' for primary and specialty care, something that is not 
afforded at most private-sector hospitals and health care facilities. 
In addition, the VHA, under the gritty leadership of the current Under 
Secretary for Health Dr. David Shulkin, is making significant strides 
in transforming the VA health care system and embracing greater 
community care.
      The quality of care in VHA facilities is good to 
excellent and is in many areas superior to care from private hospitals 
or medical centers. This the commission has acknowledged. The issue is, 
as it has been, one of access into VA health care facilities, where 
there are too few clinicians to meet the needs of the veterans the VA 
is charged with serving. Yet the shortage of health care professionals 
is hardly limited to the VA; this is a national problem, one that is 
particularly acute in rural and remote areas as well as in inner 
cities.

    Now, it should be noted at the outset that the commission's 
recommendations for transformative change in health care delivery are 
not intended as an immediate palliative; rather, the charge of the 
commission was to envision what the VA health care delivery system 
should look like in 20 years, and to provide a blueprint on how to get 
there.
    To the commission's credit, commissioners rejected the goal of some 
to privatize VA health care. They nixed the idea of unfettered 
``choice,'' of giving eligible veterans the option of going to any 
private-sector health care providers of their choosing, with the VA 
footing the bills, which would have transformed the VA, in effect, into 
a source of income. They would scrap the time (30 days) and distance 
(40 miles) criteria for access to community care, one of the provisions 
of VACAA, the Veterans Access, Choice, and Accountability Act.
    Several of the commission's recommendations ought to be seriously 
considered and adopted, via either legislation or executive action. 
These, which can be done under the current construct of the VHA, 
include:

      Convening ``an interdisciplinary panel to assist in 
developing a revised clinical-appeals process'' (Recommendation #3).
      Consolidating idea and innovation portals, and best 
practices and continuous improvement efforts, in the currently 
underutilized Veterans Engineering Resource Center. The commission 
imagines the VERC as having considerable input in properly aligning 
``systemwide activities [that] require substantial change''- human 
resource management, contracting, purchasing, information technology 
(Recommendation #4).
      Making health care equity ``a strategic priority,'' 
increasing ``the availability, quality, and use of race, ethnicity, and 
language data to improve the health of minority veterans and other 
vulnerable veteran populations with strong surveillance systems that 
monitor trends in health status, patient satisfaction, and quality 
measures'' (Recommendation #5).
      Because the VHA ``not only lacks modern health care 
facilities in many areas, but generally lacks the means to readily 
finance and acquire space, to realign its facilities as needed, or even 
to divest itself easily of unneeded buildings . . . it is critical that 
an objective process be established to streamline and modernize VHA 
facilities . . .'' The commission also offers that the ``facility and 
capital asset realignment process'' be modeled after the wildly 
unpopular but necessary DoD Base Realignment and Closure Commission 
(BRAC) process ``as soon as practicable.'' With Congress not overly 
enthusiastic about the BRAC process for eliminating outmoded or 
unneeded DoD facilities here in CONUS, to think that legislators will 
embrace this idea of shuttering VA facilities is pie-in-the-sky 
(Recommendation #6).
      ''. . . VA requires a comprehensive electronic health 
care information platform that is interoperable with other systems; 
enables scheduling, billing, claims, and payment, and provides tools 
that empower veterans to better manage their health'' (Recommendation 
#7).
      Because VHA's supply chain management ``is encumbered 
with confusing organizational structures, no expert leadership, 
antiquated IT systems that inhibit automation, bureaucratic purchasing 
requirements and procedures, and an ineffective approach to talent 
management,'' the VA should establish the position of VHA chief supply 
chain officer, to be compensated ``relative to market factors,'' the 
first step in achieving ``a vertically integrated business unit 
extending from the front line to central office'' (Recommendation #8).
    Perhaps the key recommendation of the commission that we can 
embrace is the need to achieve strong, sustained - and sustainable - 
leadership on all levels of the VHA. Congress must therefore authorize 
``new and expanded authority for temporary rotations and direct hiring 
of health care management training graduates, senior military treatment 
facility leaders, and private not-for-profit and for-profit health care 
leaders and technical experts.'' The VHA also should establish ``two 
new programs. The first is to create opportunities for VHA physicians 
to gain masters-level training in health care management to prepare 
them to lead a medical facility. Second, VHA should work to create 
rotations in VHA for external physicians who are completing graduate 
health care management programs.''
    What the commission advocates here, and what was a key discussion 
point during its public meetings, is the need to attract, and to train, 
the best and the brightest, who would serve for a set term or the long 
term, and who would be recompensed according to the market in a 
particular catchment area. To achieve this, Congress must empower the 
VHA to offer competitive salaries and benefits to attract the most 
qualified candidates, both from within and from out of the VHA 
hierarchy (Recommendation #11).
    The commission notes the need for ``developing the cultural and 
military competence of [VHA] leadership, staff, and providers, as well 
as measure the effects of these efforts on improving health outcomes 
for vulnerable veterans.'' The commission is on target in asserting 
that ``cultural and military competency'' must be among the criteria 
for ``credentialing'' external clinicians to treat veterans 
(Recommendation #14).
    Finally, here is a relatively radical recommendation that warrants 
congressional scrutiny and consideration: ``Provide a streamlined path 
to eligibility for health care for those with an other-than-honorable 
discharge who have substantial honorable service.'' The commission 
recognizes, rightfully, that some former servicemembers in fact ``have 
been dismissed from military services with an other-than-honorable 
(OTH) discharge because of actions that resulted from health conditions 
(such as traumatic brain injury [TBI], posttraumatic stress disorder 
[PTSD], or substance use) caused by, or exacerbated by, their 
service,'' thus rendering them ineligible for VA health care and other 
benefits. ``This situation leaves a group of former servicemembers who 
have service-incurred health issues (namely mental health issues) 
unable to receive the specialized care VHA provides'' - care that they 
vitally need.
    The commission proposes, ``VA revise its regulations to provide 
tentative eligibility to receive health care to former servicemembers 
with an OTH discharge who are likely to be deemed eligible because of 
their substantial favorable service or extenuating circumstances that 
mitigate a finding of disqualifying conduct.'' This may not be simply a 
matter of the VA revising regulations - Congress will need to enact 
legislation to enable the VA to treat these veterans - but it is an 
idea worthy of merit.
    THE FUNDAMENTAL PROBLEM, however, with the commission's 
conceptualization for the future of VA health care commences in the 
language of its initial recommendation. This calls for ``. . . 
community-based health care networks'' that will ``integrate health 
care within communities.'' This would essentially fold VA-provided 
health care into a wider community-oriented network of providers rather 
than integrating local or regional providers into a VA network. It is 
this overall structure envisioned by the commission of a ``new'' VHA 
that is the problem.
    Perhaps more basic to the relationship between clinician and 
patient is the assumption that most veterans want to choose their 
primary and specialty health care providers. This precept, the second 
basic issue we have with the commission's blueprint, is fundamentally 
flawed. The commissioners tripped up in paying fealty at the altar of 
Choice, in conceptualizing an entirely new governance structure, in 
sublimating VA health care facilities into an expansive community 
context dubbed the ``VHA Care System.'' Yes, by all means VA clinicians 
should continue to refer veterans to outside providers when and where 
appropriate to improve access as well as to provide care that VA 
clinicians are unable to deliver. However, no, the VA should not cede, 
as the commission recommends, the role of primary care clinician to 
non-VA personnel; this would be a critical misstep, undermining the 
integrity and managed care the VA offers.
    If a veteran needs to see a specialist, s/he often has little 
ability to divine on his or her own whom to go to and must rely on the 
recommendation of their primary care provider. In the brave new world 
envisioned by the commission, the veteran can ``choose'' to see the 
``credentialed'' specialist of his/her choice. Does anybody really 
think that this will enable a veteran to get same-day service from a 
busy clinician? Alternatively, provide better care than s/he can 
receive at a VAMC or CBOC? On the other hand, save the system money?
    In addition, consider the potential for this: If a patient who is 
covered by private health insurance chooses to be treated by a 
physician not in the network assembled by her health insurer, she has 
to pay that doctor out of pocket and fill out a claim form to receive 
some reimbursement from her insurer. Yet what if that veteran wants to 
go to a clinician whom the VA has not credentialed? Will he have to 
shell out his own money, even if he has a disability rated at, say, and 
70 percent? Will that veteran complain to his Member of Congress, who 
will then demand from the local VHA Care System why Dr. X has not been 
``credentialed''? It is not difficult to foresee a bureaucratic 
headache of major proportions.
    ``Foundational among the changes'' the commission seeks is 
``forming a governing board to set long-term strategy and oversee the 
implementation of the transformation process, and building a strong, 
competency-based leadership system.'' This is the third fundamental 
misconception of the commission. The governing board that the 
commission envisions as necessary to achieving a ``bold 
transformation'' ignores reality. Their ``Board of Directors'' would be 
a paper tiger that, without the power of the purse, can only recommend, 
not appoint or institute, thus making it a board of advisors.
    In addition, veteran service organizations and veteran leaders in 
effect already function as an informal board of advisors on the 
national and local levels. The VA would have far fewer perceptional 
problems if its leaders and senior managers acknowledged this and 
worked in concert with VSOs as a matter of course, seeking and 
embracing our ideas and input at the beginning of a process, not pro 
forma near its conclusion.
    The commission also calls for the creation of ``a simple-to-
administer personnel system, in law and regulation, which governs all 
VHA employees, applies best practices from the private sector to human 
capital management, and supports pay and benefits that are competitive 
with the private sector.'' Such a system would render VA hiring as 
separate and unequal to how hiring is done in the rest of the federal 
government. (There can be little argument that ``VHA lacks competitive 
pay, must use inflexible hiring processes, and continues to use a 
talent management approach from the last century.'') Hence, the 
recommendation that ``Congress create a new alternative personnel 
system . . . in collaboration with union partners, employees, and 
managers . . . that applies to all VHA employees and falls under Title 
38 authority . . . and improves flexibility to respond to market 
conditions relating to compensation, benefits, and recruitment.''
    On one hand, this makes eminent good sense: to obtain and retain 
top professionals in both medical treatment and hospital 
administration, the VA health care system needs to be competitive with 
the incentives in the private sector. Moreover, certainly, VHA's 
ability to hire qualified staff cannot continue to be hamstrung by 
bureaucratic constraints and ineptitude. While many clinicians choose 
to work at the VA because of job security and protected pensions, 
others also feel a calling to use their skills to care for the men and 
women who have served the nation in uniform, many of whom have special 
needs derived from their wartime experiences.
    On the other hand, however, Congress quite likely will be skeptical 
at best about setting precedent by creating an alternative personnel 
system. Convincing you in Congress to in effect turn the VHA into a 
quasi-governmental entity while continuing to fund its operations will 
be the ultimate hard sell. It was the wait-time access issue, a long-
time reality in many VA medical centers that raised the ire of 
Congress, not the quality of health care delivered by VAMC personnel. 
Integrating additional health care providers into the VA system, where 
appropriate and when needed, is part of the rejuvenation of the VHA 
under the current Undersecretary. This makes sense.
    The conceptualization of the commission to create a new entity, one 
in which VA and private sector clinicians, many with similar skill 
sets, in essence ``compete'' to treat veterans will not materially 
improve health care for those veterans who obtain their care at a VA 
facility. It is likely to dramatically increase the costs of providing 
care; and it is likely to lead to the underutilization of certain VA 
medical centers and community-based outpatient clinics and the 
subsequent shuttering of several of them, with the consequent turmoil 
in staff morale and, eventually, the loss of tens of thousands of jobs. 
Still, the VA must resolve a situation that continues to plague it: 
``Hiring timelines [for medical professionals] can span 4-8 months 
compared to private-sector hiring that takes between 0.5 and 2 
months.'' (See Recommendation #16.)
    There is yet one more recommendation that we find problematical.
    Prefacing this, the commission acknowledges that the capacity of 
the VA to provide care ``is constrained by appropriated funding.'' In 
its recommendation that Congress or the President charge some entity 
with examining the ``need for changes in eligibility for VA care and/or 
benefits design, which would include simplifying eligibility 
criteria,'' the commission opens the door to initiating pilot projects 
``for expanded eligibility for nonveterans to use underutilized VHA 
providers and facilities, providing payment through private 
insurance.''
    The 1996 eligibility reform act created eight ``priority'' groups 
of veterans eligible for VA health care. Priority 7 and Priority 8 
veterans, who are not afflicted with service-connected conditions, must 
agree to a co-pay for the health care and prescription drugs they 
receive from the VA. They account for some 40 percent of third-party 
collections by the VA. In addition, the Vet Centers, as a matter of 
course, do treat the family members of veterans, a necessity to 
successfully treat many of the mental health maladies suffered by the 
veterans they love.
    To open a beleaguered health care system to non-vets seems counter-
productive. Moreover, it also would dilute the very essence of what 
should be a veteran-centric system. Because there is a certain 
specialness inherent in receiving care in a place where your service is 
acknowledged, where an array of conditions - traumatic amputations, 
spinal cord injuries, mental health afflictions - are understood, where 
you are among your peers. On this, a monetary value cannot be placed 
(Recommendation #18).
    The commission acknowledges the raison d'etre for its own creation 
by the same act of Congress that initiated the so-called Choice 
Program: the issue of access. Yet it also acknowledges, ``Access is not 
a problem for VHA alone: Delivering timely care is challenging for many 
providers and health systems, in part due to the unavailability of 
providers in some communities and national shortages of some categories 
of health professionals.''
    The commission notes the key question with which Congress must 
grapple: Does the VA health care delivery system, despite the wait-time 
scandal, require ``fundamental, dramatic change - change that requires 
new direction, new investment, and profound reengineering''? This is a 
question VVA and other VSOs, MSOs, and veterans across the country need 
to consider: Can the VA, given the impetus generated by the issue of 
access, fix itself, or does it require a radical reformation, one that 
can conceivably result in its demise?
    We believe that the VA, specifically the Veterans Health 
Administration, can fix itself and in fact is fixing itself, in great 
measure because of the impetus generated by passage of the VACAA. We 
would hope that you in Congress will monitor what VA leadership is 
accomplishing; and that members of the media who cover veterans issues 
would focus less on dramatically highlighting the problems and more on 
what is being done to ameliorate them. When the VA messes up, by all 
means report it and let Congress call VA leadership on the carpet. 
However, report, and so acknowledge, some of the good things that the 
VA has been doing, e.g., making what is now a cure for hepatitis C 
available to all veterans enrolled in the VA health care system. 
Thousands of lives are being saved, and this, too, ought to be 
reported.
    Vietnam Veterans of America appreciates having the opportunity to 
submit, for the record, our position and our conclusions vis a vis the 
recommendations of the Commission on Care. In addition, we thank you 
and members of the Senate Veterans Affairs Committee for all that they 
have done, and are doing, for veterans and our families.

