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








A CALL FOR SYSTEM-WIDE CHANGE: EVALUATING THE INDEPENDENT ASSESSMENT OF 
                   THE VETERANS HEALTH ADMINISTRATION

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

                                HEARING

                               before the

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

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                       WEDNESDAY, OCTOBER 7, 2015

                               __________

                           Serial No. 114-37

                               __________

       Printed for the use of the Committee on Veterans' Affairs



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                     COMMITTEE ON VETERANS' AFFAIRS

                     JEFF MILLER, Florida, Chairman

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

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, October 7, 2015

                                                                   Page

A Call for System-Wide Change: Evaluating the Independent 
  Assessment of the Veterans Health Administration...............     1

                           OPENING STATEMENTS

Jeff Miller, Chairman............................................     1
Corrine Brown, Ranking Member....................................     3
    Prepared Statement...........................................    44
Hon. Phil Roe
    Prepared Statement...........................................    44

                               WITNESSES

Hon. Robert A. McDonald, Secretary, U.S. Department of Veterans 
  Affairs........................................................     4
    Prepared Statement...........................................    46

        Accompanied by:

    Hon. David J. Shulkin M.D., Under Secretary for Health, U.S. 
        Department of Veterans Affairs

Richard J. Byrne, Senior Vice President, The MITRE Corporation...     7
    Prepared Statement...........................................    55
Brett P. Giroir M.D., Senior Fellow, Texas Medical Center Health 
  Policy Institute...............................................     8
    Prepared Statement...........................................    67

                             FOR THE RECORD

American Federation of Government Employees, AFL-CIO.............    74
Reserve Officers Association.....................................    78
 
A CALL FOR SYSTEM-WIDE CHANGE: EVALUATING THE INDEPENDENT ASSESSMENT OF 
                   THE VETERANS HEALTH ADMINISTRATION

                              ----------                              


                       Wednesday, October 7, 2015

             U.S. House of Representatives,
                    Committee on Veterans' Affairs,
                                                   Washington, D.C.
    The committee met, pursuant to notice, at 10:00 a.m., in 
Room 334, Cannon House Office Building, Hon. Jeff Miller 
[chairman of the committee] presiding.
    Present:  Representatives Miller, Lamborn, Bilirakis, Roe, 
Benishek, Huelskamp, Coffman, Wenstrup, Abraham, Costello, 
Radewagen, Bost, Brown, Takano, Brownley, Titus, Kuster, 
O'Rourke, Rice, Walz, and McNerney.

           OPENING STATEMENT OF CHAIRMAN JEFF MILLER

    The Chairman. The committee will come to order.
    If we get somebody to close the door. Thank you, Bob.
    Thanks, everybody, for joining us for today's oversight 
hearing called A Call for System-Wide Change: Evaluating the 
Independent Assessment of the Veterans Health Administration.
    This morning, we are going to discuss the findings and 
recommendations of the independent assessment of VA's 
healthcare delivery system and management processes. The 
assessment was required last summer by the Veterans Access, 
Choice and Accountability Act and was intended to develop a 
path forward for the VA healthcare system that was then and 
still does continue to have difficulties.
    The secretary's prepared remarks for this morning's hearing 
call the assessment a valuable instrument for validating the 
areas that require attention. And in presentation two weeks ago 
before the Commission on Care, Dr. Shulkin, the Under Secretary 
for Health, called the assessment an excellent tool.
    But I see the assessment as much more than that. It is more 
than an instrument and it is more than a tool. The assessment 
encompassed a review of virtually every aspect of VA healthcare 
and over the course of more than 4,000 pages, it described in 
painful detail the numerous, significant and systemic flaws 
that challenged the healthcare system that is tasked with 
providing high-quality healthcare to our veterans.
    The assessment then thoughtfully lays out what steps need 
to be taken to transform the broken VA healthcare system into 
one that our Nation's veterans can truly be proud of. Perhaps 
most alarming are the assessment's finding regarding 
leadership.
    For example, the assessment found that VA healthcare 
facilities are plagued by an ever-growing but ineffective 
bureaucracy that has ballooned by 160 percent over the last 
five years without resulting in any discernible improvement in 
business or health outcomes.
    That could be because the assessment also found that VA 
suffers from an expanding scope of activities that has led to 
confusion about strategic direction and leadership priorities. 
It has an unnecessarily complex and fragmented organization 
structure characterized by a culture that is risk averse and 
distrustful and is run by a workforce that is steadily losing 
its motivation, consumed by addressing crisis after crisis and 
lacks a leadership pipeline that is failing to attract and 
train the next generation of healthcare leaders.
    Sadly these findings are not new to those of us who have 
been working on these issues. In fact, many of them are things 
that those around this dais have been discussing in this 
hearing room for many years.
    However, they are startling and they are deserving of both 
our immediate attention and our prolonged commitment to a 
sustained change, a change that will come from nothing short of 
a top-to-bottom transformation and a willingness to have 
difficult conversations about VA's true mission and should be 
in support of our Nation's veterans.
    Unfortunately, rather than detailing VA's plan for 
systematically implementing the recommendation of the 
assessment and deviating from the status quo that is harming 
our veterans, the testimony that we will be hearing today 
repeats a lot of the same talking points that we have heard in 
the past.
    For nine pages, VA provides little in any way of concrete 
details about what, if any, specific actions VA is taking as a 
result of the assessment and how we as a committee can assist 
the VA in its efforts.
    But VA does take time in their testimony to repeat 
misleading talking points from May regarding House passed 
fiscal year 2016 budget equating it to a VA medical care budget 
cut and claiming it would result in 70,000 fewer veterans 
receiving care.
    Both of those allegations are untrue as the Washington Post 
fact checker pointed out earlier this year. In fact, the VA 
budget that the House has proposed represents an increase in 
VA's discretionary budget and would continue the trend of 
budget increases that have led to a more than 70 percent 
increase in the bottom line over the last six years.
    I appreciate the secretary being here today taking time out 
of his schedule, but we both can agree that we each can do 
better and make more out of the assessment that is before me 
today if we avoid retorting to disingenuous talking points and 
instead focus on the hard work that lies before both of us.
    Our veterans cannot afford to let this assessment become 
just number 138 gathering dust on some shelf locked away where 
nobody else will see it again.
    And before I yield to the ranking member, I would like to 
take a moment to thank the MITRE Corporation, the RAND 
Corporation, the Institute of Medicine, McKinsey & Company and 
Grant Thornton for their efforts in completing this assessment.
    I am also grateful for the efforts of the members of the 
Blue Ribbon Panel who selflessly lent their expertise as well. 
Thank you all for your hard work. I guarantee that our hearing 
today is just the start of this committee's work regarding the 
many thoughtful findings and recommendations that this group 
has laid out for us.

       OPENING STATEMENT OF RANKING MEMBER CORRINE BROWN

    And I recognize the Ranking Member, Ms. Brown, for her 
opening statement.
    Ms. Brown. Thank you, Mr. Chairman.
    Before I begin my statement, Mr. John E. Arnold is here. He 
is a Vietnam veteran and he came all the way from Jacksonville. 
I would like for him to stand because this hearing is all about 
veterans.
    Sir, would you just stand? Thank you for your service. 
Thank you.
    Last year in the Veterans Access, Choice and Accountability 
Act of 2014, we mandated that there be an Independent 
Assessment of Veterans' Healthcare. This morning's hearing is 
on the results of that Independent Assessment.
    The Assessment highlights many of the things we hear from 
our veterans. We hear that the VA provides excellent 
healthcare, especially healthcare related to the special needs 
of the veterans. We also hear that in certain areas, VA is the 
forefront of healthcare in this country.
    We also hear from our veterans that VA care is often 
fragmented and that it can be difficult to navigate and arrange 
non-VA care. We hear of long waiting times and limited access.
    For us on this Committee, the results of this Assessment 
are not new. Over the years, and for me, it's 23, we have seen 
a system become mired in bureaucracy and be required to do more 
when sometimes the resources to do more have not been made 
available.
    What the Independent Assessment provides us is a detailed, 
thorough and fair look at where the Veterans Healthcare 
Administration is and the steps that we must all take to get it 
back on the right track and focused on veterans.
    What is clear is that if we are to meet our promise to our 
veterans, we must begin to look at reform. This reform must 
enable VA to focus on healthcare and operate, like the 
Secretary has previously stated, as a business. And the 
business of the Veterans Health Administration must be a clear 
and unwavering focus on the veteran patient.
    The Independent Assessment points out that piecemeal fixes 
and legislation targeted at only one issue will not cut it. VHA 
needs a complete overhaul from the way it schedules and 
delivers care to patients, to the way it treats its employees 
and I want to point out, the way it partners with community 
providers.
    It is approaching two decades since VHA last underwent a 
major reform effort. We must now begin the work of ensuring 
that VA healthcare is poised to meet the challenges of 
healthcare today, and the Independent Assessment will help us 
in that endeavor.
    I look forward to hearing from the Secretary as to what 
steps he has taken to begin the reform process, and to hear 
from our other witnesses on to how we can work together to 
ensure that healthcare for our veterans receive is the very 
best.
    Thank you, Mr. Chairman, and I yield back the balance of my 
time.

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

    The Chairman. Thank you very much, Ms. Brown.
    We are joined this morning by the Honorable Robert 
McDonald, Secretary of the Department of Veterans Affairs, 
better known to many people as Bob. Secretary McDonald is 
accompanied by the Honorable David Shulkin. He's the Under 
Secretary for Health.
    Dr. Shulkin, thank you for being here, too.
    We are joined by Richard Byrne, Senior Vice President of 
the MITRE Corporation, the independent assessment program 
integrator, and by Dr. Giroir who is Senior Fellow of the Texas 
Medical Center Health Policy Institute and the chairperson of 
the independent assessment Blue Ribbon Panel.
    Mr. Secretary, we appreciate you being here. Two things 
before we begin. Thank you for allowing us to compress into a 
single panel instead of doing two panels today and, secondly, 
your staff had asked for a ten-minute opening statement. But 
because of time and many of the questions that members have 
today, I have asked that you restrict your comments to five 
minutes so that we can ask the questions. All members can avail 
themselves to the secretary's written comments that are in the 
binder before you.
    So, Mr. Secretary, you are recognized for five minutes.

STATEMENTS OF ROBERT A. MCDONALD, SECRETARY, U.S. DEPARTMENT OF 
 VETERANS AFFAIRS, ACCOMPANIED BY DAVID J. SHULKIN M.D., UNDER 
  SECRETARY FOR HEALTH, U.S. DEPARTMENT OF VETERANS AFFAIRS; 
RICHARD J. BYRNE, SENIOR VICE PRESIDENT, THE MITRE CORPORATION; 
   BRETT P. GIROIR M.D., SENIOR FELLOW, TEXAS MEDICAL CENTER 
                    HEALTH POLICY INSTITUTE