                                 
                 HEALTHCARE PROFESSIONALS FEDERAL UNION
 Policy Brief re Commission on Care Final Report: Major Recommendation 
                Ignores Data, Risks Veterans' Healthcare

    from

    Association of VA Psychologist Leaders
    Association of VA Social Workers
    Nurses Organization of Veterans Affairs
    Veterans Affairs Physician Assistant Association
    American Federation of Government Employees
    National Federation of Federal Employees
    National Association of Government Employees
    National Nurses United
    American Psychological Association
    National Association of Social Workers

    July 22, 2016

    On June 30, 2016, the Commission on Care submitted its Final Report 
required by the Veterans Access, Choice, and Accountability Act of 
2014.

    As organizations comprised of and representing health care 
practitioners, researchers, educators, administrators and personnel 
devoted to serving Veterans, we have serious reservations about the 
report's major recommendation to replace the current VHA with a new 
entity, to be known as the VHA Care System. In the proposed VHA Care 
System, Veterans would be permitted to receive care from any local 
facility or provider who has been credentialed by VHA. Oversight for 
Veterans' health care would be handed over to a newly created, external 
governance board.
    According to the Commissions' charter, ``final recommendations will 
be data driven.'' As we demonstrate below, the recommendation to 
establish a new VHA Care System is at odds with compelling evidence of 
the VHA's current effectiveness. VHA can best serve Veterans by 
expanding access to services the VHA currently provides.

      The current VHA system provides health care that is as 
good as, and more often superior to, non-VA care. The Commission's 
Final Report affirmed this higher quality in VHA, as does RAND's 2015 
evaluation (http://www.rand.org/pubs/research--reports/RR1165z2.html), 
RAND's 2016 summary (http://www.rand.org/ pubs/research--reports/
RR1165z4.html) and a 2016 literature review of 60 scientific 
publications (http://bit.ly/1UOlEmF). The VHA outperforms non-VA care 
on adherence to recommended preventative care guidelines, adherence to 
recommended treatment guidelines, outpatient processes and outpatient 
outcomes. Nevertheless, the Commission's Final Report ignores the 
implication that vastly expanding reliance on local non-VA providers 
and facilities could worsen, not improve, Veterans' health care.
      The proposed VHA Care System disassembles one of the most 
effective, innovative features of current VHA care - the Primary Care/
Mental Health Integration approach. The Final Report concedes that such 
integration is largely missing in the community (p.22). Also absent in 
private sector health care are the integrated, wrap around services the 
VA offers through financial, educational, housing, caregiver and 
employment support.
      The Final Report recognizes that VHA provides better 
coordinated care. ``Veterans who receive health care exclusively 
through VHA generally receive well- coordinated care, yet care is often 
highly fragmented among those combining VHA care with care secured 
through private health plans, Medicare, and TRICARE. This fragmentation 
often results in lower quality, threatens patient safety, and shifts 
cost among payers'' (page 28). It is the VHA, not the disjointed, 
larger non-VA system, which is the true provider of Veteran-centric 
community care.
      The Final Report anticipates that 60 percent of eligible 
care will shift from VHA facilities to outside networks (p.31). The net 
result will reduce, not expand, Veterans' choices, since to pay for 
this shift, a VHA Care System will incrementally downsize the number of 
VHA providers and programs. The VHA system would be weakened.
      The Final Report estimates the cost of creating and 
implementing a new VHA Care System to range from $65 billion to $85 
billion in 2019, with a middle estimate of $76 billion (p. 32). That's 
$11 billion more than the FY 2017 VHA medical care budget. If Congress 
saw fit to fund billions more yearly, there are better ways to 
strengthen the VHA, starting with expanded hiring at VA facilities 
where demand for services exceeds available staffing. But if Congress 
did not, the Final Report suggests that the expensive VHA Care System 
could offset costs by decreasing the number of Veterans eligible for VA 
health care, cutting services, or increasing Veterans' out-of-pocket 
expenses. In any of those scenarios, Veterans are worse off.

    In sum, given the evidence of overall quality, efficiency, 
integration and innovation within the VHA, we believe that efforts to 
reform the VHA can best serve Veterans by expanding access to services 
the VHA currently provides. Where geographic challenges exist and/or 
VHA does not offer specific services, the VHA should purchase services 
from non-VA partners.
    Any proposed transformation of the VA health care system should be 
data driven. Don't risk our Veterans' health care on unproven ideas. We 
must preserve and strengthen the VHA integrated health care community 
that Veterans deserve and overwhelmingly prefer.

    Contact Information;

    Thomas Kirchberg, PhD
    President, Association of VA Psychologist Leaders
    (901) 596-6708

    Ron Gironda, PhD
    President-Elect, Association of VA Psychologist Leaders
    (813) 380-9378

    [email protected]

                                 
                        Materials For The Record

               LETTER FROM CHAIRMAN MILLER TO MARK TAKANO

    September 8,2016

    The Honorable Mark Takano
    Acting Ranking Member
    House Committee on Veterans' Affairs
    333 Cannon House Office Building
    Washington, DC 20515

    Dear Acting Ranking MemberTakano,

    Yesterday, at the business meeting regarding the issuance of a 
subpoena for records pertainingto, among other things, the 
Administrative Investigat ion Board (AIB) report for the Aurora 
Replacement Medical Center construction project, you implied that only 
the Minority had concerns about VA mismanagement of the project and 
only the Minority was willing to withhold funding for its continuation 
. Specifically, you suggested that the Majority pushed through 
authorization ``in the middle of the night'' by a voice vote ``over the 
concerns of the Minority.'' Nothing could be further from the truth.
    A review of the two extenders bills increasing the authorization 
for the project from $900 million to just over $ 1 billion (S. 1568) 
and then again to $1 .675 billion (S. 2082) show that both passed in 
the full light of day with strong bipartisan support. S. 1568 passed 
the House at 2:28 PM while S. 2082 passed at 3:08 PM, neither of which 
are remotely close to the middle of the night. Moreover, while S. 1568 
passed the House without objection by unanimous consent, the yeas and 
nays for S. 2082 were taken resulting in a final vote of 423-0. The 
record includes your vote in favor of that authorization increase. See 
http://clerk.house.gov/evs/201 5/roll526.xml.
    Please also consult the Congressional Record related to S. 2082. 
See 161 Cong. Record 142, 1-16719-l-!6727 (1st Sess., Sept. 30, 2015), 
https:VW.Congress.gov/crec/201 5/09/30/CREC- 2015-09-30-pt l -PgH67 I9-
4.pdf. You will see that I expressed serious reservations about 
authorizing an additional $625 million absent accountability by VA 
management and conditions on how the Department would cover the cost 
without jeopard izing medical care accounts. These concerns were 
reflected in the thoughtful remarks of our colleague Representative 
Dina Titus. You should also be aware that the authorization included a 
critical provision stripping VA of day-to -day management authority 
over super construction and transferring it to another federal entity, 
such as the Army Corps of Engineers.
    Construction of the Aurora project has run $1 billion over its 
original budget and has been the subject of ongoing outrage from 
members of both parties of this Committee. If there was a 
misunderstanding regarding your comments, please let me know. But, I 
felt it important to correct the record on such an important topic.
    If you have any questions or concerns, please contact Jon Towers, 
Staff Director, at (202) 225-3527.
    With warm personal regards, I am,

    Sincerely

    JEFF MILLER
    Chairman

    CJM/hr

                                 
        LETTER FROM ROBERT A. MCDONALD TO PRESIDENT BARACK OBAMA
    August 2, 2016

    The Honorable Barack Obama
    President
    The White House
    Washington, DC 20500

    Dear Mr. President:

    Two years ago, you tasked me to transform the Department of 
Veterans Affairs (VA) for the 21st Century. Since then, VA has 
established a comprehensive, enterprise-wide transformational process 
named MyVA, which has already increased Veterans' access to health care 
and begun improving Veterans' experience of VA's benefits and services.
    The direction we have taken and the progress we have made has been 
largely validated by the Commission on Care (Commission) in its Final 
Report, which VA received on July 7, 2016. After thoroughly reviewing 
the report, and receiving input from our Veterans Service Organizations 
(VSOs), I am pleased to say that 12 of the Commission's 18 
recommendations are objectives VA has already accomplished or has been 
working toward for the past two years as part of the MyVA 
transformation. Although we differ with the Commission on some details 
and are pursuing alternative approaches where warranted, we agree with 
the Commission that many changes planned by MyVA, recommended by the 
Commission, and strongly supported by VSOs, will likely require 
resources and remedies that only Congress can provide. These issues and 
our many transformation efforts are summarized in the enclosure to this 
letter.
    VA strongly disagrees with the Commission on its proposed ``board 
of directors'' to run the Veterans Health Administration (VHA). Such a 
board is neither feasible nor advisable for both constitutional and 
practical reasons. The U.S. Department of Justice has concluded that 
the Constitution prevents Congress from appointing persons to exercise 
authority over Executive branch agencies and as such, would prevent the 
proposed board from exercising the authorities assigned to it by the 
Commission. The Commission's proposal would also seem to establish VHA 
as an independent agency, undoing the work of the VSOs in creating VA 
as a Cabinet-level department. The powers exercised by the proposed 
board would undermine the authority of the Secretary and the Under 
Secretary for Health, as well as weaken ownership of the MyVA 
transformation and VHA performance. This could potentially disrupt and 
degrade VA's implementation of critical care decisions that affect 
Veterans. The proposed independent VHA agency would also run counter to 
our ongoing efforts to improve the Veteran's experience by integrating 
Veterans health care with the many other services provided to Veterans 
by the Veterans Benefits Administration and the National Cemetery 
Administration.
    At present, VA is served by 25 advisory Committees, including a 
newly reconstituted Special Medical Advisory Group, which consists of 
leading medical practitioners and administrators, and a newly 
established MyVA Advisory Committee, which brings together business 
leaders, medical professionals, government executives, and Veteran 
advocates. These advisory Committees advise VA on strategic direction, 
facilitate decision making, and introduce innovative business 
approaches from the public and private sectors. With their help, the 
Department has begun the process of transforming VHA from a loose 
federation of regional health care systems to a highly integrated 
national enterprise, based on a new model of care with VA as both the 
payer and provider. This model will provide Veterans with the full 
spectrum of health care services and additional choice, but without 
sacrificing VA's foundational health services upon which many Veterans 
depend. Additionally, many VSOs fear that the Commission's vision would 
compromise VA's ability to provide specialized care for spinal cord 
injury, prosthetics, traumatic brain injury, post-traumatic stress 
disorder, and other mental health needs, which the private sector is 
not as equipped to provide.
    In October 2015, VA submitted to Congress our Plan to Consolidate 
Community Care, which lays out our vision of a consolidated community 
care program that is easy to understand, simple to administer, and 
meets the needs of Veterans, community providers, and VA staff. This 
plan incorporates feedback from key stakeholders, including VHA field 
leadership and clinicians, representing diverse groups and backgrounds. 
VA has already begun what work we can without legislation to make the 
plan a reality. Over the course of the last 12 months, our Choice 
Provider network has grown by 85 percent. The network now has over 
350,000 providers and facilities across the Nation. Over 930,000 unique 
Veterans have used the Veterans Choice Program (VCP). Over 100,000 
Veterans with 40-mile eligibility used VCP through May 2016. 
Authorizations for care under the Veterans Access, Choice, and 
Accountability Act (VACAA) have increased by 82 percent over 9 months 
(October 2015 to June 2016), and VCP authorizations have quadrupled 
from approximately 380,000 in fiscal year (FY) 2015 to almost 2 million 
in FY 2016.
    However, VA cannot accomplish the ongoing transformation through 
MyVA or recommend by the Commission without critical legislative 
changes and funding. VA has aggressively pursued these needed changes 
and funding. As you know, more than 100 legislative proposals for 
Veterans were included in your 2017 Budget. Many of these proposals are 
vital to maintaining our ability to purchase community care. We 
continue to work to move these critical initiatives forward and are 
encouraged by the fact that most have been considered in legislative 
hearings or included in omnibus bills moving towards floor 
consideration, like the bipartisan Veterans First Act, which passed the 
Senate Veterans Affairs' Committee unanimously. These bills include 
some of the provisions of the Purchased Health Care Streamlining and 
Modernization Act we submitted to Congress in May 2015, such as an 
enhanced-use lease authority, compensation reform for medical 
professionals, and a measure of budgetary flexibility to respond to 
Veterans emerging needs and overcome artificial funding restrictions on 
providing Veterans care and benefits. These provisions would go a long 
way toward ensuring the success of MyVA, but other important 
legislative issues still need to be addressed, especially the 
consolidation of VA's many purchased care authorities and modernization 
of VA's archaic claims appeals process.
    Your strong support for Veterans has been critical to the progress 
made so far, but VA needs Congress' assistance to make the 
transformation intended by the Commission and already underway in MyVA 
to accomplish the changes needed to serve Veterans as the need and 
deserve to be served now and for generations to come.
    Thank you for your continued support of our Nation's Veterans.

    Sincerely,

    Robert A. McDonald

    Enclosure
    August 2016

                     Department of Veterans Affairs
                    Review of the Commission on Care
    Over the past two years, the Department of Veterans Affairs (VA) 
has been working energetically, through its MyVA initiative, to 
transform the Veterans Health Administration (VHA) from a loose 
federation of regional health care systems to a highly integrated 
national enterprise, based on a new model of care with VA as both the 
payer and provider. This model will provide Veterans with the full 
spectrum of health care services, plus more choice, but without 
sacrificing VA's foundational health services that many Veterans depend 
on.
    In October 2015, VA delivered to Congress a plan for evolving our 
current system into a high-performance network based on timely access 
to foundational services and integration of private-sector providers. 
Building on more than a decade of working with community partners 
through multiple mechanisms, this plan would consolidate the various 
mechanisms, expand our network of providers, and enhance the network's 
capability to deliver services essential to Veterans' health.
    Many of the Commission on Care's (Commission) recommendations are 
aimed in the same direction and are already being implemented as part 
of VHA's MyVA transformation. VA finds 15 of 18 Commission 
recommendations feasible and advisable (#1-3, 5-8, 10-16, and 18) and 3 
not feasible or advisable (#4, 9, and 17). VA is already implementing 
changes with the same intent as 12 recommendations (#1-3, 5, 7-8, 10-
11, and 13-16); recommends alternative approaches to 2 recommendations 
to bring them in line with other MyVA reforms (#6 and 12); and will 
work with the President, Congress, Veterans Service Organizations, and 
other stakeholders on recommendation #18.
    Many of the Commission's recommendations also require action by 
Congress. VA has aggressively pursued legislative changes and funding 
that would enable VA to achieve its MyVA vision. More than 100 
proposals for legislative changes were included in the President's 2017 
Budget. VA also submitted to Congress in May 2015 the Purchased Health 
Care Streamlining and Modernization Act, parts of which have been 
incorporated into the Veterans First Act in the Senate. Many of VA's 
proposals, which are vital to maintaining our ability to purchase non-
VA care, are pending Congressional action.
Recommendation #1: VHA Care System

    ``Across the United States, with local input and knowledge, VHA 
should establish high-performing, integrated community-based health 
care networks, to be known as the VHA Care System, from which Veterans 
will access high-quality health care services.''