                STATEMENT OF ROBERT A. MCDONALD

    Secretary McDonald. Chairman Miller, Ranking Member Brown, 
members of the committee, I am pleased to be here with Dr. 
David Shulkin, Under Secretary for Health, to talk about the 
independent assessment and all that VA is doing to improve the 
veterans' experience at VA.
    I think this is the most important hearing that we have had 
since I have been secretary because it is the first hearing 
that we have had on the transformation of VA.
    For the most part, the assessment which, as you know, 
started over a year ago confirms our own analysis and I am 
pleased to say we have already started taking action. The 
assessment had a great deal of information on known problems, 
but also had some new ideas that we are incorporating into the 
transformation we are doing.
    One aspect of the assessment's findings and recommendations 
deserves special emphasis and that is the misalignment of 
requirements and resources. We know now that the access crisis 
of 2014 was mostly a matter of growing demand for VA healthcare 
overwhelming our capacity for supply.
    For example, we have a requirement that all disability 
claims should be adjudicated in under 125 days and we have made 
outstanding progress in meeting that requirement. We have cut 
the backlog of those claims from 611,000 in May of 2013 to less 
than 75,000 today, but we have done that by having our workers, 
our VBA workers work mandatory overtime for over four years.
    We have incrementally put more people in the budget each 
year that had been stripped out. We obviously need more people 
if we are going to be able to get these claims down to zero. So 
this is a classic case of where the 125-day requirement and the 
budget that we have been given don't match and we can't have 
people working overtime forever.
    I take issue with one of the assessment's recommendations 
and that one is that Congress establish a governance board to, 
and I quote, ``develop fundamental policy, define the strategic 
path, insulate VHA leadership from direct political interaction 
and ensure accountability for the achievement of established 
performance measures.''
    I believe this is the role of this committee and the Senate 
Veterans' Affairs Committee working collaboratively with the 
department and me. We have proven that VA can make changes 
needed to provide veterans with the care and benefits they 
deserve. All we need to do is have your support and work 
together to do so.
    At the enterprise level, my VA transformation is well 
underway providing both short-term and long-term support for 
effective responses to many of the assessment's 
recommendations.
    As you know, we have five strategies. First is improving 
the veteran experience. Second is improving the employee 
experience. Third is achieving support service excellence. 
Fourth is establishing a culture of continuous improvement and 
fifth is enhancing strategic partnerships. And we would be 
happy to drill down on those during the question period.
    We are also implementing VHA's blueprint for excellence 
detailing how VHA will evolve as a model healthcare provider. 
It is designed to improve access to healthcare, create a 
personalized experience for each veteran and bring VHA's 
performance measures and reporting requirements in line with 
those in use throughout the healthcare industry.
    In the past year, we have moved out aggressively in 
response to the access crisis meeting increasing demand and 
expanding capacity on four fronts, more staffing, more space, 
more productivity and more VA care in the community.
    During that period of time, we have completed seven million 
more appointments for veterans of completed care, four and a 
half million in the community, two and a half million within 
VA. We have added more space. We have added more providers. We 
have added more extra hours, all in effect to get more veterans 
in.
    But because of that and because we have done a better job 
of caring for veterans, we have more veterans desiring care. So 
even though 97 percent of appointments are now completed within 
30 days of the needed or preferred date, the number not 
completed in 30 days has grown from 300,000 to nearly 500,000.
    This brings us back to the fundamental problem, the 
imbalance of supply and demand and the need of congressional 
action. So let me get to what we need.
    The House proposed $1.4 billion reduction of the VA's 
budget request would mean $688 million less for veterans' 
medical care and a 50 percent cut in VA's construction budget. 
A 50 percent cut in the construction budget at a time that our 
facilities, 60 percent of our facilities are over 50 years old 
doesn't make any sense.
    Second, we need Congress to give us the flexibility to 
align resources with veterans' demand for care as the 
independent assessment suggested.
    Third, we need Congress to act on the proposal we submitted 
May 1st and the uncertainty about aspects of purchased care 
that are outside the Veterans Choice Program and that 
complicate provider participation and VA's other care in the 
community programs.
    Finally, we need Congress to address the many statutory 
issues that burden VA with red tape and bureaucracy. This is a 
problem almost everywhere in VA. We simply can't make many 
necessary changes because of statutory limitations.
    We need to consolidate our various care in the community 
programs. We need a freer hand to hire, assign and reward the 
executives we task to act as change agents. We need a freer 
hand in disposing of outdated, unused or little used 
facilities. We need a freer hand in the management of existing 
facilities so facilities' managers can adjust their use of 
resources to the changing needs of veterans.
    Bottom line, we at the VA are working hard to do our part. 
We have moved out smartly to aggressively tackle issues within 
our control. We have also demonstrated tremendous readiness and 
ability to effect fundamental organizational change.
    My VA is already making a difference in the veterans' 
experience of VA. Maybe some day we could hold a hearing on the 
My VA transformation. I would welcome that. But we can't 
continue making progress without reconciling requirements and 
resources and we can't reconcile requirements and resources on 
our own. We need your help to do that.
    Veterans and the American people expect us to work together 
on their behalf and we look forward to doing so.

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

    The Chairman. Thank you very much, Mr. Secretary.
    We intend to work with you and we will look at some of 
those issues that you have just raised. And I have got a couple 
questions I am going to ask you in just a few minutes as well 
in reference to legislative solutions and suggestions.
    Mr. Byrne, you are recognized for your testimony for five 
minutes.

                 STATEMENT OF RICHARD J. BYRNE

    Mr. Byrne. Chairman Miller, Ranking Member Brown and 
distinguished members of the committee, thank you for the 
opportunity to appear before you today.
    My name is Rich Byrne and I represent the MITRE Corporation 
and our partners as the senior executive responsible for 
conducting the independent assessment as required by Section 
201 of the Veterans Access, Choice and Accountability Act of 
2014.
    Now, before I get into the details, I would like to 
acknowledge the many, many individuals, men and women 
throughout VA who are deeply committed to the welfare of our 
Nation's veterans and who unselfishly supported the assessment 
in every way they could.
    We saw no hesitation for them to help us in any way. It was 
a privilege for every one of the team members to work on the 
assessment of this historic organization and on the Nation's 
most complex healthcare system.
    Our assessment was conducted in partnership with the RAND 
Corporation, McKinsey & Company and Grant Thornton and 
supported by an independent Blue Ribbon Panel composed of 16 
top healthcare experts who reviewed our work to ensure that it 
incorporated the very best practices of the private sector.
    The assessment team visited 87 facilities, analyzed over 
19,000 documents and data sets and reviewed 137 previous 
assessments and conducted over a thousand VA interviews. We 
spoke with ten veteran service organizations and 27 U.S. 
healthcare organizations.
    Our assessment presents a broad, independent and evidence-
based set of findings and recommendations. While overall VHA 
quality of care was comparable to private sector and had 
pockets of excellence, we found large variations in performance 
that resulted in too many unacceptable veteran experiences.
    This lack of consistency we believe was due to four 
pervasive, systemic issues. Under governance, there was a 
disconnect in the alignment of demand, resources and 
authorities.
    Under operations, there were uneven bureaucratic processes 
that were too often provider-centric, not patient-centric. And 
under data and tools, there were too many variations of non-
standardized data and non-interoperable tools.
    And, finally, under leadership, leaders were not fully 
empowered due to a lack of clear authority, confusing 
priorities and a culture of distrust.
    In reviewing the past 137 assessments of VHA, we found a 
number of findings that persisted year after year despite 
heroic efforts to resolve them. We concluded that these 
individual findings addressed individually did not then and 
will not now, result in sustainable or scalable solutions.
    It is our belief that the only way to successfully 
transform VHA in an enduring manner is to address all of these 
systemic issues using an integrated systems approach. A systems 
approach would simultaneously build on improvements in all four 
of these four systemic areas in an integrated and consistent 
manner independent of which finding we are going to address.
    Each solution would then build upon the previous solutions 
to increasingly improve the underlying root causes of the 
system that allows these anomalies and variations to happen. 
This will result in a sustainable and scalable solution.
    Taking the whole system perspective also supports reframing 
problems within a larger context which in turn can lead to 
radically different, even transformational solutions with the 
potential to provide much greater value than simply improving 
the status quo.
    For example, if a hospital's construction is overrunning, 
in addition to looking at funding increases, it is critical to 
assess the four systemic cornerstones. Let's take an example of 
that. On the data, using accurate data, what is the veteran 
demographic demand for that hospital in that local area? 
Applying appropriate governance for purchased care options for 
the private sector, do we have to build the entire hospital for 
that demand or is there excess capacity in the private sector?
    To streamline operations, what are the national 
productivity standards that should be targeted? And from 
leadership, how will healthcare be delivered in the future to 
incorporate trends like telehealth?
    Taken all together, these four cornerstones make you look 
at the problem of funding a specific facility in a bigger 
light. What is the future hospital that VA needs to build, not 
the one of the past?
    Together these four system perspectives is what we believe 
to be the secret to having enduring, scalable, sustainable 
solutions.
    Now, as one private sector doctor said, VHA is strong in 
anatomy but weak on physiology. So what that means is it is 
clear that VHA has all the parts necessary to be a world-class 
provider.
    However, for all these parts to work smoothly together, it 
will take a significant transformation to build the 
collaboration inside and outside of VHA, to create patient-
centered operations led by empowered leaders who are informed 
by the right data and tools with the appropriate governance and 
resources to deliver our Nation's promise to our veterans.
    Thank you very much.

    [The statement of Richard J. Byrne appears in the Appendix]

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

                  STATEMENT OF BRETT P. GIROIR

    Dr. Giroir. Chairman Miller, Ranking Member Brown, members 
of the committee, thank you for the opportunity to be here 
today.
    My name is Dr. Brett Giroir and I am honored to serve as 
chair of the independent Blue Ribbon Panel created by MITRE to 
provide support, oversight and guidance for this independent 
assessment.
    The Blue Ribbon Panel was composed of 16 distinguished and 
outspoken independent experts whose names and biographies are 
listed in the integrated report. But briefly the panel included 
the former CEOs of Kaiser Permanente, Geisinger, Healthcare 
Partners and the California Healthcare Foundation, the former 
executive VP of United Health, the physician and chief of Mass 
General Hospital, the former surgeon general of the Army and 
vice chief of the Army, the world's leading academic experts in 
organization change and health innovation, the CEOs of the 
National Quality Forum and the Texas Medical Center, the dean 
of the Jefferson College of Nursing, a board member of the 
National Patient Centered Outcomes Research Institute and a 
former director of Medicare and Medicaid services.
    Each Blue Ribbon Panel more importantly shared a deep 
commitment to our veterans and nearly all had direct personal 
or family experiences with the VHA. Ultimately the panel 
members unanimously endorsed the integrated report and its 
findings and recommendations.
    The report contains numerous near-term operational 
recommendations, few of which were unexpected by anyone in this 
room. For example, enhanced physician productivity, a key 
element of enhancing access will require more exam rooms, 
increase clinical support staff, improved patient scheduling 
and greater authority granted to clinic directors for overall 
resourcing.
    But more importantly, the report also offers 
recommendations to solve deeper root-cause issues that have 
persistently plagued the VHA and have prevented the successful 
implementation of reforms that were already suggested by the 
137 previous VHA assessments.
    As Mr. Byrne has already testified, these root-cause issues 
are the basis for four overarching recommendations in the area 
of governance, leadership, operations and data and tools.
    Indeed, even the example I just gave of improving physician 
productivity appears straightforward, but would require reform 
of unnecessarily bureaucratic clinical staff hiring processes 
which take three times as long as the private sector, 
empowerment of VA medical center leadership to flex resources 
to meet dynamic patient access needs, commitment to a modern 
electronic scheduling system that transparently indicates 
appointment availability to both schedulers and patients alike 
and overhaul of the facilities' construction leasing processes 
that now cost twice as much as the private sector but proceed 
at a pace that is two to three-fold slower.
    I would also emphasize that one of the most urgent 
strategic priorities is to establish and clearly communicate 
the future mission of the VHA and for Congress to align 
resources and authorities to achieve that specific mission.
    As background, in 2014, 9.1 million of 21.6 million U.S. 
veterans were enrolled in the VHA. Of these, 5.8 million were 
actually patients and on average, these patients rely on the 
VHA for much less than 50 percent of their healthcare services.
    These demographic data combined with access challenges 
suggest reconsideration of whether the VHA should aim to be the 
comprehensive provider for all veterans' health needs or 
whether the VHA should evolve into more focused centers 
providing specialized care while utilizing non-VHA providers 
for the majority of veterans' healthcare needs.
    Either paradigm could be highly beneficial to veterans as 
long as the demand and resources are prospectively aligned and 
there is a consolidation of current programs to simplify access 
to non-VHA providers.
    I also want to emphasize that although the report clearly 
outlines significant and long-standing problems, there are 
shining examples of emerging best practices at the VHA regional 
level that have improved access and quality and begun to change 
the overall organizational culture.
    Finally on behalf of the panel, I would also like to 
express our appreciation to the hundreds of experts who 
contributed to this report and to the literally thousands of 
contributing veterans and VHA employees who believed that this 
report would become a road map to achieve the highest quality 
of care for veterans.
    I would also like to express our gratitude to this 
congressional committee for your support of veterans and our 
panel and for the opportunity to answer any questions related 
to our assessments and recommendations.
    Thank you.