    VA finds this recommendation feasible and advisable and is already 
implementing changes as part of VA's MyVA transformation, with some 
modifications in approach to achieve the vision described above.
    In October 2015, VA submitted to Congress its Plan to Consolidate 
Community Care, which lays out our vision of a consolidated community 
care program that is easy to understand, simple to administer, and 
meets the needs of Veterans, community providers, and VA staff. This 
plan incorporates feedback from key stakeholders, including VHA field 
leadership as well as clinicians, representing diverse groups and 
backgrounds.
    Immediate steps to improve the stakeholder experience were 
identified and included in the plan, including reducing unnecessary 
steps in the processes to enroll and connect Veterans with community 
care; improving communications between VHA, provider, and Veterans; 
improving care coordination in the long term for Veterans through 
improved exchange of certain medical records; and aligning the 
Veteran's community care journey along five major touch points: 
eligibility, community care network, referral and authorization, care 
coordination, and provider claims payment.
    Eligibility: The Plan recommends the creation of eligibility 
criteria to streamline the many different requirements for community 
care into standard criteria without opening community care to all 
enrolled Veterans. This is VA's principal point of difference with the 
Commission on its proposed VHA Care System. VA believes the 
Commission's recommendation to extend community-care eligibility to all 
Veterans by eliminating the Veteran Choice Program's (VCP) current time 
and distance criteria (30 days and 40 miles) is not advisable without 
Congressional funding due to the expected cost increase and desire to 
not sacrifice VA's four statutory missions: delivering hospital care 
and medical services to Veterans, educating and training health 
professionals, conducting medical and prosthetic research, and 
providing contingency support to other Federal agencies during 
emergencies. Many VSOs fear that the Commission's vision would 
jeopardize VA's ability to provide specialized care for spinal cord 
injury, prosthetics, traumatic brain injury, posttraumatic stress 
disorder (PTSD), and other mental health needs, which the private 
sector is not as equipped to provide. For this reason, VA opposes 
elimination of the current time and distance criteria.
    Community Care Network: VA has since begun developing the 
requirements for the new community-care network contract, with 
standards and criteria developed from input by industry, facility 
staff, and program office staff representing a broad spectrum of needs. 
These standards and criteria will be included in the draft Request for 
Proposal (RFP) for the community care network that will open for bid 
later in calendar year 2016. Legislation is needed to improve Veterans 
experience by consolidating existing programs and standardizing 
eligibility criteria.
    Referral and Authorization: To ensure that Veterans have access to 
the full spectrum of health care services, VA will focus on areas in 
which it can excel (VA-delivered foundational health services) and 
develop locally defined community partnerships for specialty care as 
needed. Standards and criteria for specialty care referrals are 
currently being developed for inclusion in the draft RFP. While the 
primary care provider will coordinate referrals for specialty care 
within the integrated VHA Care System, VA should be seen as the prime 
provider for special emphasis services. For example, VA is the leader 
in integrating primary care and mental health care and should be seen 
as the primary care provider for these services. When VA cannot provide 
a primary care provider, Veterans will be able to select from 
credentialed providers in the high-performing network.
    Care Coordination: The Plan stresses care coordination with a focus 
on customer service, emphasizing the need for care coordination for 
Veterans who receive community care as well as in VA. This coordination 
would include both the primary care provider staff as well as other VA 
staff. In cases where VA cannot provide the care coordination for 
Veterans, the services may be provided through the community care 
network. In other cases, VA coordinators make more sense. This is true 
in the Alaska VA Healthcare System, where VA staff will fill an 
intermediary role currently performed by VCP contractor TriWest to make 
scheduling an inherently VA activity, in response to local concern that 
calling out-of-state VCP contractors resulted in delays in care 
coordination, mostly attributed to time-zone differences and a lack of 
understanding of Alaska's unique geography.
    Provider Claims Payment: VHA is also already working to streamline 
reimbursement methodologies among its various community care programs 
and to develop a standardized, transparent process for reimbursing 
providers in an integrated delivery network. VHA and the Centers for 
Medical and Medicaid Services (CMS) are identifying CMS innovations in 
value-based payment methods on a limited basis. Legislation is needed 
to revise reimbursement rates under the Veterans Access, Choice, and 
Accountability Act to allow for flexibility from Medicare fee-for-
service reimbursement methodologies to value-based methodologies of the 
future.
    Legislation is needed to effectively consolidate existing community 
care programs, which would reduce confusion among Veterans, community 
providers, and VA staff. The Commission states that in order to achieve 
the recommendations, VA must have ``flexible and smart procurement 
policies and contracting authorities.'' VA strongly agrees and has 
aggressively pursued legislative changes that would ensure that the 
appropriate level of flexibility is available to best serve Veterans. 
In May 2015, VA submitted the Purchased Health Care Streamlining and 
Modernization Act to Congress. This legislation supports key points of 
VA's Plan to Consolidate Community Care and would allow VA to enter 
into agreements with individual community providers outside of Federal 
Acquisition Regulations, without forcing providers to meet excessive 
compliance burdens.
    VA is also concerned that the Commission's cost estimates do not 
accurately reflect the likely cost of its proposed system. From a 
baseline estimate of $71 billion, the Commission estimates that the 
cost of its recommended option for Veterans' health care for fiscal 
year (FY) 2019 ranges from $65 billion to $85 billion, with a middle 
estimate of $76 billion. However, the Commission estimates the cost 
could increase to $106 billion in FY 2019 if VA is unsuccessful in 
tightly managing the network and focusing on costs. We appreciate the 
analysis underpinning the Commission's estimates, but caution that the 
cost of implementing the Commission's recommendation is likely to be 
significantly higher, for the following reasons:

      The estimates do not include the substantial investment 
in information technology (IT) resources that would be required to 
fully integrate VA care with community care or the administrative/
contractual costs of operating the community-delivered services 
component of the integrated network.
      The estimates assume that VA can realign and consolidate 
personnel in five years to best provide health care to Veterans, which 
is an aggressive timeline.
      The estimates do not address the cost of realigning or 
divesting capital assets as additional care is delivered in the 
community. While VA agrees in principle with the Commission's 
recommendation to develop and implement a robust strategy for meeting 
and managing VHA's facility and capital-asset needs (see Recommendation 
#6), we note that the realignment, consolidation, and divestiture of 
capital assets will require substantial resources and time.
      The estimates are highly dependent on Veteran enrollment 
in, reliance on, and utilization of VA health care, all of which are 
difficult to predict, as most Veterans enrolled in the VA health care 
system have other sources of health care coverage. Extending community 
care to more Veterans could cause Veterans who now rely on Medicare, 
Medicaid, or private insurance to use VA care for more of their health 
care needs because of lower copays or greater convenience, increasing 
VA's costs.
      Finally, we must caution that the estimates do not 
reflect the entire VA Medical Care budget as they do not include the 
cost of programs that are not modeled by the VA Enrollee Health Care 
Projection Model. These programs include readjustment counseling, non-
medical homeless programs, Caregivers, Health Professions Educational 
Assistance Program, Income Verification Match, CHAMPVA, Spina Bifida, 
Children of Women Vietnam Veterans, etc. In total, they are estimated 
to cost $8.2 billion in FY 2017.

Recommendation #2: Enhancing Clinical Operations

    ``Enhance clinical operations through more effective use of 
providers and other health professionals, and improved data collection 
and management.''

    VA finds this recommendation feasible and advisable and is already 
implementing changes as part of VA's MyVA transformation, with some 
modifications in approach.
    VHA is already engaged in processes to make full use of the skills 
held by VHA providers and other health professionals. VHA is a leader 
in the use of clinical pharmacists to increase capacity by renewing 
prescriptions or ordering medication refills independently, after the 
initial prescription by a licensed physician or nurse practitioner. In 
addition, many VA clinical pharmacists have a scope of practice that 
provides prescribing authority and enables them to run pharmacist-
managed clinics focused on medication therapy management for chronic 
diseases. For example, about one third of all prescriptions for the 
treatment of the Hepatitis C virus are written by clinical pharmacists
    VHA has also developed a draft regulation that would standardize 
full practice authority for advanced practice nurses, to assure a 
consistent continuum of health care services by the practitioners 
across VHA and decrease the variability in advanced nurse practice that 
currently exists as a result of disparate State practice regulations. 
The proposed draft regulation was published in the Federal Register; we 
are now reviewing comments received. Implementation of full practice 
authority will increase Veteran access by alleviating the effects of 
national health care provider shortages on VA staffing levels and 
enabling VA to provide additional health care services in medically 
under-served areas. Implementing this policy, as recommended by the 
Commission, will allow VA to parallel the policies of other Federal 
agencies, including the Department of Defense (DoD) and the Indian 
Health Service, as well as many institutions in the private sector.
    VHA's Diffusion of Excellence initiative is an operational 
infrastructure that allows for sharing of promising practices across 
the enterprise. This model incentivizes and institutionalizes the 
identification and diffusion of practices nationwide so that every 
facility has the opportunity to implement the solutions that are most 
relevant to them. In the first round of submissions, 13 Gold Status 
Best Practices were selected from more than 250 ideas through a series 
of reviews and a final ``Shark Tank'' competition. The next step 
assigned each Gold Status Best Practice and their originating Gold 
Status Fellows to Action Teams managed by the Diffusion Council for 
implementation VHA-wide.
    VA seconds the Commission's call for Congress to relieve VHA of 
bed-closure reporting requirements under the Millennium Act. The Act's 
arbitrary requirements have not kept up with changes in the Veteran 
population or the health care environment. Legislation is needed to 
remove the Act's bed change reporting codified at 38 U.S.C. 8110(d) and 
the staffing level and service requirements specific to such bed 
changes under section 38 U.S.C. 1710B(b), while retaining staffing and 
service requirements for all other Extended Care Services. VA would 
replace the mandated congressional reporting of bed closures with a 
stronger, clearer, and more stringent internal process to review and if 
appropriate, approve bed closure proposals.
    VA is already moving forward to hire and train more clinical 
managers and medical support assistants (MSAs). In response to Section 
303 of the Veterans Access, Choice, and Accountability Act of 2014 (PL 
113-146), each VA Medical Center now has a Group Practice Manager 
(clinical manager). Additional hiring and training of these group 
practice managers will continue through February 2017. VHA is also 
developing new training and hiring procedures for MSAs throughout the 
organization as part of MyVA. VA has developed and launched an MSA 
hiring project called ``Hire Right, Hire Fast'' and is currently 
piloting a new hiring procedure that allows for industry-standard bulk 
hiring of MSAs to hire MSAs within 30 days of a vacancy. Two-week, 
standardized onboarding training for all new MSAs is also being 
developed and piloted. Both new processes will begin being deployed 
nationally this fall.

Recommendation #3: Appealing Clinical Decisions

    ``Develop a process for appealing clinical decisions that provides 
veterans protections at least comparable to those afforded patients 
under other federally-supported programs.''

    VA finds this recommendation feasible and advisable and is already 
implementing changes as part of VA's MyVA transformation, with some 
modifications in approach, taking into account important differences 
between the mission and authority of the VA health care system and 
other Federally-supported programs.
    VHA is already in the early stages of developing a regulation in 
response to the Commission's recommendation. This regulation will 
establish a cohesive baseline national policy for clinical appeals. A 
clinical appeals regulation will be published for notice and comment in 
accordance with the Administrative Procedure Act. Recently enacted 
legislation in section 924 of the Comprehensive Addiction and Recovery 
Act of 2016 establishes an Office of Patient Advocacy in the Office of 
the Under Secretary for Health. In addition, in 2015 VHA established 
the Office of Client Relations to assist Veterans clinical care access 
concerns.
    An interdisciplinary panel will be tasked with evaluating feedback 
from these offices and other Veteran support resources to improve the 
overall clinical appeals process, consistent with external benchmarks 
and factors described by the Commission, Federal regulations and 
statutes, and sound clinical practice. The resulting recommendations 
may differ in certain aspects from those envisioned by the Commission, 
but will undoubtedly be a uniform, fair, world-class clinical appeals 
process that protects Veterans and is fully compliant with law and 
regulation. VA's revised process will complement the Veterans 
Experience Office's efforts to better serve Veterans, make improvements 
based on customer feedback, and engage the community.

Recommendation #4: Consolidation of Improvement Efforts

    ``Adopt a continuous improvement methodology to support VHA 
transformation, and consolidate best practices and continuous 
improvement efforts under the Veterans Engineering Resource Center.''

    VA finds this recommendation neither feasible nor advisable, but is 
already implementing an alternative approach that institutionalizes 
continuous improvement as part of VA's MyVA transformation.
    Health care improvement takes place within a complex socio-
technical system with multiple aspects of technology and technical 
expertise. Placing improvement under an engineering system, such as the 
Veterans Engineering Resource Center (VERC), may harness the technical 
aspects of improvement, but it will not provide the balance of critical 
cultural and people aspects. VA believes doing so would unbalance 
safety and efficiency and not be successfully transformational.
    Ongoing VA transformation efforts have been achieved by 
specifically aligning VERC assets with enterprise priorities so that 
appropriate engineering perspectives and skills are interwoven with 
current organizational priorities. To institutionalize VHA's commitment 
to continuous improvement, VHA will realign the VERC and the 
operational improvement arm of Strategic Analytics for Improvement and 
Learning (SAIL) under the Principal Deputy Under Secretary for Health. 
This will elevate the health-system subject matter experts who drive 
transformation in VHA's organizational structure, while continuing to 
use the VERC to ensure that supporting engineering resources are 
available across all VA transformational efforts.
    Additionally, VA's enterprise approach to improving performance-
through Lean Six Sigma (Lean) tools and training, Leaders Developing 
Leaders training, MyVA Performance Improvement Teams, MyVA Communities, 
the MyVA Ideas House, and many other initiatives across the VA system-
has taught us the value of a central repository for local programs and 
ideas, both successful and unsuccessful. To that end, VA and VHA have 
embraced the Integrated Operations Platform (IOP) hub, a knowledge-
management technology platform developed by the VERC in partnership 
with subject matter experts. The IOP consolidates information on 
continuous improvement activities across VA in key programs, and as a 
result, best practices and innovation activities are currently visible 
in one common platform.
    VA has invested significantly in developing Lean capacity at local 
levels so that problem solving is done at the lowest level and with a 
team of safety, quality, and improvement professionals. This prepares 
the local facilities to improve their current environment while 
scanning constantly for emergent new problems.

Recommendation #5: Eliminating Healthcare Disparities

    ``Eliminate health care disparities among veterans treated in the 
VHA Care System by committing adequate personnel and monetary resources 
to address the causes of the problem and ensuring the VHA Health Equity 
Action Plan is fully implemented.''
    VA finds this recommendation feasible and advisable and is already 
working to address each of the Commission's concerns as part of VA's 
MyVA transformation.
    VA's Office of Health Equity (OHE) was established in 2012 with the 
mission of championing health equity among vulnerable Veterans. The 
office developed the Health Equity Action Plan (HEAP) in 2014 in 
conjunction with the Health Equity Coalition and with concurrence from 
the Under Secretary for Health. The HEAP is VHA's strategic roadmap to 
reducing Veteran health disparities. It aligns with the goals of MyVA 
and the VHA Strategic Plan. VHA will make health equity a priority by 
directing implementation of the HEAP nationwide.
    The appropriate placement of OHE within the VHA organizational 
structure, along with adequate resources, will be considered as a 
priority component of the broader VHA restructuring addressed in 
Recommendation 12. This will take into account funding and staffing 
levels commensurate with the scope and size of Federal offices of 
health equity established in the Department of Health and Human 
Services, based on direction in the Affordable Care Act. VA will also 
identify health equity leaders and clinical champions in each VA 
District, Veteran Integrated Service Network (VISN), and Medical 
facility who can catalyze and monitor actions to implement the HEAP and 
further advance the elimination of health disparities.
    VA has undertaken systematic actions to identify and address health 
care disparities and inequality. Examples include the development of 
Hepatitis C Virus Disparities dashboard projected, scheduled for launch 
by the end of FY 2016; data support and research collaborations with 
the Quality Enhancement Research Initiative designed to identify health 
care disparities; establishment of a Population Health office that has 
developed clinical case registries focusing on the needs of special 
populations; and establishment of the Women's Health and Lesbian, Gay, 
Bisexual, Transgender (LGBT) program offices. VA Medical Facilities 
constitute 20 percent of Human Rights Campaign's Health Care Equality 
Index participants in 2016, and they were the only facilities to 
achieve leader status in some States.

Recommendation #6: Facilities and Capital Assets

    ``Develop and implement a robust strategy for meeting and managing 
VHA's facility and capital asset needs.''

    VA finds this recommendation feasible and advisable but recommends 
alternative approaches as part of VA's MyVA transformation.
    VA believes that the Commission's recommendation is critical to 
enabling the successful transformation of the large-scale health care 
system to a higher-performing integrated network to serve Veterans. 
Without a strong suite of capital planning programs, tools, and 
resources, VA will not be able to fully realize the benefits and 
Veteran outcomes expected from implementing an integrated health care 
network. VA also strongly agrees with the Commission that greater 
budgetary flexibility and greater statutory authority are essential to 
meeting VA's facility needs, realigning VA's capital assets, and 
streamlining processes to divest itself of unneeded buildings.
    VA recommends alternative approaches to two issues:

      Once VA determines its mix of health care services and 
how they are provided at the market level based on the integrated 
health care approach, realignment of VA's capital infrastructure 
framework will be needed. Instead of a realignment process encompassing 
both assets and services based on DoD's Base Realignment and Closure 
Commission, VA proposes an independent facilities realignment 
commission (IFRC) to focus solely on VA's infrastructure needs once the 
mission services are determined. The IFRC would develop a systematic 
capital-asset-focused realignment plan for infrastructure needs to be 
presented to the Secretary of Veterans Affairs and the President for 
decision, with Congress approving or disapproving the plan on an up-or-
down vote.
      With regard to focusing new capital on ambulatory care 
development, VA proposes a balanced approach to maintain needed 
infrastructure and other key services (e.g., rehabilitation, community 
living centers, and treatment for spinal cord injury, traumatic brain 
injury, polytrauma, and PTSD), while at the same time appropriately 
investing in ambulatory care in needed markets. The balanced approach 
would be based on a market-by-market determination of the appropriate 
mix of services to ensure Veterans have access to needed care.

    VA agrees with the recommendation to move forward immediately with 
repurposing or disposing facilities that have already been identified 
as being in need of closing. Continued focus in this area is needed and 
VA is already working towards this goal, subject to the availability of 
staff and resources.
    VA also acknowledges that there will be anticipated challenges in 
implementing such large-scale realignments and restructuring of VA's 
footprint. Legislation will likely be required facilitating changes to 
VA's capital infrastructure to implement a transformation of this 
nature, including:

      Establishing an IFRC to develop a systematic capital-
asset-focused realignment plan.
      Streamlining processes to meet the intent of laws and 
regulations, such as the National Historic Preservation Act and the 
National Environmental Policy Act that would make repurposing and 
divesture more timely and effective.
      Potentially restructuring appropriations to allow for 
more flexible transfer and reprogramming authority, including potential 
threshold adjustments.
      Exploring methods (both legislative and administrative) 
to take advantage of private-sector financing.
      Revising the major medical lease authorization process to 
align the requirements in concert with practices at other Federal 
agencies.
      Granting VA authority to retain and utilize proceeds 
generated from real property divestitures.
      Expanding enhanced-use leasing authority.

    Further analysis will be required to determine the specific level 
of resource investments required to implement the Commission's 
recommendations. It is clear that significant additional resources will 
be required. In addition, divestiture of unneeded VA assets is unlikely 
to generate significant savings because of the upfront resources 
required to execute the divestiture and minimal market value of the 
majority of VA's assets. Without the proper resources, tools, and 
authorities, attempts to divest of assets or streamline capital project 
execution will not be effective.

Recommendation #7: Modernizing IT Systems

    ``Modernize VA's IT systems and infrastructure to improve veterans' 
health and well-being and provide the foundation needed to transform 
VHA's clinical and business processes.''

    VA finds this recommendation feasible and advisable and is already 
implementing changes as part of VA's MyVA transformation, with some 
modifications in approach, understanding that investments in IT will 
force difficult decisions concerning the allocation of limited 
financial resources among all VA programs and services, as well as 
across the Federal government.
    As part of the MyVA Breakthrough Initiative to transform VA IT, VA 
will soon appoint a Senior Executive System (SES)-equivalent position 
for a Chief Health Informatics Officer (CHIO), reporting to the 
Assistant Deputy Undersecretary for Health for Informatics and 
Information, to collaborate with the VA Chief Information Officer (CIO) 
and the IT Account Manager toward developing a comprehensive health IT 
strategy and supporting budget proposal. The CHIO and ADUSH will be 
responsible for prioritizing all health technology programs and 
initiatives, with strategic technological guidance from the VA CIO and 
IT Account Manager for health. To comply with the Federal Information 
Technology Acquisition Reform Act (FITARA), the CHIO does not take the 
place of the VA CIO, but instead works in concert with IT management to 
ensure that health initiatives are appropriately prioritized within the 
portfolio, while the CIO works with VA senior leadership so that all 
technology initiatives are prioritized holistically, thus ensuring 
complete Veteran care. VHA and VA's Office of Information and 
Technology (OI&T) are already collaborating on the vision and strategy 
for a single integrated Digital Health Platform (DHP).
    VA has also established five district senior-executive Customer 
Relationship Manager positions to work with the local VHA, Veterans 
Benefits Administration, National Cemetery Administration, and staff 
office leaders, aggregate feedback for analysis by VHA and OI&T senior 
leadership, and enhance a continuous feedback loop. The VA CIO recently 
established the Veteran-focused Integration Process program within the 
Enterprise Program Management Office (EPMO) to facilitate continuous 
improvement and constant collaboration.
    The Commission recommended that the VA CIO develop and implement a 
strategy to allow the current nonstandard data to effectively roll into 
a new system, and engage clinical end-users and internal experts in the 
procurement and transition process. VHA is currently working with OI&T 
to ensure that the Veterans Information Systems and Technology 
Architecture (VISTA) data is mapped to national standards. The new CHIO 
will be responsible for engaging clinical end-users in the transition 
to the new DHP. The Under Secretary for Health and the CIO will 
establish a joint program office responsible for the implementation of 
the DHP. This process will be focused on delivering and coordinating 
high-quality care for Veterans.
    The EPMO is responsible for portfolio management and has adopted a 
policy of ``best-fit, buy-first'' in its Strategic Sourcing function. 
This ensures that existing best-in-class technology solutions are 
purchased whenever possible, rather than being developed and maintained 
by VA. These functions, in combination with the role and focus of the 
IT Account Manager, will provide the required focus for VHA to 
implement a comprehensive commercial off-the-shelf IT solution to 
include clinical, operational, and financial systems.