    [The prepared statement of Brett P. Giroir appears in the 
Appendix]

    The Chairman. Thank you very much, Dr. Giroir.
    I would like to begin the questioning with you on a point 
that you just brought up in both your written and your spoken 
testimony about the demographic data that the assessment 
collected. And I think that is a question that has been raised 
in this hearing room many times over the last year and a half.
    So I would ask you given the choice of the two paradigms 
that you have discussed, one of which where VA aims to be a 
comprehensive provider of care for veteran service-connected 
and nonservice-connected care needs or one in which VA 
functions as a coordinator of care focused primarily on being a 
center of excellence for specialized care, which do you think 
that VA should pursue and why do you think the way you do?
    Dr. Giroir. Okay. Well, this certainly is one of the key 
questions. The Blue Ribbon Panel clearly made a recommendation 
that veterans' healthcare within each region needs to be 
evaluated by assessing both the VHA capabilities and the non-
VHA capabilities and that is clearly trending.
    The use of non-VHA providers both when care is unavailable 
or when it is more readily available is something that needs to 
continue and probably needs to expand.
    The Blue Ribbon Panel did not make an assessment of those 
two alternatives in the extreme, but clearly focuses on the 
ability to expand integration with the private sector because 
the VHA is no longer a siloed institution. It is part of an 
integrated healthcare network.
    And the veterans are telling you that with their voting. 
They are voting with their feet. Less than 50 percent of their 
healthcare even among VHA patients are received from the VHA 
and as little as 15 percent of their outpatient appointments 
come from the VHA. So they are telling you that an integrated 
approach with the commercial sector is desirable and 
beneficial.
    The Chairman. Dr. Shulkin, could you comment just a little 
bit? I know it is at odds with the VA's approach, but do you 
differ from Dr. Giroir's assessment in regards to people voting 
with their feet?
    Dr. Shulkin. Thank you, Mr. Chairman.
    I don't think that this differs from the VA approach. The 
VA approach is to find the very best care that serves the 
veterans. And I think that we have shown that in response to 
our access crisis that we have encouraged the use of community 
care to address our access issues.
    I think the difference here between maybe what--I would 
expand on what Dr. Giroir said is that the care that VA 
provides is very, very different than the care that the private 
sector provides. The VA provides a much more comprehensive 
approach than just dealing with physical illness issues. It 
provides psychological and social aspects of care that actually 
meet the needs of what veterans require.
    And that is why I think that we really do need to do what 
Dr. Giroir said which is to see what VHA provides best for our 
veterans and what care can be provided by the private sector. 
And it is that hybrid type system that is going to meet our 
veterans' needs.
    The Chairman. So, Mr. Secretary, when you talk about the 
House-passed budget being a cut effectively taking away 
healthcare from 70 plus thousand veterans, is that not what we 
tried to solve back last year with the Choice Program where we 
gave billions of dollars to provide--if you couldn't provide it 
inside the VA, you could provide it outside? So something 
doesn't match with the continued statement that the House 
passed budget is a cut that will harm veterans' healthcare.
    Secretary McDonald. Mr. Chairman, as Dr. Shulkin said, we 
are in favor of a hybrid system that takes advantage of all of 
our partners. Even before the Choice Act, we had many veterans 
who were going to our medical school affiliates, who were going 
to the Alaska Native Health System, who were going to the 
Indian Health System, who were going to joint DoD/VA 
facilities. We are totally in favor of that.
    Right now in Fort Benning, for example, in Columbus, 
Georgia, we have got veterans going to Martin Army Hospital for 
18 specialties that the VA doesn't provide. We are totally in 
favor of that. But here is the issue. As Dr. Giroir mentioned, 
veterans today we estimate use the VA for only 34 percent of 
their healthcare. Every percentage point that they decide to 
use the VA more, that means we need an increase in budget of 
$1.4 billion.
    The federal budgeting process is not dynamic enough to take 
advantage of that. And what we have got is veterans coming to 
VA because the care is better. In fact, a recent VFW study 
showed that 82 percent of veterans prefer the VA and showed 
that 87 percent of veterans recommend the VA.
    So as that 34 percent gets higher, we have got to have the 
money to care for those veterans. When we put together the 
budget for 2016, we put together a budget that we thought would 
meet demand if we got the total budget amount and, as you 
recall, if we got budget flexibility to move money from one of 
the 70 line items to the other, that we don't have that 
flexibility today.
    So this wasn't a question of trying to put money in coffers 
or in a bank. This is the demand that we see. And if we don't 
get that money, we won't be able to meet the demand at the 
requirements that we have.
    Importantly in my statement, I said if we want to work 
together to change the requirements, for example, 30 days 
appointments, maybe it doesn't need to be within 30 days, 
that's fine, but we have got to match requirements and budget 
at the same time.
    The Chairman. Well, I would remind you that the 14 day and 
the 30 day were dates that VA set, not us. So----
    Secretary McDonald. As you know, we have eliminated the 14 
days.
    The Chairman. I know. You know, if you need to change for 
budgetary reasons, I would understand that. You are also 
talking about increasing and requiring $1.4 or 5 billion. That 
number could also decrease as well.
    And I would tell the members here that the cut to the 
President's request, quote, ``is less than what we added to 
finish the Denver project.''
    And with that, Ms. Brown, you are recognized.
    Secretary McDonald. Mr. Chairman, remember the cut also 
included a reduction in construction by 50 percent at a time 
when 60 percent of our buildings are over 50 years old.
    The Chairman. Ms. Brown.
    Ms. Brown. Thank you.
    Mr. Chairman, I am going to yield most of my time to the 
Secretary. I want to thank the panelists that did the 
Assessment. I think there's an elephant in the room. There are 
people out there that would actually want to completely close 
the VA and privatize the entire VA system which is totally 
unacceptable and it is absolutely not what the veterans want.
    And as you begin, I want you to discuss flexibility, and 
let people know how many people VA actually serves every day 
throughout this country.
    Secretary McDonald. Thank you, Ranking Member Brown.
    As I was going through my confirmation process, I often got 
the question from senators, you know, from some senators, a 
small group, why don't we get rid of the VA and just give out 
vouchers?
    So I studied that. As a businessperson, I wanted to know. 
And what I discovered was VA is not only essential for 
veterans, it is essential for American medicine and it is 
essential for the American people.
    Three-legged stool. Research, we spend $1.8 billion a year 
on research. We invented the nicotine patch. We were the ones 
who discovered that aspirin was important for heart disease, 
take an aspirin every day, first liver transplant, first 
implantable pacemaker. Last year, two VA doctors invented a 
shingles vaccine. I could go on.
    That research is important for the American people. And I 
didn't even mention posttraumatic stress or traumatic brain 
injury or prosthetics, things that we are known for.
    Second, training. We train 70 percent of the doctors in 
this country. Who is going to train those doctors without the 
VA? We are also the largest employer of nurses and the largest 
trainer of nurses.
    Third leg is clinical work. Our veterans get the best 
clinical care because our doctors are doctors that not only do 
the clinical care but also do research and teach in the best 
medical schools of our country.
    So I think the American people benefit from the VA and it 
would be a big mistake to even think about privatizing it.
    Ms. Brown. Would you expand on the flexibility as for VA's 
hiring and the flexibility with your budget?
    Secretary McDonald. Well, we talked about this in the last 
fiscal year. Flexibility for the budget is absolutely critical. 
We have over 70 line items where we can't move money from one 
line item to the other despite the fact that we have all agreed 
to give veterans choice. So the veterans have a choice, but we 
don't have the ability to move money where they decide to go to 
that choice.
    So as you know, last year, we had asked your permission to 
use care in the community money to pay for care in the 
community because that care in the community money was in the 
Choice Act funds, not in the regular appropriation. So 
flexibility is absolutely critical because we have given 
veterans choice.
    In terms of paying performance, we have put together some 
requests for legislative help. One example is the 80-hour week 
that we are required by federal law to use which is prohibiting 
our ability to hire doctors in emergency rooms. There is no 
private sector medical system that has this requirement.
    As a result of that, we even had the VA outsourcing some of 
our emergency rooms and that is just wrong. So we need that 
legislation passed in order to free up our ability to hire the 
people we need.
    Ms. Brown. I have another minute and 19 seconds. Mr. 
Secretary would you like to add anything else?
    Secretary McDonald. Well, I passed along a letter to you 
and to the chairman on September 8th detailing the legislative 
request including the 2016 budget. Obviously operating under a 
continuing resolution is going to be terrible for us. It means 
no new programs. It means no way of meeting this increasing 
demand that we are seeing. Budget flexibility for the future, 
we talked about that.
    Thank you for your work on the Denver hospital 
construction.
    Provider agreement legislation, we have veterans' homes 
right now deciding not to renew their contracts with us because 
our provider agreement legislation is not clear. So that is a 
problem. We need to streamline and consolidate our care in the 
community which we are going to have a proposal to you before 
the 1st of November.
    I need help in West Los Angeles. Senator Feinstein has put 
together a marvelous bill. The Senate held a hearing this week 
to allow us to get into extended use agreements with providers 
to build housing on that campus that we could use as bridge 
housing or supportive housing for homeless veterans. And we all 
want to end homelessness in Los Angeles.
    There are several other pieces of legislation I have 
requested, but I think every member has this letter. And we 
would appreciate your hard work on this.
    Ms. Brown. Thank you.
    Secretary McDonald. And we will help.
    Ms. Brown. I yield back.
    The Chairman. Thank you very much, Mr. Secretary.
    I do look forward to working with you on the Los Angeles 
issue and I hope you will be looking at the enhanced use leases 
that are on that property that probably shouldn't be on that 
property for whatever reason. And I know that there is a 
significant amount of turmoil going on out there right now. 
This should be about veterans. That is what the property was 
donated for and I think that is what this committee and that is 
what the VA should expect.
    Secretary McDonald. Absolutely right, Mr. Chairman. We have 
already sent out letters of notice of eviction to many of those 
users.
    The Chairman. Many or all?
    Secretary McDonald. Many because, again, it depends what 
value veterans are getting from the presence of that provider, 
that partner on the property. We can go through that in greater 
detail if you like.
    The Chairman. Okay. And the other thing, you talked about 
budget flexibility. I am waiting for language from you in 
regard to budget. You have talked about it for a long time, but 
we haven't received anything from you. We asked for it probably 
30 days ago. We still haven't gotten anything from you and 
would like to, you know, if you really want budget flexibility, 
send us some language that you want us to work on.
    Secretary McDonald. Will do, Mr. Chairman.
    The Chairman. Okay. Mr. Lamborn, you are recognized.
    Mr. Lamborn. Thank you, Mr. Chairman.
    I want to thank all the people who put this assessment 
together. I want to thank the VA for cooperating and working so 
hard to help get the assessment done also.
    And, Mr. Chairman, thank you for your work in bringing us 
to this point.
    Secretary McDonald, I have a really specific question. I 
want to ask you a local question, then broaden to a general and 
national question.
    But, first of all, I see in your written statement that you 
referenced a potential lack of funding for four major 
construction projects and six cemetery projects.
    Since the cemetery project in my district is already well 
under design, is it still on track for construction funding in 
2017 and will a funding shortfall in any way impact the 
Southern Colorado cemetery construction?
    Secretary McDonald. Thank you for the question, Congressman 
Lamborn.
    Those six would be new cemeteries. The project in Colorado 
would be okay.
    Mr. Lamborn. Okay. All right. Then let me broaden to a 
larger, more general question, but very vital. I believe that 
access to care and streamlining community care are critical and 
we have talked a lot about that this morning already.
    Are you on track to deliver the new Veterans Choice Program 
by November 1st, 2015 as promised?
    Secretary McDonald. I would say we are making progress. In 
fact, the authorizations climb by multiples every month. But I 
would say just like we talked about variability in the VA 
system, there will be variability.
    I was with Dave McIntyre last night of TriWest, for 
example. It is going to take us a while to build capability in 
some of the geographies where not surprisingly there is a 
shortage of primary care physicians or mental health 
physicians.
    But we are working it as hard as we possibly can, and I am 
hopeful and I believe that the consolidation of all the 
programs will make Choice even more effective. Why? Because we 
will go to one program that our employees have to administer 
and the veterans will only have one program for outside care. 
So I think it will simplify things dramatically.
    Mr. Lamborn. Okay. Thank you.
    And, Dr. Giroir, I hope I pronounced that correctly. One of 