Recommendation #8: Modernizing Supply Chain

    ``Transform the management of the supply chain in VHA.''

    VA finds this recommendation feasible and advisable and is already 
implementing changes as part of VA's MyVA transformation, with some 
modifications in approach.
    VA believes the components of this recommendation that suggest 
establishment of a Chief Supply Chain Officer (CSCO) and realignment of 
all procurement and logistics operations under the CSCO executive 
position are feasible and advisable, but it recommends an alternative 
approach to fulfill the Commission's intent. The structural solution 
recommended by the Commission would not adequately address underlying 
management challenges associated with organizational complexity and the 
need to improve integration processes impacting the supply chain. 
Realignment of VHA's supply-chain structure, including roles and 
responsibilities of the various VA Central Office staff offices, health 
networks, and medical facilities, should derive from and be integrated 
with the transformation of the overall VHA health care organization 
structure. The intent of the Commission will be met by addressing 
alignment issues as the supply-chain breakthrough initiative evolves 
and is synchronized with VHA's overarching strategies to transform 
VHA's organizational structure.
    As an alternative, the intent of the Commission is already being 
addressed in an effective manner under the current MyVA Breakthrough 
Initiative to transform VHA's supply chain. This initiative is a more 
comprehensive approach to fulfilling the Commission's intent and is 
already driving much needed improvements in data visibility and 
quality, synchronization of technology deployments, standardization, 
contract compliance, and training. Already in FY 2016, VHA supply-chain 
transformation efforts have yielded approximately $45 million in cost 
avoidance. VHA has also developed a two-year supply-chain 
transformation stabilization guidance that will put VHA in a far better 
position to make effective decisions and investments beyond FY 2018 for 
vertically aligning VHA's management structure and for more efficient 
sourcing and distribution of all clinical supplies and medical devices. 
This will increase the availability of supplies for the care of 
Veterans and result in cost avoidance for American taxpayers.
    With regard to the component of the recommendation asking VA and 
VHA to establish an integrated IT system to support business functions 
and supply-chain management, although feasible it is more advisable 
that technology investments beyond those currently in the pipeline 
should be avoided until such time that a mature supply-chain baseline 
is established, upon which prudent future IT investment decisions can 
be based. This is especially important given VA's Financial 
Modernization System initiative and emerging plans for a new DHP, both 
of which will impact legacy and contemporary supply-chain systems and 
interfaces, as well as influence system-improvement alternatives and 
investment decisions over the next two to five years. Supply-chain 
system improvements must be integrated and synchronized with enterprise 
financial and health care system enhancements to achieve efficiencies 
in service delivery and support analysis of integrated data to meet 
VHA's current and future needs.
    Finally, as suggested, VHA will continue to use VERC capabilities 
to support the transformation of supply-chain management in accordance 
with the MyVA Breakthrough Priority Initiative #12: VHA Supply Chain 
Transformation. As a point of clarification, the Commission report is 
technically incorrect in that the VERC is not leading the MyVA supply-
chain modernization initiative; rather, the VERC is a highly valued 
enabling organization engaged by the VHA Procurement and Logistics 
Office to support the MyVA initiative.

Recommendation #9: Governance Board

    ``Establish a board of directors to provide overall Veterans Health 
Administration (VHA) Care System governance, set long-term strategy, 
and direct and oversee the transformation process.''
    VA finds the Commission's recommendation neither feasible nor 
advisable due to its unconstitutionality. However, VA believes the 
intent of the Commission can be achieved regarding the term appointment 
of the Under Secretary for Health.
    The U.S. Department of Justice has concluded that the proposed 
board of directors, as appointed and with the powers proposed by the 
Commission, would be unconstitutional for several reasons. Permitting 
Congress to appoint the board members would violate the Constitution's 
Appointments Clause (U.S. Const. art. II Sec.  2, cl. 2), as well as 
the separation of powers, insofar as congressionally appointed board 
members would be exercising significant operational authorities within 
the Executive Branch. In addition, giving this board authority to 
reappoint the Under Secretary for Health would violate the Appointments 
Clause and the separation of powers. Finally, requiring the board to 
concur with the President in removing the Under Secretary for Health 
would give the board a veto authority over the President, impairing the 
President's ability to ``take Care that the Laws be faithfully 
executed,'' (U.S. Const. art. II, Sec.  3), and violating the 
separation of powers.
    The proposed board would also seem to separate VHA from VA without 
necessarily insulating VHA from political pressure or improving VHA 
oversight or operations. The powers exercised by the proposed board 
would undermine the authority of the Secretary and the Under Secretary 
for Health and weaken ownership of the MyVA transformation and VHA 
performance, potentially disrupting and degrading VA's implementation 
of critical care decisions affecting Veterans. The independence granted 
VHA would run counter to our ongoing efforts to improve the Veteran's 
experience by integrating Veterans health care with the many other 
services VA provides through the Veterans Benefits Administration and 
the National Cemetery Administration. Furthermore, VA is already 
advised by the Special Medical Advisory Group, which consists of 
leading medical practitioners and administrators, and by the MyVA 
Advisory Committee, which brings together business leaders, medical 
professionals, government executives, and Veteran advocates with 
diverse expertise in customer service, strategy development and 
implementation, business operations, capital asset planning, health 
care management, and Veterans' issues. These Committees already provide 
VA with outside expert advice on strategic direction, facilitating 
decision making and introducing innovative business approaches from the 
public and private sectors.
    The Commission correctly notes that frequent turnover of the Under 
Secretary for Health has had a negative impact on VHA and greater 
stability in this important leadership position is needed. VA supports 
a term appointment of the Under Secretary for Health spanning 
Presidential transitions to ensure continuity of leadership and 
continued transformation of VHA. Previously, 38 U.S.C. Sec.  305 
provided for a four-year term for the Under Secretary for Health with 
reappointment possible, but this provision was removed in 2006. A term 
appointment could be reinstated, beginning with the current Under 
Secretary for Health. This is critically important at this juncture 
given the need to see the ongoing transformation of VHA through to 
completion. Under Secretary for Health candidates are currently 
recommended by a commission established solely for that purpose. More 
analysis is needed to determine length of tenure and timing of 
reappointment.

Recommendation #10: Leadership Focus

    ``Require leaders at all levels of the organization to champion a 
focused, clear, benchmarked strategy to transform VHA culture and 
sustain staff engagement.''

    VA finds this recommendation feasible and advisable and is already 
implementing changes as part of VA's MyVA transformation, with some 
modifications in approach.
    Recent or ongoing actions serving the Commission's intent include:

      VA has established the MyVA Task Force to guide VA 
through the transformation and established a Department-wide MyVA 
transformation office, which has formulated an integrated plan for 
transformation and is organizing the work on 12 breakthrough 
priorities.
      Metrics and key performance indicators are in place for 
each breakthrough priority. Each breakthrough priority has a 
designated, accountable official who is a member of the senior 
leadership team and a near-full-time responsible official in charge of 
driving progress.
      One of the 12 breakthrough priorities in the MyVA 
Transformation is employee engagement, for which we have a 
comprehensive action plan.
      VA has also established a MyVA Advisory Committee (MVAC) 
consisting of business leaders, medical professionals, government 
executives, and Veteran advocates. VA leadership meets quarterly with 
the MVAC, leveraging them as a corporate board from which to seek 
counsel on the overall transformation.
      MyVA has engaged leaders and employees throughout the 
organization via Leaders Developing Leaders (LDL) (over 54,000 
participants to date), VA101 (over 79,000 participants to date), 
various skills trainings, LDL projects, breakthrough pilots, broad 
communications to include the MyVA Story of the Week that goes out 
every Friday to all employees, and local initiatives.
      VA established MyVA district offices to facilitate 
transformation efforts throughout VA and also now conducts quarterly 
surveys of the VA workforce and incorporates this feedback into VA's 
transformation actions.
      Secretary, Deputy Secretary, and Under Secretary for 
Health have provided role models for transparency, Veteran focus, and 
principles-based leadership.
      VHA programs and program offices and the Office Human 
Resources & Administration (HR&A) representatives have held regular 
meetings in the past year to discuss a single, benchmarked concept for 
organizational health and coordinate messaging.
      VHA's National Leadership Council has endorsed 
personalized, proactive, patient-driven health care as one of VHA's 
strategic goals and strongly supported the formation of organizational 
health councils.
      Many VHA facilities and networks have some version of an 
organizational health council already existing.
      All program offices and facilities receive employee 
survey data annually down to the workgroup level to facilitate action 
planning and improve employee engagement. Brief pulse surveys have 
recently been implemented to measure employee engagement at the 
facility level quarterly.
      VHA's National Center for Organizational Development has 
use of Prosci change management materials and is pursuing a system-wide 
license.

Recommendation #11: Leadership Succession

    ``Rebuild a system for leadership succession based on a benchmarked 
health care competency model that is consistently applied to 
recruitment, development, and advancement within the leadership 
pipeline.''