the things that you referenced of the many that need reform or 
improvement is physician productivity.
    What are your specific recommendations in that very 
critical area? We could talk about so many things. I know we 
will during the rest of this hearing, but that is one I would 
like to drill down on.
    Dr. Giroir. Thank you for that question.
    If you take the top line that, for example, VHA primary 
care physicians have 14 percent fewer patients or that the 
specialists are much below the 50th percentile in productivity, 
the immediate potential response might be, well, get the 
physicians to work harder, but it is a much more complicated 
problem.
    As I outlined, there needs to be improved clinic space. 
That improved clinic space implies, though, that the VA has the 
authorities to make leases and less than six to nine years to 
do that. It means that hiring a nurse doesn't take six months 
or eight months or nine months. It takes two months like it 
does in the private sector because you lose those people.
    It also requires scheduling. Imagine if your calendar was 
on six different separate screens depending on whether the 
person was a constituent, a non-constituent, a member. Well, 
that is sort of the scheduling system that we found in many of 
the VAs which makes it impossible to understand what the 
physician's real schedule is going to be.
    So I think in the near term, these are the kinds of issues 
that can promote productivity even within the system and 
enhance the job satisfaction among not only the physicians and 
the staff but, again, as Mr. Byrne said, think of all those 
cornerstones, leadership, governance, operations and data and 
tools. And I think this is one example of them. And hopefully 
that answered your question to some degree, sir.
    Mr. Lamborn. Well, it really helps. And that is something I 
will work with you. I know all of us here, Dr. Roe and everyone 
here has a concern about that specific area, doctor from Ohio. 
And we all want to work with you on this. I mean, this is so 
critical. So I will work with Brad.
    And thank you and I yield back the balance of my time.
    The Chairman. Thank you.
    Mr. Takano, you are recognized.
    Mr. Takano. Thank you, Mr. Chairman.
    Mr. Secretary, do you agree with something I have read in 
the report that the system's overhauls, the system's based 
overhauls described in the report could take at least five to 
ten years to take hold? Are we looking at that?
    Secretary McDonald. No. I mean, first of all, it is already 
underway.
    Mr. Takano. Okay.
    Secretary McDonald. Second of all, you know, while Congress 
demanded this assessment and this assessment cost $68 million 
from our budget, $68 million, I had done my own assessment when 
I took over, my own root-cause analysis. I have done this 
before. And we are on track with many of the same things.
    I appreciate the depth of the analysis. I can't do that 
myself, but these things are already underway and we are 
already seeing results. We wouldn't have had seven million more 
completed appointments if we didn't put in 1.8 million more 
square feet of space, if we didn't put in over 1,400 new 
providers, if we didn't put in over 3,000 new nurses. So 
progress is being made.
    Mr. Takano. My concern is that if it were true, I have seen 
the turnover on this committee and the turnover within the 
Administration, we have one year left of this Administration, 
the change in Administration regardless of which party will 
occupy the White House, that part of the problem is the 
institutional memory.
    And you mentioned you didn't agree with the idea of the 
commission, that you see this committee and the Senate 
committee as the--and I agree with you, but I think both 
parties need to be committed to constituting these committees 
with people that are going to stay here and to work with the 
department even as the top positions change.
    Secretary McDonald. The chairman and I have said publicly, 
and please correct me if I am misquoting you, that we have a 
unique moment in time right now where we have tremendous 
unanimity between the two parties, between the House and the 
Senate, and we have a new leadership team at the VA.
    Thirteen of my top leaders are all new, 13. We have got the 
transformation underway. The work that was done by the 
independent assessment is incredibly helpful because of the 
depth of analysis. I think we just join arms and we do it and 
we create irreversible momentum in this transformation.
    Mr. Takano. Mr. Secretary, I was disappointed to learn that 
the DoD let out the contract, a several billion dollar contract 
for health IT and that there is still no commitment for it to 
sync up with VISTA.
    Secretary McDonald. Their contract has a provision that it 
has to be interoperable with VA.
    Mr. Takano. Oh, so there is a provision in the contract?
    Secretary McDonald. There is a provision for that and we 
are working very closely with them on that. We have so many 
joint DoD/VA facilities now. There is no turning back on this. 
We have got to have an interoperable----
    Mr. Takano. Okay. Well, that is a relief to know. I mean, I 
have been fretting about the fact that that contract has been 
let out.
    Secretary McDonald. I would be happy to send a team of 
people to your office and have them show you the 
interoperability.
    Mr. Takano. I would be very pleased to learn more about 
what you are doing.
    The report also talks about, points out that many feel that 
in this area what was once VA's crown jewel has been allowed to 
stagnate and now 85 percent of VA's IT budget is now going to 
the maintenance of VISTA. You know, past efforts to update 
health IT, particularly achieving interoperability with DoD, 
have been mired with problems.
    What lessons can we learn from past efforts to ensure that 
we are on a successful pathway to create a comprehensive system 
able to seamlessly operate with DoD----
    Secretary McDonald. To me, it all starts with----
    Mr. Takano [continuing]. And the third-party providers that 
we want to do with----
    Secretary McDonald. Yes.
    Mr. Takano [continuing]. Community care?
    Secretary McDonald. Well, that is absolutely critical. I 
mean, we have got to have interoperability with DoD, but the 
interoperability with the private sector is absolutely critical 
because we do agree that there will be times where veterans 
will go outside VA for care. So that interoperability becomes 
critical.
    It starts with getting the right leader in place. We now 
have the right leader in place, LaVerne Council, who has been 
the head of IT at Johnson & Johnson, at Dell. She knows how to 
do this. She is very good. She is all over it.
    Number two is we have got to take on the big systems. Our 
financial management system which ran into problems last year, 
last fiscal year was written in COBOL. COBOL is a language I 
wrote at West Point in 1971, 1972. You can't even find people 
writing COBOL.
    Now, the chairman will bring up I am sure that we have 
tried twice before to replace that system and failed. I am 
telling you we can replace that system and we have the 
leadership to do it.
    The scheduling system which was properly brought up, 1985, 
dates to 1985. We have put in 11 patches, but they are just 
patches. We need to overhaul the system. We need a new system 
as the doctor brought up. So we have a lot of systems work to 
do. We need the budget to do it and I will get you the right 
people to do it. And we will get it done.
    Mr. Takano. Well, this is very heartening testimony, Mr. 
Secretary.
    And, Mr. Chairman, I look forward to hearing what he has to 
say about simplifying our ability to do community care with 
private providers.
    The Chairman. Thank you very much, Mr. Takano.
    And I think that, you know, there are two words, 
interoperability, and that sounds great, and integration. And, 
you know, the integration of the system is the thing that is so 
critical. And I can understand maybe not integrating the 
private sector, but for DoD to continually be the agency that 
is pushing back over billions of dollars that have been spent, 
I mean, it is not helping.
    Mr. Takano. I mean, it is unbelievable.
    The Chairman. And even when Congress orders it to be done, 
it doesn't get done. And we want to help the VA and we 
understand that you are not the one that is causing the 
problem.
    Secretary McDonald. I am happy to put on a display, a 
demonstration for the committee so you all can see what we have 
achieved. In the end, it is all ones and zeroes and that is why 
the interoperability is relatively easy to do. But we are happy 
to demonstrate it for you.
    The Chairman. Thank you very much.
    Mr. Bilirakis.
    Mr. Bilirakis. Thank you, Mr. Chairman. I appreciate it.
    I think Mr. Lamborn mentioned about the physicians and what 
have you. And one of you testified with regard to medical 
scribes. Why don't we have medical scribes available to all our 
VA physicians?
    And I hear from my veterans and they say that the doctor 
really wants to treat them and, you know, they still have to 
scribe and it takes so much time away from the patient.
    Dr. Shulkin. Congressman, I think as you are suggesting, 
the issue of taking physician time away to spend on doing----
    Mr. Bilirakis. That is my----
    Dr. Shulkin [continuing]. Entry into a medical record is a 
problem. It is a problem in VA. It is a problem throughout the 
healthcare industry. We are seeing practices, particularly in 
the private sector, of using scribes, something that I am very 
familiar with.
    And we actually are beginning in different areas of the VA 
to begin to take a look at this as an option. I think it is a 
viable option that we are exploring. It is obviously an 
expensive option and given the size of VA, we are taking a hard 
look at that because using resources appropriately is certainly 
very important to us.
    But it is an area that we are trying to lessen the time 
that physicians are spending entering information into records 
and more time with their patients. And the scribe system is 
certainly one of those avenues we are looking at.
    Mr. Bilirakis. I appreciate----
    Secretary McDonald. As David says, we are testing, we are 
piloting the scribe. The flip side of the argument just so 
everybody understands both sides is if we simplify the medical 
record enough so that the alerts that come up really help the 
doctor and, you know, you want the doctor interfacing with that 
record to see those alerts rather than a scribe who may not be 
sufficiently medically trained to understand what those alerts 
do, so we have to work both sides of the equation.
    Mr. Bilirakis. Thank you.
    In your testimony, Mr. Secretary, you mentioned that this 
independent assessment reinforced the VA's own analysis. Has 
the VA done an independent assessment of their own?
    Secretary McDonald. We have. In fact, in my first few weeks 
in position, I traveled to as many facilities as possible. I 
have now been to over 220 facilities. And that has fed the 
information into our transformation plan.
    I shared it with the chairman within my first couple of 
weeks. You might recall, it was a high-performance organization 
model. I shared it with the President of the United States. And 
that is what led to the 90-day plan called the Road to Veterans 
Day and also to the My VA transformation and the five 
strategies of My VA.
    Mr. Bilirakis. Would you be willing to share it with us 
and----
    Secretary McDonald. Sure.
    Mr. Bilirakis [continuing]. The public as well?
    Secretary McDonald. Absolutely. It is only two pages long. 
It is not 4,000 pages and it didn't cost $68 million.
    Mr. Bilirakis. Okay. Well, I would appreciate us taking a 
look at it. We really would. I think we would get a lot out of 
that.
    Was there anything that VA's assessment discovered that was 
not included in the independent assessment?
    Secretary McDonald. I think what I would argue is my 
assessment was more about leadership and culture. It became 
very clear to me that I needed a new leadership team. Jim 
Collins who is a friend of mine likes to say you got to get the 
right people on the bus and get them in the right seats on the 
bus. The assessment talked a lot about leadership, but very 
specifically I need a new leadership team.
    Secondly, I spent a lot more time about the culture. What 
do I need to change the culture? I called out two things, one 
called design thinking. Design thinking is a technique that is 
used to design delightful consumer experiences. And I can go 
into more detail of the training that we did two weeks ago or a 
week ago on that.
    Secondly, Lean Six Sigma and train Lean Six Sigma. Think 
about design thinking as the way you design the experience for 
the consumer. Think about Lean Six Sigma as the way you improve 
productivity of what is backstage, what the consumer doesn't 
see.
    Mr. Bilirakis. Thank you.
    Last question. VA's presentation to the Commission on Care 
two weeks ago stated that VHA has begun to work on many of the 
188 recommendations that were included in the assessment, the 
independent assessment.
    Which of these assessment's many recommendations have you 
been working on and prioritized, if you can give me some 
specific examples?
    Dr. Shulkin. Congressman, be glad to do that. I think that 
in addition to what the secretary said, VHA has also had its 
own strategic plan called the blueprint for excellence. That 
was created after the Phoenix crisis and Dr. Jonathan Perlin 
came in for a period of time to help with VHA to create its own 
strategic plan.
    So we have been hard at work in many of these areas that 
actually fit very nicely aligned with the recommendations that 
were identified in the independent assessment. They have to 
deal with these exact issues, how we prioritize our data, how 
we essentially address our leadership issues, how we engage our 
staff and improve morale and improve our hiring practices, how 
we ensure consistency and best practices across the system, 
something that both Mr. Byrne and Dr. Giroir identified today.
    So these are all issues that VHA is hard at work at. I 
didn't say that we have done all 188 but that we have begun 
work on the vast majority of these. And we are going to use 
this independent assessment and what comes out of the 
Commission on Care to make sure that we are finding those 
appropriately.
    Mr. Bilirakis. Thank you very much.
    I yield back, Mr. Chairman.
    The Chairman. Thank you very much.
    The secretary keeps reminding us that we have invested $63 
million or thereabouts for the----
    Secretary McDonald. Sixty-eight million.
    The Chairman. Okay. I would like to remind the members that 
we just raised the cap on the Denver hospital to $1.675 
billion.
    Secretary McDonald. Sir, it is not a hospital. It is a 
complex of about 16 buildings.
    The Chairman. It is a massive cost overrun and screw-up.
    Secretary McDonald. And we agree with that.
    The Chairman. Thank you.
    Ms. Titus.
    Ms. Titus. Thank you, Mr. Chairman.
    Maybe we should have used the $68 million to apply to that 
hospital.
    The Chairman. They are probably going to need it before it 
is over with.
    Ms. Titus. That is what worries me.
    Thank you, Mr. Secretary, for being here. It is always a 
pleasure to see you.
    I just want to begin by taking exception to the doctor's 
blanket statement that veterans are voting with their feet by 
going to the private sector. I think that is a spurious 
conclusion. I think some of those veterans are going to the 
private sector not because they want to but because they have 
to because they can't get the services, can't get the 
appointment, don't live close enough to a facility, but they 
prefer the VA.
    And that kind of brings me to my general point. I made this 
on the floor last week that I am worried about how the VA and 
how Congress are funding the needed healthcare for our 
veterans.
    Last week, as you heard many times, we voted to fund the 
construction of the Denver facility. Now, I know it is a good 
facility. I am not questioning the importance of it. All 
veterans everywhere need care. But when we are talking about 
paying for it, we are just moving around the deck chairs. We 
are not saving the ship, I am afraid.
    We are waiting for the specific recommendations of how the 
VA is going to move that money around, but what I have seen so 
far is pretty troubling. We are robbing Peter to pay Paul. And 
two of the points have come up this morning.
    You mentioned the COBOL antiquated language of computers 
and IT problems, but one of the recommendations for paying for 
Denver is taking about $50 million out of the IT budget. You 
also mentioned that you are going to propose cutting funding 
for retention and recruitment programs and, yet, one of the 
recommendations and one of the problems that is seen is that we 
cannot hire enough doctors, even enough much less the best and 
brightest and that our hiring process is much longer than you 
find in the private sector.
    I talked to the head of the medical facility in Las Vegas 
and he said they had run out of this money. They need more 
money, not less, as an incentive to get the professionals 
there.
    Now, I am not just blaming the VA. I think Congress is at 
fault, too. You mentioned that these short-term CRs are not 
helpful. Certainly I think they are irresponsible. And also we 
have these arbitrary caps that don't make any sense. They don't 
allow us to accommodate future needs. You know, maybe we should 
just put the VA in the OCO account. That seems to be where 
everybody wants to put the money.
    But I would like to ask you how important is it to get a 
real appropriations bill? I mean, and also do you think you 
will be coming back to us with another crisis situation? We are 
going to have to close down hospitals if we can't move this 
money around or we can't get some more money. Give us kind of a 
projection for that.
    Secretary McDonald. Well, I hate to predict a crisis, but 
remember the rate at which we are--with these new hepatitis C 
drugs which are curing hepatitis C for the first time without 
the side effects that occurred previously. Remember veterans 
have a higher incidence of hepatitis C than non-veterans. We 
are trained to cure all of those veterans with hepatitis C. 
That is what helped create the budget crisis of the last fiscal 
year.
    That demand for the hepatitis C drug is not going to abate 
because suddenly it is October 1st. So the continuing 
resolution is obviously not sufficient to be able to continue 
on the path we were on in order to treat the hepatitis C. That 
is just one example.
    The other example, of course, is as you said, I said 
earlier, on average, veterans are using the VA for 34 percent 
of their care. Seventy-eight percent of veterans have a choice, 
TRICARE, private health insurance, Medicare, VA. They choose VA 
because of the care. That is what the VFW study said. Eighty-
two percent choose VA. Eighty-seven percent recommend VA.
    If that 34 percent number continues to rise, which it 
appears to be doing as more people are coming into the system 
as the care improves, then we have a real budget problem. And 
the budgeting the way we do it isn't going to work. It is not 
the way a business would do it.
    I mean, we started the budget for 2016 two years ago. The 
drug was invented, you know, between the time we started the 
budget and the time the budget is actuated. So that becomes a 
problem. We need a more dynamic system. We also need to do a 
better job forecasting. And that is on us.
    And then the inflexibility causes us to end the year with 
pockets of underspending where if we could aggregate all of 
those funds together, we could make sure that they were all 
spent on behalf of veterans.
    But because this particular fund isn't maybe needed and we 
don't want to go over, we are always underspending. In 
business, you tend to aggregate funds so that you spend all the 
money that you have appropriated.
    Ms. Titus. And I worry about the personnel for the appeals 
system. You talked about the need for personnel for the 
original backlog, but you have got over 300,000 appeals in the 
system right now and that number is going to grow, too.
    Secretary McDonald. It is. We are working right now to re-
engineer that process. We will need some new legislation. We 
have been working with the veteran service organizations on 
something called the fully-developed appeal that will 
accelerate the process, but we need more people. And those 
people were in the budget proposal.
    Ms. Titus. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Dr. Roe, you are recognized.
    Dr. Roe. Thank you, Mr. Chairman.
    And also thank the committee for all the work you all have 
done.
    I am going to pass along a little wisdom I got from an old 
GP when I started my practice many decades ago. He said, son, 
he said you need to follow the three As in the practice of 
medicine. One is availability which the VA has flunked. Two is 
affability. Do they like you once they get in? Third is your 
ability.
    And I think one of the things we ought to talk about and I 
am going to bring up some issues that came up with my veterans' 
person at home and walk you all through down at the ground 
level, not at the 30,000 foot level where we have been.
    On productivity, I had a colonoscopy a couple of weeks ago. 
The two docs I went to see in the private sector, a nine iron 
from over at the VA, do 30 to 40 per day. You would overwhelm a 
VA anywhere if they thought they had to do 30. And this was 
just a routine day for these guys in private practice.
    And you talk about scribes. My goodness. Hiring a six 
figure doctor to make them 15 or 20 percent more productive 
with a $12 or $13 an hour employee makes perfectly good sense. 
Almost every private doctor you see now are shifting to that. 
It is an added cost to them, but it allows the most skilled 
person in the healthcare system to stay productive and let that 
data entry go to somebody who is of a lower skill.
    And I think you are going to have to switch to that to make 
up the difference. There is just not enough doctors in America 
with the current system. It slowed me down by about 25 or 30 
percent, the electronic health record did. I tried to speed up. 
I used everything I could. I just couldn't do it.
    And on facilities, I think you need to be innovative. We 
had a facility in our area where a local hospital had been 
vacated and they leased that to the VA for a dollar a year. We 
need to be looking at innovative ways like that.
    And one of the things it said in the report, and by the 
way, this was a fantastic job that was done, was that the 
capital requirements over the next decade, the funding levels 
are two to three times more than the funding levels are and 
then it goes down two bullet points later and says VA 
construction costs are similar to other public agencies but 
double the private industry best practices. And VA's time to 
complete exceeds both the public and other private sector. So 
you may have enough money if you can just get it done on time 
and use those other things. So I would point that out.
    Let me go right to what I wanted to talk about which is my 
own veterans' officer at home, the person that does my work at 
home. And basically what she is saying is how do you get an 
appointment through the Veterans Choice Program? She said she 
had been trying to put together a summary. And what is 
happening is there are two ways you get in there. A veteran can 
either be eligible by a 30-day wait list or more than 40 miles. 
And most of the problems she saw were the 30-day list.
    And this is what happens. Below is the information has been 
given to me by the rollout of the program. And in my 
experience, there appears to be a breakdown somewhere in this 
process, but I have been unable to get clear answers on how to 
fix it. The VA blames TriWest. TriWest blames the VA.
    Eligibility is determined by the VA primary care doctor if 
the appointment is past 30 days. The non-VA care staff then 
uploads this list of eligible veterans to the VA central office 
here in Washington nightly and the veteran is told to wait five 
to seven days and then call TriWest. The central office then 
sends the information to TriWest. It can take three to seven 
days. If the consults don't get added, medical documentation 
didn't get uploaded, authorization gets canceled, then the 
veterans are on a merry-go-round.
    Look, when they came to my office to get an appointment, I 
said you need an appointment with Dr. Smith. They went out 
front and made the appointment. That is what should happen. It 
ain't that complicated.
    And all this in between and I can go on. TriWest has a 
different view of it. I want to submit this to the record 
because it really gets to the bottom of what is actually 
going----
    The Chairman. Without objection.
    Dr. Roe. Thank you, Mr. Chairman.
    The non-VA care staff were given no training on this and 
they basically were left just to wing it on how to make these 
appointments. That was one of the things that was brought up in 
the report how local non-VA care staff increased from five to 
15, but still are struggling to make all these appointments.
    And listen to this right here. There is talk of calling 
each patient for every appointment to make sure they keep it. 
If the patient says I don't want to go, they still are told to 
call them two times a month past the appointment time. That is 
a complete waste of time.
    And the outpatient clinics also ought to be able to add 
patients to the electronic wait list instead of sending them 
over because an appointment may come up. Veterans get left out 
like that.
    And the TriWest portal is not very friendly. Private 
doctors who do not like jumping through all the hoops of the 
Choice Program are saying they must give a percent of their fee 
to TriWest in order for TriWest to file the claim.
    So we have a clinic that is closing in our office, in our 
VA, our chiropractic and pulmonary clinic because the doctors 
are just fed up with the way the system is. It is so 
bureaucratic.
    So, anyway, I could go on and on. This is very extensive. 
This is on-the-ground stuff that is going on today at our 
medical center. And I bet you it is going on around the 
country. And I think these are things I will submit to you so 
you can get to work on this. And, again, appreciate the effort 
that you put into it.
    Mr. Chairman, there is some valuable information here for 
the VA to use. And I yield back.
    The Chairman. Thank you. Ms. Brown, you had a question?
    Ms. Brown. Yes, I do. I am meeting with TriWest today. You 
cannot send a veteran to a medical agency or anywhere else 
until they get prior approval from VA. It is important that all 
doctors review reimbursements. No person in my office can send 
someone to a doctor. The request must go through the system so 
that a veteran can receive prior approval. How long and why 
does it take so long for that physician to get reimbursed?
    Secretary McDonald. We have flow charted that process, and 
let me let David talk about the improvements that we have made 
to that process. He will answer questions one and three, and I 
will take two on the facilities.
    Dr. Shulkin. Okay. Dr. Roe, I think your old adage on the 
three As is exactly right. And you have to remember, we brought 
this choice system up in 90 days. This is a national, very 
complex system. And what we have heard after bringing it up in 
90 days is exactly the type of feedback that you have been 
hearing from your constituents. The Secretary and I are both 
out in the field. We understand that these problems are 
happening. And so what we have begun to do is to redesign the 
system and to process map it out.
    Both the Secretary and I spoke to the CEO of TriWest last 
evening and we are beginning now to make outbound calls to the 
veterans. Before they had to call in. We are beginning to 
actually embed Tri-West staff in the VA so that they are 
working in teams. And we are beginning to start eliminating 
some of those steps.
    It is going to take a while. It is painful to watch this 
when you hear stories like what you are hearing. But we 
understand the problems there. We are working very hard. We 
think TriWest and Health Net are working to help us make this 
system better and we are committed to doing this with urgency.
    Secretary McDonald. Relative to facilities, we agree with 
your comment. In fact, one of the things we have talked with 
Rich about is figuring out how we can come up with a total 
system map that includes all the DoD facilities, all the VA 
facilities, Indian Health Service, medical school affiliates, 
so we can better understand where do we need to invest? Where 
are the gaps where we need to invest, where facilities do not 
exist?
    With the draw down in the Wars in the Middle East what we 
are finding is DoD has a lot of capacity that we can use. 
Martin Army Hospital is an example I used earlier, but there 
are many examples of where we are working together with DoD so 
that we can use the same facilities.
    If you look at the space that we have been doing over the 
past year or so we have been leasing more space than we have 
been building, almost to a factor of two to one. So I mean that 
is going to continue to be the case because we have got to be 
more flexible to meet the demand where the demand goes.
    The Chairman. Thank you. Mr. O'Rourke.
    Mr. O'Rourke. Thank you, Mr. Chairman, and to the ranking 
member for organizing today's hearing, and to the panelists for 
joining us.
    I want to get back to a question that was raised earlier 
about the role of the VA system going forward and a question 