    VA finds this recommendation feasible and advisable and is already 
implementing changes as part of VA's MyVA transformation, with some 
modifications in approach.
    VA is consolidating leadership training behind a model we created 
as part of our MyVA transformation called ILEAD. Previously, VA had 
multiple leadership models across VA, which led to no common language 
or culture of leadership, and the models were not customized for VA. 
The enterprise-wide ILEAD modal will incorporate the principles of 
``servant leadership'' and VA's ICARE core values, aligned with the 
Federal Executive Core Qualifications. VHA and the VA Corporate Senior 
Executive Management Office are in the first stages of developing a 
competency model for VHA's senior leadership positions that will 
incorporate VA's ILEAD model with the technical competencies essential 
to successfully leading VHA's complex clinical operations. The VHA 
senior leader competency models will ultimately cascade down through 
the organization and be incorporated in its hiring, development, 
performance assessment, and advancement programs.
    VHA has outlined a leadership talent management strategy, 
benchmarked against the best practices in private industry, and begun 
initial development of processes and tools to give VHA greater insight 
and control over its health care leadership succession pipeline. 
Initial efforts are focused on creating a cadre of leaders to fill 
future medical center director positions. At the individual level, VHA 
senior executives serve as mentors to staff members, coaches for VHA 
leadership development programs, and models through their own 
leadership behavior.
    Current VHA initiatives serving the Commission's intent include:

      VHA made leadership development a priority of its MyVA 
effort, specifically to develop and retain passionate leaders to lead 
transformational efforts across the Administration.
      Filling key leadership position through a strong 
succession pipeline is identified as a priority for VHA in the 2016 VHA 
Workforce and Succession Strategic Plan.
      VHA has fully embraced the LDL philosophy-nearly 30,000 
VHA employees have participated in the leader-led cascaded training 
since it began in September 2015.
      VHA's National Leadership Council has adopted the VA 
leadership model, which now includes the concept of ``servant leader.''
      VHA leaders are integrally involved in the development 
and conduct of its formal leadership development programs. Leaders 
serve as coaches and mentors to program participants, in addition to 
personally facilitating sessions on a wide variety of leadership 
topics.
      VHA established the Healthcare Leadership Talent 
Institute (HLTI) to provide coordinated focus to VHA's talent 
management efforts. HLTI links VHA's workforce-planning and talent-
development programs through the design and deployment of a set of 
talent management products and processes, which are in the pilot-
testing phase.
      VHA is collaborating with the VA Corporate Senior 
Executive Management Office in implementing the December 2015 Executive 
Order on Strengthening the SES. These efforts include building a 
foundational leadership competency model for VA, instituting an 
executive rotation program to provide career-broadening experiences 
outside of each executive's current position, enhancing the SES 
performance management system, and outlining an SES-level talent-
management process for VA-wide implementation.

Recommendation #12: Organizational Structures and Management Processes

    ``Transform organizational structures and management processes to 
ensure adherence to national VHA standards, while also promoting 
decision making at the lowest level of the organization, eliminating 
waste and redundancy, promoting innovation, and fostering the spread of 
best practices.''

    VA finds this recommendation feasible and advisable but recommends 
an alternative approach to reorganizing the VHA Central Office (VHACO), 
consistent with VA's MyVA transformation.
    VHACO has undergone a stepwise ascent to improving the 
organizational structure to be more responsive to field requirements 
through the development of large programs responsible for 
organizational excellence and developing the future state health care 
plan. Immediate reorganization would divert attention from key 
organizational priorities such as improving access to health care. 
Known challenges associated with reorganization (which occurs with the 
regularity of each presidential election cycle), are impaired employee 
engagement, loss of institutional knowledge, and diversion of attention 
from critical challenges such as insuring Veterans have same-day access 
to primary care and mental health care services. Legislation would be 
required to streamline appropriations, and review by oversight bodies 
would be impacted by the changes described. Finally, the reorganization 
for VHACO should derive from and be integrated with the transformation 
of the overall VHA health care organization structure. VHA will 
initiate a VHACO and VISN organization analysis at the beginning of 
calendar year 2017.

Recommendation #13: Performance Measurement

    ``Streamline and focus organizational performance measurement in 
VHA using core metrics that are identical to those used in the private 
sector, and establish a personnel performance management system for 
health care leaders in VHA that is distinct from performance 
measurement, is based on the leadership competency model, assesses 
leadership ability, and measures the achievement of important 
organizational strategies.''

    VA finds this recommendation feasible and advisable and is already 
implementing changes as part of VA's MyVA transformation, with some 
modifications in approach.
    VHA is consolidating its health care operations metrics to provide 
a consistent, system-wide view of key performance indicators. In 
October 2015, VHA launched a Performance Accountability Work Group 
(PAWG) as a governance mechanism for performance measurement at all 
levels of the organization. The PAWG's first task was to conduct a 
systematic review of all existing performance measures (numbering over 
500), which resulted in a core set of approximately 20 key indicators, 
aligned to industry-wide approaches. SAIL scoring system is a critical 
component of these indicators, as well as predictive trigger systems 
that are the main inputs into a health operations center, which will 
facilitate centralized quality management.
    The leadership of the Office of Organizational Excellence 
(hereafter, 10E) has undertaken a strategic review across all current 
business processes to identify realignment opportunities-for instance, 
focusing ISO 9000 on its original target, which was the reprocessing of 
reusable medical equipment, and reinvesting the resources that will be 
freed up to enhance the ability of VERC to support the adoption of LEAN 
management approaches in support of the Under Secretary for Health's 
five priorities for strategic action.
    We have also engaged a senior industry consultant to assist us with 
the process of executive recruitment and development; created a system-
level VHA Performance Scorecard aligned along transformational 
priorities; simplified the template used for senior health care 
executive performance management plans; and started work to align 
business functions within the Office of Organizational Excellence to 
promote a unified approach to performance reporting, performance 
improvement, and the identification and spread of strong clinical and 
business practices.
    Finally, the Diffusion of Excellence initiative (see Recommendation 
#2) sources best practices from frontline employees in the field, and 
brings the combined resources of 10E to support their implementation 
where appropriate in under-performing VA sites.

Recommendation #14: Cultural and Military Competence

    ``Foster cultural and military competence among all Veterans Health 
Administration (VHA) Care System leadership, providers, and staff to 
embrace diversity, promote cultural sensitivity, and improve veteran 
health care outcomes.''

    VA finds this recommendation feasible and advisable and is already 
working to address the Commission's concern as part of VA's MyVA 
transformation.
    VA has implemented training related to cultural and military 
competence, in some cases by partnering with external stakeholders 
(i.e., Equal Employment Opportunity Commission, the Joint Commission, 
Commission on Accredited Rehabilitation Facilities, DoD) and numerous 
national diversity-focused affinity and advocacy organizations. 
Examples of this coordinated training include Military Culture Training 
for Community Providers, Cultural Competency, Generational Diversity, 
Introduction to Military Ethos, Military Organization and Roles, 
Professional Stressors & Resources and Treatment Resources & Tools. 
From April 1, 2015, to July 22, 2016, the last four courses were 
accessed 2,533, 1,527, 1,172, and 1,070 times respectively. VA will 
continually assess its cultural and military competence training 
portfolio for content, target audience, and training modalities to 
identify additional training needs.
    VA Office of Diversity and Inclusion has mandatory training in the 
area of cultural competence as part of its Equal Employment Opportunity 
(EEO), Diversity and Inclusion, and Conflict Management training for 
all VA managers and supervisors and mandatory annual EEO, Workplace 
Harassment, and No FEAR training for all VA employees. VA also 
maintains programs focusing on targeted populations, including a LGBT 
Awareness Program (issues referenced in the Report), Office of Women's 
Health Services; Office of Health Equity; and a Center for Minority 
Veterans.
    VHA also has a large portfolio of clinical training programs, 
including several in the area of cultural and military competence in 
health care delivery. The Office of Health Equity developed virtual 
patient cultural competency training under the Employee Education 
Service contract for the Virtual Medical Center project. Presently, 
military competence training is available to any provider, and they are 
encouraged to take the training. Providers currently under contract are 
not required to complete the course, but future contracts will require 
completion.

Recommendation #15: Alternative Personnel System

    ``Create a simple-to-administer alternative personnel system, in 
law and regulation, which governs all VHA employees, applies best 
practices from the private sector to human capital management, and 
supports pay and benefits that are competitive with the private 
sector.''

    VA finds this recommendation feasible and advisable and is already 
working as part of VA's MyVA transformation, with some modifications in 
approach
    VA supports the Commission's legislative proposal recommendation to 
establish a new alternative personnel system that applies to all VHA 
employees and falls under Title 38 authority, provided outside 
stakeholders support the legislative and policy changes required to 
create this new system.
    VA currently is preparing for consideration a legislative proposal 
for the FY 2018 budget process to modify 38 United States Code to give 
the Secretary the authority to establish a human-resources management 
system unique to VA.
    In the absence of a simple-to-administer alternative personnel 
system, VA has also proposed modifications to existing statutes to 
provide some relief to the currently complex personnel system and also 
help with recruitment and retention. These proposals include 
establishing an appointment and compensation system under Title 38 for 
VHA occupations of Medical Center Director, VISN Director, and other 
positions determined by the Secretary that have significant impact on 
the overall management of VA's health care system. VA is considering 
proposals to do the following:

      Eliminate Compensation Panels for physicians and 
dentists, which have been found to be administratively burdensome.
      Eliminate performance pay for physicians and dentists, 
which has been found to be extremely difficult to administer.
      Establish premium pay for physicians and dentists to 
allow flexibility in scheduling and eliminate the daily rate paid to 
these occupations based on 24/7 availability.
      Modify special rate limitation to increase the maximum 
allowable special rate supplement providing enhanced flexibility to pay 
competitively within local labor markets.
      Exempt VHA health care providers appointed to positions 
under 38 U.S.C. 7401 from the dual compensation restrictions for 
reemployed retired annuitants.

    The VHA Strategic Human Resource (HR) Advisory Committee and 
Workforce Management and Consulting's Human Resource Development group 
are proposing a comprehensive VHA HR Readiness Program designed to 
improve the overall operational capabilities of the VHA HR community. 
The program will identify and integrate all existing and available 
internal and external training resources into a clear, consistent, and 
logical roadmap to readiness.
    Under the MyVA program, the Staff Critical Positions Initiative was 
launched to improve hiring of key leadership and other critical 
positions throughout VHA. VHA is moving ahead with the ``Hire Right, 
Hire Fast'' initiative for MSAs. The initiative is being piloted at a 
number of facilities and will provide products and guidance in 2016, 
including additional screening for customer service tools, an interview 
scoring rubric, job posting templates, HR milestone scripts, and much 
more. These products are designed to increase the supply of MSAs, as 
well as emphasize the customer service principles and skills needed for 
success.
    VHA has embarked on a Rapid Process Improvement Workshop effort 
within the HR community to examine the hiring process and identify 
improvement opportunities, to include operational processes and 
policies. Plans are also under development to establish a centralized 
architecture to designate lines of authority in setting training 
requirements, career paths, etc.