raised by MITRE and Dr. Giroir, the letter that you signed to 
the Secretary on September 1 suggesting that it is worth 
looking into whether or not the VA should focus on specific 
areas of service related conditions. And in some of the things 
that we have heard from the Secretary about the 34 percent 
utilization rate today, and that for each additional percent of 
utilization it costs the VA I think $1.4 billion was the number 
that we got from you. And that 34 percent is just of those 
veterans who are currently eligible, I mean enrolled. It does 
not include all eligible, which I believe is 9 million, or all 
veterans in the country, over 20 million.
    So from a fiscal perspective it is hard to make the case 
that the VA should provide all care to all veterans all the 
time. I just do not know how we could do it fiscally. I think 
there are some very serious operational concerns that are self-
evident to everyone here. And then on the moral dimension we 
really have a crisis in mental healthcare. When officially we 
know that 22 veterans a day are taking their own lives, and 
most veterans organizations that I have spoke to think the real 
number is certainly much higher than that. And when we know 
that care delayed becomes care denied, turns into tragic 
outcomes for veterans and their families, I want to ask you and 
Mr. Byrne and the secretaries about this question of 
prioritization.
    Should we be prioritizing in the 41,000 funded but unhired 
positions within VHA mental health providers? Should the VA 
become a center of excellence, as I think is suggested in the 
MITRE report, or one of the issues that we should look at, so 
that perhaps 100 percent of eligible veterans who have Post 
Traumatic Stress Disorder, are suffering from the consequences 
of Traumatic Brain Injury, have Military Sexual Trauma, have 
traumatic amputations or other significant combat and service 
related conditions, they go to the VA because it is a center of 
excellence. There are no access issues and we prioritize hiring 
and resources there. And when we refer people out into the 
community we refer them out for conditions that are comparable 
to what the general population has, whether that is diabetes or 
the flu, or someone looking at audiology, or your feet, or any 
number of other conditions that are comparable. Tell me, I will 
start with you, Dr. Giroir, what is wrong with that conclusion 
and why the commission has not reached that already?
    Dr. Giroir. Thank you for the question. And there were so 
many statements that we do support very strongly, what you 
said. Among the first, the first point, I think it goes back to 
aligning resources with demand. And the VA in some aspects is 
in an impossible situation because the demand could literally 
double overnight depending on how the services are provided and 
the demand for the veterans. And that is an impossible 
situation to plan for X, 2X, or 3X. And you know the numbers as 
we outlined them. So to specifically define what the VA is 
going to do, to fund it specifically for that, and to provide 
other sources of care for the remaining is the main point. We 
have to align demand with resources, however that is defined. 
And it could be done two or three different ways. They can all 
work but you----
    Mr. O'Rourke. Is some demand more important than other 
demands? So if a veteran is coming back from Afghanistan with 
Post Traumatic Stress Disorder and cannot get in to see a 
mental healthcare provider, is that not more important?
    Dr. Giroir. So I am not going to say more important. But 
what I will say, which is the essence of your question, sir, is 
the panel, the blue ribbon panel does feel, and I think it is 
true, that there is care for these kinds of specific issues, 
Post Traumatic Stress Disorder, Traumatic Brain Injury, 
traumatic amputation, severe burns and injuries, that nobody on 
the planet does it as good as the VA.
    Mr. O'Rourke. Right.
    Dr. Giroir. And it needs to be comprehensive care, not just 
in the operating room, but all the social services, the mental 
services, the comprehensive provider care that needs to be 
done. And certainly at the essence that is something the VA, 
among all things, needs to be preserved for. Whether the VA 
should take care of every patient with hypertension, or 
diabetes, or other issues is a question that needs to be 
resolved by the governance. But clearly those core issues are 
something that our veterans rely on, will rely on. And the 
future injuries of war that we cannot predict, the VA must 
always be there for that in our opinion.
    Mr. O'Rourke. I am out of time so I will have to follow up 
with the other panelists at a future date. But I would 
certainly love to sit down and talk with each of you and get 
your responses to that question.
    Secretary McDonald. We would look forward to that 
opportunity. We have eight classifications today that help sort 
through some of that and we would love to sit down and go 
through it with you.
    Mr. O'Rourke. Thank you. Thank you, Mr. Chairman.
    The Chairman. Dr. Abraham, you are now recognized for five 
minutes.
    Dr. Abraham. Secretary McDonald, we will start with you, 
sir. You have said on multiple occasions that you want the VA 
to be run as a business. You being of a business background 
with Tide and Proctor and Gamble know that certainly the VA 
could be a more efficient entity if it were run in a business 
model.
    I want to reference, you said that you were somewhat 
opposed to the governance board having some oversight of the 
VA. Why would you be opposed to that, sir?
    Secretary McDonald. I am not opposed to a board as such. In 
fact, I even set up an external advisory board which is loaded, 
just like the blue ribbon panel, with experts to help advise 
me. The reason I did that was I was disappointed that I have 
attended lots of committee hearings but nobody wanted to talk 
about the transformation of VA. We were talking about problems 
that occurred in the past. So I do see the role of the board. 
But my thought is that if you as Congress really decide you 
need this board, is that not an abrogation of your 
responsibilities? Cannot we, I think with the chairmen that we 
have, with the committees that we have, with the unanimity of 
purpose that we have, we can do this ourselves without needing 
a separate board.
    Dr. Abraham. And we want you to do it yourselves.
    Secretary McDonald. Well no, I mean I need your help.
    Dr. Abraham. We want the proof in the pudding. Well, but we 
understand. But again, we do not want to abrogate our authority 
or our responsibility.
    Secretary McDonald. Absolutely.
    Dr. Abraham. But we want you to do what you are paid to do, 
and herd your people into the right direction and make this VA 
system a better system. Like Dr. Roe, we are back in the 
districts on almost a weekly basis, either on the weekends or 
during the week. And we are, you know, our veterans really are 
not feeling the love, so to speak. I mean, we are still having 
some massive issues. And you go across anywhere in these United 
States and these same issues come up and up.
    Dr. Shulkin, I will also reference Dr. Roe on these 
scribes. I have used scribes for years. And I understand the 
alert deal. But let me tell you, they work. And they work very 
well. And you as a physician can increase productivity at least 
by 30 to 40 percent if you have a scribe that is knowledgeable 
just in the system. His other point with the three As, his 
first one was availability. Another novel idea, and I am sure 
you guys have thought about it. If you expand hours of your VA 
clinics, I assure you, as being a director of a multi-doctor 
practice, there will be nurses and doctors that stand in line 
that will take that 5:00 p.m. to 11:00 p.m. shift if they have 
children, if they have a spouse that works. And again, you are 
using just the same facility and just getting more efficiency 
out of that. So again, you know, these are ideas that--go 
ahead, sir.
    Secretary McDonald. Well I will just say that our RVU 
productivity is up eight percent, over eight percent----
    Dr. Abraham. Okay.
    Secretary McDonald [continuing]. On a budget increase of 
about 2.8 percent.
    Dr. Abraham. All right, now let me interrupt you----
    Secretary McDonald. And extended hours is one of the 
reasons.
    Dr. Abraham. And I know Dr. Wenstrup on my right here, he 
has referenced this RVU situation before. Now are we to the 
point now where you can give us an RVU number?
    Secretary McDonald. Yes.
    Dr. Abraham. Okay. Excellent.
    Secretary McDonald. And David can talk in more detail about 
RVUs.
    Dr. Abraham. Please.
    Dr. Shulkin. Yes, I mean I think all of your points are 
excellent, Congressman. We are, we are actually doing many of 
the things that you have talked about. As the Secretary 
mentioned, we have extended hours, we have improved 
productivity on the RVU basis approximately eight percent, but 
many of our specialties well above that as well. And we are 
looking at issues like the scribe. But what we want to do is to 
take the independent assessments recommendation and look at 
these as system issues rather than pushing on one particular--
--
    Dr. Abraham. And I understand that. And, you know, Mr. 
Byrne gave the four cornerstones of what his assessment said. 
And if you look at them, I mean, that is just basic Business 
101. I mean, it does not take a rocket scientist to figure this 
stuff out. What we are asking you guys to do is take it to 
heart and actually do it.
    While we have got just a few seconds left, Secretary, do 
you now have the power, have we as Congress empowered you now 
to, you talk about changing culture, well the one way to change 
culture is to fire some people that are not doing their job. Do 
you have that power now to do that?
    Secretary McDonald. Yes, we have terminated over 2,100 
people since I became Secretary.
    Dr. Abraham. That is actually firing? That is just not 
retiring? That is----
    Secretary McDonald. Well, it is terminations. It is 
terminations. It includes some people who were on a 
probationary status where we did not hire them afterwards. But 
I think, you know, if you want to look for points of 
accountability, let us talk about a gentleman named Cathedral 
Henderson in Augusta, Georgia, who, you know, is now, has 50 
counts of falsifying consult records, each one carrying a 
potential fine of $250,000 and in total potentially look at 
five years in jail. He is going to trial. So I am, you know, 
while I would like to do it faster we are holding people 
accountability. We are using all the forces at our ability, 
whether it is the Office of Special Counsel, IG, or in this 
case the FBI.
    Dr. Abraham. Okay. Thank you, Mr. Chairman.
    The Chairman. Mr. Walz, you are recognized.
    Mr. Walz. Thank you, Mr. Chairman, and ranking member for 
holding this. Thank each of you for your citizenship, for being 
involved in this. This is not going to be fixed by Congress, it 
is not going to be fixed just by the administration, it is 
going to be fixed by citizens demanding and using our best and 
brightest to figure out a way to do this. So I for one am 
grateful.
    And Mr. Secretary, thank you. And I am glad to hear you 
say, while not totally accurate, some of us have been asking to 
have this conversation on long term systemic change. I brought 
up many times the idea we had a quadrennial defense review that 
drove policy, strategy, and budgeting from that. We never had 
such a thing on the VA. And so I think it is really heartening. 
I appreciate all the work that went into this. I think hearing 
from Dr. Roe, it sounds like he did just what we talked about, 
Mr. Secretary. We kind of did a post-mortem on someone's 
experience and those folks out there. So I hear TriWest a lot. 
Keep Health Net in mind, too, on this.
    Secretary McDonald. We do.
    Mr. Walz. I know you do. And I am grateful for that. I 
wanted to come back where Dr. Abraham was, because I thought 
this was an interesting point, Mr. Secretary. Of all the 
recommendations, and in full disclosure I always say this 
because it certainly influences my decision, I represent the 
Mayo Clinic area. So I look at how Mayo Clinic's model is on 
outcomes. And this idea of the recommendation of a non-
governmental entity, I looked at that and tried to understand 
it. But I kind of think that I agree with where Dr. Abraham was 
talking about you have a job to do, we hired you to do it. The 
public hired us to do a job, too. I am a little bit 
uncomfortable, too, putting someone between us and them. I am 
just not sure we have the resources or if we have done it well 
enough. So I would kind of like to get each of your, because I 
know this board concept, it is with Mayo, it is with Kaiser, 
and all of that, and I know that is where it came from.
    Secretary McDonald. I have over 25 special advisory 
committees today, 25. I like the statement Jack Welch used when 
he talked about GE, we are trying to reduce levels and layers. 
We are working very hard at that. That is why we have not 
filled a lot of positions. That is why we are reducing the 
number of VISNs from 21 to 18. That is why each state now will 
generally have one VISN. Jack Welch used to say that adding 
levels, layers, and boards is like putting on more sweaters. 
You do not know it is cold out because you have got all these 
layers on.
    I like to have my pulse on what is going on in the 
business. That is why I travel so much. I do not think that 
creating a separate board is going to stop this committee from 
doing what this committee does. And I would just like to 
transform what we do and to be working on the transformation in 
the future rather than what we have been doing, which is 
focusing----
    Mr. Walz. Do you think it is possible for us to assume that 
role, too?
    Secretary McDonald. Yes, sir, I do.
    Mr. Walz. Because I would like to be that. I would like to 
be part of this transformation project, not just coming in here 
and screaming when there is a fire to put out. Secretary 
McDonald. Yes, I do. And you are right, you did bring this up 
in the past. So, you know, we are all for it.
    Mr. Byrne. So the recommendation that came from our 
assessment actually originated from best practices in the 
private sector, as you mentioned with Mayo.
    Mr. Walz. Right.
    Mr. Byrne. I think the transformation requires a strong 
partnership and level of trust with the board, whoever they may 
be. And in a situation as complex as the Veterans healthcare 
system, which is very complex and very distributed, it is not 
something you can pick up in just a couple of hours. You saw 
when we did an in depth study the amount of effort it took. For 
people to have enough familiarity to help make strategic 
decisions and guide levels of expected performance, you have to 
spend time. There is just no way around that.
    I think it would be great if this body did that. But some 
organizations say, if I can endorse a proxy to help advise them 
and spend the time to become familiar, and to build those 
levels of trust, then--they can use that as a faster way to 
make decisions and improve performance. To be honest there are 
25 advisory boards, but none of them really have governance 
properties. And that is why we thought a governance board would 
actually help build a better partnership. But if it does not 
build the partnership, then we would not recommend it--is the 
purpose of the governance board is to build trust by--1682 by 
having people spend more time, and also to give you access to 
the best experts in the private sector. Because this is not 
just about putting time in. This is about putting time in with 
people who have done this job from all different stakeholders 
perspectives.
    Mr. Walz. Well I would like to spend more time on that, I 
think. Because I think we as a body need to explore this, or 
whatever, because I am always fearful of giving away our power. 
Because I thought that maybe, and we talked about on, I think I 
have a record streak going here saying Denver so I am going to 
say it today again, Denver, that I said maybe we should be 
involved in change orders if that is what it takes to get our 
hands in this and take responsibility. So I will leave you with 
this.
    And Mr. Secretary, I know of all the things you have got on 
your plate, you have got a lot. But I think people here need to 
recognize last week this Congress allowed the Agent Orange Act 
to expire. And I think it is altogether possible that the study 
that we asked for an extension so we could see it that is going 
to come out in March is going to add hypertension and stroke to 
that. And you are going to add literally hundreds of thousands 
of people who by the scientific data are going to show, 
experience these catastrophic health consequences because of 
their exposure to Agent Orange and the pressure is going to be 
on. If we do not have the courage to do it they are going to 
ask you. And much like the Nehmer claims it is going to add to 
your work. And I just lay that out there for our folks to start 
thinking ahead.
    Secretary McDonald. It is a very good point. And we have 
been working very, very hard to clean up some of the things 
that have been hanging around. C-123, Agent Orange, for 
example, we have now cleared that up.
    Mr. Walz. Which I very much appreciate.
    Secretary McDonald. No, you know, this is the right thing 
to do. Brown Water Navy, Blue Water Navy, we are going through 
all of these things detail by detail. The point is that, you 
know, I get lots of letters from members of Congress wanting to 
add more and more benefits for veterans, and I support that. 
But we also need the funding and the personnel to be able to do 
it.
    Mr. Walz. That is right. That is right.
    Secretary McDonald. If we added, for example, and this is 
not in the decision. But if we added another pre-condition, and 
we do not get the people to do it, the 80-plus percent progress 
we have made on the backlog of claims will go away.
    Mr. Walz. That is correct.
    Secretary McDonald. Because----
    Mr. Walz. So your decision is going to be either to deal 
with that or deny the claims. And I think all of us here to 
recognize we are part of this.
    Secretary McDonald. Well, we would prefer to do what is 
right for the veteran----
    Mr. Walz. That is correct.
    Secretary McDonald [continuing]. And then have you help us 
get the people we need to get it done.
    Mr. Walz. I appreciate it. Thank you for the time, 
Chairman.
    The Chairman. Well, and I think part of the problem is, and 
we are looking backwards. But we were never asked for 
additional resources in order to deal with the presumptive 
claims that were added in the past. And so, I mean, we are more 
than willing to help. We were not asked. And then all of a 
sudden there was a backlog, and folks were using that as an 
excuse for the backlog. And we just, we need to work our way 
through it. So I agree with Mr. Walz, and with the Secretary as 
well. Mr. Huelskamp?
    Dr. Huelskamp. Thank you, Mr. Chairman. This is an 
excellent topic for us to discuss. It is something obviously we 
wanted to happen last summer, and a chance to actually get down 
into it. So Mr. Byrne, I appreciate that. I am struck, though, 
by some of the words that are used in here. And Mr. Secretary, 
I appreciate you being here. But looking at this independent 
assessment, and I know it is a lot of pages, Mr. Secretary, if 
I missed that. How much have you read of this assessment?
    Secretary McDonald. I have read all 4,000-plus pages. How 
much have you read?
    Dr. Huelskamp. Excuse me?
    Secretary McDonald. How much have you read, sir? I have 
read 4,000 pages.
    Dr. Huelskamp. Well, good. That is your job.
    Secretary McDonald. That is my job.
    Dr. Huelskamp. And your job is to take a culture of non-
accountability on. There is a culture of silence. Do you 
disagree with that assessment? That folks are reluctant to 
speak up because of your lack of leadership?
    Secretary McDonald. Last September there were people who 
were unwilling to speak up. That is the reason I have been to 
over 200 facilities, done town hall meetings in all of them. 
And I was----
    Dr. Huelskamp. Does it still occur? That is the question. 
Could you answer the question please?
    Secretary McDonald. What was the question again?
    Dr. Huelskamp. Is there a culture, do you disagree with the 
assessment that there is a culture of silence that your 
employees are afraid to speak up?
    Secretary McDonald. I disagree with that. In the town hall 
meetings I have----
    Dr. Huelskamp. Do you disagree with the fact that you are 
still in the midst of a leadership crisis at the VA?
    Secretary McDonald [continuing]. Employees are willing to 
speak up.
    Dr. Huelskamp. Assessment, you are in the midst of a 
leadership crisis.
    Secretary McDonald. I am in the midst of a leadership 
crisis. That is the reason I brought on 13 of 18 new leaders, 
and that is also why I am asking you to step up and provide the 
support we need for the demand that we are facing.
    Dr. Huelskamp. Do you need more staff in your headquarters 
program office? Is a 160 percent increase in five years, is 
that not enough to take----
    Secretary McDonald. I just want to, I saw that in the study 
as well. And I refer back to a letter I wrote the Chairman on 
September 14th of 2014 that talked about the fact that the way 
VA--actually, I am sorry, it is September 16th of 2014, that 
talks about the way VA codes these positions. Many of those 
people who show up in the headquarters staff are not in the 
headquarters staff. They do not live in Washington, DC. They 
are outside Washington, DC. The letter is right here. We can 
look at it.
    Dr. Huelskamp. So there was not a 160 percent increase in 
your staff in the----
    Secretary McDonald. No.
    Dr. Huelskamp. How much of an increase did you have?
    Secretary McDonald. The VA work force grew 36 percent 
between the end of fiscal year 2007 and through August of 2014. 
The largest growth was in positions that interact daily with 
our veteran population. Medically focused positions, such as 
nurses, physicians, medical assistants, and claims----
    Dr. Huelskamp. How much of an increase in the central 
office is my question.
    Secretary McDonald. About----
    Dr. Shulkin. I can just help a little bit about that. The 
largest increases, Congressman, were essentially where field 
positions were aggregated and then moved into the central 
office. That was 420 positions between workforce management, 
between logistics and procurement, and emergency preparedness. 
So while there was an increase between 2009 and 2014, it was 
not nearly as large as 160 percent because it was an 
aggregation of field positions to the central office.
    Dr. Huelskamp. The assessment also compares the VHA to 
other nationwide or regional providers. And the comparison that 
caught my interest, Mr. Secretary, was of a provider that cares 
for almost 3.3 million more patients but does it with 114,000 
less employees and 1,800 less physicians. Can you explain why 
you need 114,000 more employees to take care of 3.3 million 
fewer patients?
    Secretary McDonald. As you know, our patients typically 
have very complex situations. Many of them have been created by 
the battlefields that they serve on. So it is very difficult. 
And I think most of the studies that have been done, including 
the Congressional Budget Office study, find it very difficult 
to compare what goes on in the private sector and what goes on 
in VA. And maybe Dr. Shulkin would like to add, because he has 
been in both.
    Dr. Shulkin. Well, you know, first of all part of our job 
is to figure out how we can always do things better and more 
efficient. So I do not want to say that we are not always 
looking at that. But coming from the private sector, we are 
doing things in VA that are not done in the private sector. We 
are addressing many, many more behavioral health, psychological 
issues. We are addressing caregivers. We are addressing 
homelessness. We are addressing services in our VETS centers 
that just do not exist out in the private sector. So the 
comparisons are hard to make----
    Dr. Huelskamp. Let me ask Mr. Byrne, who actually wrote the 
assessment, does that comparison make sense? Or----
    Mr. Byrne. So the comparison I believe you are talking to 
is probably with Kaiser. I have to go back and look at the 
data. But there are several different aspects to make the 
comparison. One of them is that there is an adjusted risk for 
the different patient populations, and the veterans are 
different, sicker, and older than other populations. That is 
one factor. We did not do that risk adjustment. Secondly, to be 
quite honest, the number of missions in the VHA are much more 
complex than in the private sector. We mentioned R&D-- that is 
a massive, $1 billion to $2 billion of research a year they do. 
You are also talking about the training of 120,000 people 
annually.
    In the example of Kaiser, they are laser focused on just 
healthcare. And that makes their ability to have efficiencies 
and focus much, much easier. Now if they took on those other 
things, I do not know if they would be more efficient or not, 
but that is why it is very hard. And remember also, Kaiser is 
one of the high-performing healthcare systems. The reason we 
went to those is because when we----
    Dr. Huelskamp. So, and I am out of time. Why did you use 
that comparison if you have no basis to make the comparison?
    Mr. Byrne. The----
    Dr. Huelskamp. I did not read the 4,000 pages, and----
    Mr. Byrne. The reason----
    Dr. Huelskamp [continuing]. Could you explain that?
    Mr. Byrne [continuing]. When we compared VHA with the 
private sector, they are about average. But we saw a large 
variation that was unacceptable. So we said the only way to 
make that variation go away is to get the best performing 
practices. And that is why we shifted midway and said let us 
start looking at the highest-performing healthcare 
organizations and make that the bar for VHA. Because that is 
the only way we felt you could liminate the variations. If VHA 
is already about average, those variations are going to be 
maintained if average benchmarks are their bar.
    Dr. Huelskamp. So in summary you cannot compare them? Is 
that your assessment?
    Mr. Byrne. I cannot do a comparison.
    Dr. Huelskamp. Okay. Thank you, Mr. Chairman.
    The Chairman. Thank you. Mr. McNerney.
    Mr. McNerney. Thank you, Mr. Chairman. I want to thank you, 
Mr. Secretary, and I applaud your efforts for taking sort of a 
systemic look at this, maybe a 50,000-foot view. Because I 
started with this committee in 2007. We have seen the budget 
increase greatly at that time. And we have seen some 
improvement. For example, the disability claims have improved. 
There still needs improvement. But then all of a sudden this 
crisis in healthcare pops up. It seems like it is a whack-a-
mole. You hit one thing really hard and some other problem pops 
up. So a systemic look at this is really needed and I 
appreciate that. Do you agree that a systems approach is the 
right approach moving forward?
    Secretary McDonald. Yes sir, I do. I think one of the best 
business books ever written was The Fifth Discipline by Peter 
Senge. He devotes a lot of time in that book to systems 
thinking. I am an engineer. I am a systems thinker. And I 
would, I like the systems approach that the independent 
assessment took. The only thing I would have liked more is if 
that independent assessment included in the system Congress.
    Mr. McNerney. Is there any way to get them to add that 
assessment?
    Secretary McDonald. Well, I have made some suggestions. 
Their proposal was an independent board. I think, what I 
believe is that this is a unique moment in time. We have got 
two great committees with two great chairmen. We have got 
unanimity in the country. Let us work together. I think we can 
get it done without the board. And by the time, we will get it 
done before the board gets set up.
    Mr. McNerney. Well one of the problems in that interaction 
between Congress and the VA is, in my opinion anyway, we have 
hearings and it is not clear that we are being told the whole 
story. I mean, we can ask a specific question and we will get a 
specific answer, but they will avoid the greater problem that 
may be something that we can help with. So we need a better 
level of communication between our two bodies.
    Secretary McDonald. We, sir, we want you to know all the 
problems. And believe me, even though we have made some 
progress it is just some. We have a lot more to do.
    Mr. McNerney. Granted. The independent assessment looked at 
the demographics of veteran populations and stated that only 
half of the veteran population uses the VA healthcare. What 
tools do you have available to help capture more of the 
veterans that could use healthcare?
    Secretary McDonald. We had developed an advertising 
campaign with the Ad Council. I do not know how familiar you 
are with the Ad Council?
    Mr. McNerney. Right.
    Secretary McDonald. But the Ad Council does pro bono work, 
where companies put money in. We had done an independent 
campaign to encourage more veterans to sign up. We have not 
aired that campaign completely yet because we need to build the 
capability to make sure we can take in those more----
    Mr. McNerney. So have you had an independent assessment of 
the return on investment that you have made in that?
    Secretary McDonald. We have not yet. You know, we have done 
testing, the Ad Council did testing at their cost to show that 
the ads were effective but we have not done any piloting of it 
to see how many people would come into the system. As I said 