Recommendation #16: Effective Human Capital Management

    ``Require VA and VHA executives to lead the transformation of HR, 
commit funds, and assign expert resources to achieve an effective human 
capital management system.''

    VA finds the Commission's recommendation both feasible and 
advisable and is already pursuing the following initiatives as part of 
VA's MyVA transformation.
    Hire Chief Talent Leader and Grant Authorities: VHA currently has a 
national search underway for its senior most HR executive position. 
Presently that role does not possess the authority recommended by the 
commission. It is anticipated that the HR&A transformation program, and 
the efforts associated with Recommendation 12 in conjunction with the 
Under Secretary for Health, would work together toward the optimal 
organization structure for HR across VA and within the administrations 
including appropriate authorities. This process will help clarify the 
ideal roles and responsibilities of the VHA Chief Talent Leader.
    Transform Human Capital Management: As part of MyVA, VA HR&A has 
launched the Critical Staffing Initiative to improve the hiring of key 
leadership and other critical positions throughout the VA. This effort 
has been working on near-term improvements to hiring medical center 
directors and other key medical center leaders. So far, this project 
has identified and is beginning to implement significant improvements 
to the hiring process and to proliferate hiring best practices across 
the organization. VA HR&A is currently planning a process to engage 
stakeholders across VA to identify next steps for implementing the 
recommendations outlined in recent study commissioned by VA. A concept 
paper entitled ``VISN HR Shared Service Excellence'' is also being 
evaluated. This concept paper incorporates a number of recommendations 
contained within the white paper noted above, but with specific 
emphasis on HR roles within the VISNs and VA Medical Centers. The 
Commission's recommendations will be taken into consideration in the 
process.
    Implement Best Practices: The VISN HR Shared Service Excellence 
paper is heavily weighted toward the sharing of best practices that 
have been developed in a few highly performing field HR organizations. 
Best practice sharing is also a significant component of the MyVA 
Critical Staffing initiative. Also, the HR&A transformation effort is 
intended to rely heavily on health care and other industry best 
practice models.
    Develop HR Information Technology Plan: The Commission's 
recommendation addresses an issue which VA's early HR transformation 
efforts are just beginning to address. While there are currently 
efforts planned and underway to implement HR Smart for personnel and 
payroll records, and USA Staffing to enable the recruiting process 
(acknowledged by the Commission), VA would benefit from casting these 
and other anticipated efforts in a more strategic IT plan. Such a plan 
would better enable implementation and integration prioritization and 
capital planning.

    Recommendation #17: Eligibility for Other-than-Honorable Service

    ``Provide a streamlined path to eligibility for health care for 
those with an other-than-honorable discharge who have substantial 
honorable service.''

    VA finds this recommendation neither feasible nor advisable.
    The Commission's own estimates indicate this change would cost $864 
million in FY 2019, increasing to $1.2 billion in FY 2033. This 
recommendation therefore appears to contemplate health care for anyone 
with another-than-honorable discharge. While VA agrees with the 
principle of serving this population of Veterans, the cost of doing so 
makes the recommendation not feasible at this time.
    Many Servicemembers with other-than-honorable discharges qualify 
for health care for service-connected conditions and other benefits 
under existing authorities. VA will continue to serve this population. 
VA is also drafting proposed regulations which will update and clarify 
38 C.F.R. Sec. Sec.  3.12 and 17.34 to improve processes and procedures 
relating to character of discharge determinations and expand tentative 
health care eligibility for certain former Servicemembers.
    These changes will address many of the concerns raised by the 
Commission. For example, the rules will provide improved guidance about 
the consideration of mitigating factors such as extended overseas 
deployments, mental health conditions, and other extenuating 
circumstances. Also, VBA has, within the past year, updated its manual 
to streamline its other-than-honorable adjudicative procedures to 
expedite health care eligibility determinations and improve the Veteran 
experience by shortening the wait time.

    Recommendation #18: Expert Advisory Body for Defining Eligibility 
and Benefits

    ``Establish an expert body to develop recommendations for VA care 
eligibility and benefits design.''

    VA finds this recommendation feasible and advisable.
    Substantial changes in the delivery of health care have occurred 
since Congress last comprehensively examined eligibility for VHA care 
through passage of Public Law 104-262, Veterans' Health Care 
Eligibility Reform Act of 1996, and taking a close look at eligibility 
criteria in light of current (and projected future) resources and 
demand makes sense in the context of VA's ongoing efforts to reshape 
the future of VA health care. VA will work with the President, 
Congress, Veterans Service Organizations, and other stakeholders to 
determine the path forward in the tasking of an expert body to examine 
and, as appropriate, develop recommendations for changes in eligibility 
for VA health care benefits.
    Recommendation 18 also includes a separate and distinct 
recommendation for VA to ``revise VA regulations to provide that 
service-connected-disabled Veterans be afforded priority access to 
care, subject only to a higher priority dictated by clinical care 
needs.'' While VA supports the objective, VA already has regulations 
(38 C.F.R. 17.49) and policy in place giving priority in scheduling to 
service-connected Veterans and believes these meet and fulfill the 
Commission's intent.

                                 
                  TEXT OF A LETTER FROM THE PRESIDENT
                            THE WHITE HOUSE
                     Office of the Press Secretary

    For Immediate Release              September 1, 2016

                  TEXT OF A LETTER FROM THE PRESIDENT
             TO THE SPEAKER OF THE HOUSE OF REPRESENTATIVES
                    AND THE PRESIDENT OF THE SENATE

                           September 1, 2016
    Dear Mr. Speaker: (Dear Mr. President:)

    My Administration is committed to the ongoing transformation of the 
Department of Veterans Affairs (VA) and I strongly support many of the 
recommendations and the underlying objectives offered by the Commission 
on Care (Commission) in its final report transmitted on July 6, 2016. 
These recommendations underscore the fundamental challenges that face 
the VA health care system, and the reforms needed to provide America's 
veterans with the high quality health care they need and deserve--both 
now and in the future. We have made great strides in delivering 
improved care to our veterans over the past 8 years, and we will 
continue to work tirelessly to uphold the solemn responsibility to 
ensure all our veterans are getting the care and benefits they have 
earned.
    I concur with 15 of the 18 Commission recommendations, many of 
which are already being implemented as part of the ongoing MyVA 
transformation that the Secretary of Veterans Affairs (Secretary) has 
put in place. These include areas such as enhancing clinical 
operations, establishing a more consistent policy for appealing 
clinical decisions, eliminating disparities in how health care is 
delivered to veterans from different backgrounds, modernizing IT 
systems, and establishing new processes for leadership development and 
performance management. These reforms are steps in the right direction 
and will help put VA on a trajectory to ensure veterans continue to 
receive timely and high quality care, while strengthening the VA health 
care system that millions of veterans depend on every day. I appreciate 
and applaud the Commission for their work.
    Of particular note, I strongly support the Commission's principle 
that creating a high-performing, integrated health care system that 
encompasses both VA and private care is critical to serving the needs 
of veterans. In fact, my Administration outlined its approach to 
achieve this same goal in VA's Plan to Consolidate Community Care, 
submitted to the Congress in October 2015. While this approach must be 
implemented in a fiscally sustainable way, it builds on more than a 
decade of work with veterans, health care providers, and community 
partners, to streamline and enhance VA's capability to deliver services 
essential to veterans' health. VA's plan also recognizes the importance 
of strengthening VA's partnerships with other Federal health care 
providers, including the Department of Defense and Indian Health 
Service, as well as tribal health programs, academic teaching 
affiliates, and Federally Qualified Health Centers.
    At the same time, it is critical that we preserve and continue to 
improve the VA health care system and ensure that VA has the ability to 
serve veterans. Research shows that in many areas, such as mental 
health, VA delivers care that is often better than that delivered in 
the private sector. VA also provides unique, highly specialized care 
for many medical conditions, such as spinal cord and traumatic brain 
injuries, which are simply not available to the same extent outside of 
VA. In addition, VA provides a comprehensive approach to wellness that 
includes the treatment of physical injuries and mental health. This 
multidisciplinary approach allows providers to address the full 
spectrum of veteran needs beyond medical care, including other VA 
benefits and services.
    For these reasons, I concur with the Commission's vision for 
creating integrated care networks that more tightly coordinate VA and 
non-VA care, but urge the Congress to act on this recommendation by 
enacting VA's Plan to Consolidate Community Care. The alternative 
approach outlined in VA's plan would achieve the goals of the 
Commission to create a veteran-centric approach to care that 
appropriately balances issues of access, quality, and cost-
effectiveness. It would more clearly ensure the long-term viability and 
sustainability of the VA health care system, preserve VA's role as the 
primary coordinator of care for veterans, and safeguard its ability to 
carry out its other research, education, and emergency preparedness 
missions that are critical to our Nation's well-being. And it would 
ensure that veterans have access to the care they need--whether at the 
VA or out in the community--without forcing untenable resource 
tradeoffs that would limit the ability of VA to carry out other parts 
of its mission on behalf of veterans.
    We must also ensure that VA has the ability to operate this 
integrated health care system in a rational, efficient, and dynamic way 
that best serves the interests of both veterans and taxpayers. For that 
reason, I have concerns with the Commission's proposed governance 
structure for the VA health care system. The proposal would undermine 
the authority of the Secretary and the Under Secretary for Health, 
weaken the integration of the VA health care system with the other 
services and programs provided by the VA, and make it harder--not 
easier--for VA to implement transformative change. Moreover, the 
Department of Justice has advised that the proposed recommendation 
would violate the Appointments Clause of the Constitution. I do, 
however, support portions of the recommendation that would establish a 
term appointment for the Under Secretary for Health, to ensure that 
position is removed from the turmoil and turnover of the political 
cycle.
    For those recommendations I agree with and whose objectives are not 
yet achieved, I am directing the VA to develop plans to complete their 
implementation. Additionally, in recognition of the role of the MyVA 
initiative in transforming the VA as military service evolves, I have 
directed the Secretary of Veterans Affairs to incorporate the 
principles of the MyVA initiative into VA strategic planning, 
leadership training, and performance monitoring. In those areas where 
legislation is required, my Administration will work closely with the 
Secretary to transmit to the Congress the relevant legislative 
proposals, which I recommend be enacted without delay.
    Improving veterans' health care remains a critical issue of 
national importance, and my Administration will work with veterans and 
military families, the Congress, Veterans Service Organizations, and 
other stakeholders to ensure all our veterans are getting the care and 
benefits they need when they need them.

    Sincerely,

    BARACK OBAMA

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