earlier, and Dr. Giroir supported this, veterans are only using 
the system for about 34 percent of their care. And every 
percentage point is $1.4 billion. So we have to be careful as 
we bring more people into the system that we can take care of 
them.
    Mr. McNerney. All right. Thank you, Mr. Chairman. I am 
going to yield back.
    The Chairman. Thank you. Mr. Secretary, is it your job to 
make sure that veterans receive healthcare? Or that veterans, 
more veterans come into the VA system?
    Secretary McDonald. Well I think it is to take care of 
veterans. I mean, that is what I am here to do.
    The Chairman. So if they are getting their healthcare 
somewhere else, they are getting----
    Secretary McDonald. Well if a veteran wants to get his 
healthcare somewhere else, that is fine with us. We are here 
for them. And as the VFW showed, you know, 82 percent choose 
the VA, 87 percent recommend the VA. So you know, we are here 
for them and we want to build the capability for the number 
that come.
    The Chairman. And so my question is, is the ad focused on 
getting people to come back into the system? Or is it to get 
people who are not getting healthcare at all----
    Secretary McDonald. I am sorry. No, it is to teach them how 
to sign up on eBenefits.
    The Chairman. Okay. So they are not even----
    Secretary McDonald. They are not even in the system.
    The Chairman. But, well it is a conversation that we need 
to continue.
    Secretary McDonald. Well, we do. Because we need to, as we 
have talked, we really need to talk about demand or 
requirements versus support. And----
    The Chairman. And you talk about people coming to the VA 
because they like the VA and it delivers the best and the most 
quality healthcare. And you hear anecdotal evidence out there, 
too, that many veterans are going to the VA because you have no 
copays.
    Secretary McDonald. Well that is also true.
    The Chairman. So I mean, that needs to be part of the 
discussion as well. Dr. Wenstrup.
    Dr. Wenstrup. Thank you, Mr. Chairman. And I thank you all 
for the hard work that you have put in here today. One thing I 
would like to address. Ms. Brown, I think in this committee 
there is no elephant in the room. I think that everyone wants 
to keep the VA up and running. But we can have the conversation 
about centers of excellence. And I do think that there are 
things specific to military duty that create the need for these 
centers of excellence. But we also talk about how veterans have 
so many comorbidities. We have to be able to address those as 
well, which is unique compared to a private practice. And I 
also feel that we can have what we call VHA providers, VA 
providers, outside the walls of the VA and sort of break down 
that stigma as you are not a VA doctor but you can be outside 
the walls. And I think we will all benefit from that.
    I especially liked the analogy today about anatomy and 
physiology, that we may have too much anatomy and not enough 
physiology. You know, we can have a lot of, we can have a lot 
of anatomy but if the heart rate is 30 it does not really help 
much, right? So looking in that direction.
    But really, Dr. Giroir, I appreciate what you have come 
here and talked about today because it is something I have been 
talking about for three years, really taking a look at how we 
do our business. And it is nice today, for example, that some 
of the things are going to DoD. But as someone who has been in 
VA and DoD, they have some of the same issues as far as 
productivity. Because I know as a practitioner and Reservist, I 
will see 50 patients in my practice but 15 in the DoD. And it 
is not because of comorbidities and sicker patients, 
necessarily. So there are some areas where that applies and 
others where it does not.
    And so when we talk about increasing our numbers and we got 
more appointments, we have to take a look at what we are really 
doing. Are we just extending hours or adding more providers? Or 
are we actually increasing the productivity for the providers? 
And I think that that is a key component, and it sounds like we 
are talking about it.
    And in the VA it is different, too, because most VAs are 
involved with education and training. That slows you down. 
There is no doubt about it. We all know that in our practices. 
But that, but still if we are talking about increasing to match 
the private sector to some degree, you know, eight percent, 
that sounds nice. But when we are talking 200 or 300 percent 
higher in the private sector, obviously there is a lot more we 
can do.
    So I do applaud the decrease in wait times, the efforts 
being made, and actually finally having the frank conversation 
that I have been wanting to have for three years, of how we 
actually improve the capabilities of our providers all across 
the board.
    One of the things that Dr. Abraham referred to, and you 
have heard me to refer it, Mr. Secretary, is about the RVUs. 
You inherited a system that really could not tell you what we 
are spending per RVU. And need to do that if we are really 
going to compare the cost of outside the walls of the VA and 
inside the walls of the VA. And until we can do that we really 
cannot make good assessments of what makes sense. We need to be 
able to assess our physical plants. I am encouraged to hear you 
say things like, yeah, if you are a doctor with one treatment 
room you cannot be productive. It just does not work. So we 
also need to look at total cost per RVU, then we can start 
looking at facility cost per RVU, whether it is a CBOC, or 
whether it is a hospital setting, and specific clinics per RVU. 
Then we can make some smart decisions.
    So I guess the only question I really have is are we 
getting closer to being able to do that?
    Dr. Shulkin. Yes. Congressman, we do have RVU data. We have 
work RVU data. And work RVU data is directly comparable because 
it is the time and effort a physician puts in before, during, 
and after the visit. And so that is where we can show you the 
comparisons. It is not 200 or 300 percent difference, but you 
are correct. The private sector has higher RVUs than the VA. 
Several reasons for that that you have mentioned, our staffing 
ratios are far lower than they are in the private sector. We 
can begin to start getting at the cost issue but this is where 
it gets to is the work that we are doing in VA comparable to 
the work that is happening outside in the private sector, 
dealing with the pure physical components of care? But we are 
working towards that. Our commitment is to get the best value 
for the taxpayer and do the right thing for the veterans. So we 
are focused on efficiency and productivity, as well as quality 
of care.
    Dr. Wenstrup. Well when I talk about cost you understand I 
am talking about----
    Dr. Shulkin. Yes.
    Dr. Wenstrup [continuing]. The physical plant, the 
administrative costs, all those things. Because when you refer 
outside of the VA, you are not paying their malpractice and 
their physical plant. You are just giving that fee for what 
they did, similar to what Medicare does to a provider. And that 
is what we have to take into consideration. And I know that is 
a behemoth. But we really have to be able to look at those 
types of numbers to make logical decisions as we move forward. 
And I am talking about over the next decade.
    Dr. Shulkin. Yes. I agree with you. We are looking at those 
things. Medicare does reimburse on more than the work RVU. They 
reimburse on the total cost RVU, because there are three 
components to RVUs that are calculated when you are paid. And 
VA has different infrastructure requirements than the private 
sector. But I do believe that you are pushing us in the right 
direction to take a look at these issues and we are committed 
to doing that.
    Dr. Wenstrup. Thank you very much. I yield back. Thank you, 
Mr. Chairman.
    The Chairman. Thank you. Ms. Brownley, you are recognized.
    Ms. Brownley. Thank you, Mr. Chairman. Mr. Secretary, good 
to see you again. Thank you to all of you for the hard work 
that you have done to bring us this report and I apologize for 
being late. I was in another important hearing that I had to 
attend.
    But I wanted to ask Dr. Giroir a question. The assessment 
refers to a longstanding truth in the veteran community, if you 
have seen one VA hospital you have seen one VA hospital. And of 
course we want to be as veteran-centric as possible. And 
certainly our veterans expect some level of standardization 
when it comes to not only intake but obviously their 
healthcare. So what are the most important recommendations, do 
you think, your report makes to ensure that veterans have a 
consistent experience within the VA system?
    Dr. Giroir. Thank you again for that question. I think it 
is a very important one. In addition to the four cornerstones I 
think a main principle here is, and again no veteran cares 
about what the average is. The veteran patient cares about the 
experience of that patient. But on average the VA does pretty 
well compared to the private sector. But the variability is 
tremendously wide. So there are fantastic, wonderful, national 
leading practices, but there are also VA medical centers that 
lag far behind the leading practices within the VA. And one of 
the recommendations that I think is obvious, or should be 
obvious and probably is obvious to the leadership panel, is 
there needs to be a transparent, open process to share best 
practices, to encourage innovation, that are in the VISNs. And 
if we focus on bringing the underperforming centers up to the 
level of the higher performing centers, you are going to have a 
system that is nationally, could be nationally leading and 
certainly comparable to the best ones. So one of the most 
important things is, yes, if you have seen one VA, you have 
seen one VA, and that has to change because a culture of best 
practices needs to be developed and shared. And that is one of 
the primary recommendations of the panel. And I see everyone 
shaking their head.
    Secretary McDonald. Well this was the number one 
requirement when David and I, when I was recruiting David for 
this position, is we simply have to do this. We have pockets of 
excellence but we have got to get everybody up to that 
standard.
    The other thing we have to do is we have to do a better job 
with the employee experience, and I want to share this with 
you. Last week we took our top 300 leaders of VA offsite for 
training for three days. It is the first time they have ever 
been together for training, even though this is what you do in 
the private sector all the time. This is a map of the veteran 
experience for the C&P exam, compensation and pension exam. So 
there is technology that exists where you actually map the 
experience. You map the backstage, which is what is in the 
veteran's mind. You map the onstage, which is what happens when 
you work with them. And you map the backstage, which is what 
you do in the backstage to make sure they have a great 
experience. And then you design your facilities consistent with 
this. So we had people offsite, remember the first strategy of 
my VA is to improve the veteran experience. We are mapping 
these experiences and improving them using Lean Six Sigma in 
the backstage and using design thinking in the front stage. 
This is what the very best companies in the world do, and this 
is why we have to train people.
    Ms. Brownley. So will that be a benchmark, if you will, in 
terms of identifying the lower performing facilities?
    Secretary McDonald. Yes. This is a technology we were going 
to use to redesign our experiences in every facility across VA 
and then we will have, we will take the current best approach 
and we will make sure everybody does that current best 
approach.
    The reason we started with the C&P exam is that is 
typically the worst experience a veteran and a VA employee can 
have and it is also oftentimes the first time VA touches a 
veteran.
    Ms. Brownley. And so do you have an identification now of 
the lowest performing, the best performing----
    Secretary McDonald. Yes. David can talk about that.
    Dr. Shulkin. Yes. I just want to reinforce what Dr. Giroir 
said. VA overall has lower mortality rates than the private 
sector hospitals do. VA overall has better patient safety rates 
than overall sectors do. But the variation is certainly there. 
And I think as Dr. Giroir suggested, if we could bring 
everybody up a level, and we saw 44 percent of our medical 
centers actually improve their quality metrics last year, we 
could have an extraordinary healthcare system. And that is what 
we are designing to do. So our metrics now identify high 
performers, low performers. We know that. We are working with 
the low performers to get their performance up. That is exactly 
where our focus is, one of my top priorities to identify best 
practices.
    Ms. Brownley. Thank you, and my time is out. I will yield 
back, Mr. Chairman.
    The Chairman. Thank you. Dr. Benishek.
    Dr. Benishek. Thank you----
    The Chairman. I am sorry. I am sorry. Mr. Coffman.
    Mr. Coffman. Thank you, Mr. Chairman. Secretary McDonald, 
the President recently signed into law a piece of bipartisan 
legislation that essentially transferred the VA's construction 
program for projects costing more than $100 million to other 
agencies such as the Army Corps of Engineers. As you know, 
there have been billions of dollars of waste in the VA's 
construction management program that could have been diverted 
towards veteran healthcare and other benefits. Are there other 
areas that you could look at in the VA that is really not your 
core mission, like construction management, that could go to a 
private entity, such as claim processing for purchased care, 
something that TriCare and Medicare have been successful with?
    Secretary McDonald. Thank you for the question, Congressman 
Coffman. We are looking at that as part of our My VA 
transformation to see what it is we should do in our core 
business, what it is perhaps we should not do. But you know, 
the building thing is even more than that. I think, you know, 
if I look at the problems with the building and I include the 
Aurora facility, each one was designed as a one off. If Walmart 
builds a new store in Japan, that Walmart store in Japan looks 
very much like the Walmart store in the United States. As a 
result, if you transfer somebody from Walmart U.S. to Walmart 
Japan, they know how to operate in that store. So not only your 
construction costs less, because you keep building it, but your 
operating costs are less because people know how to operate in 
it. So one of the things we are doing with our construction, 
and I know we are, you know, we have got to work with, we will 
work with the Corps of Engineers over $100 million, is even 
what is under $100 million is how can we go to a modular design 
so that every facility is built the same and we can transfer 
people from one to the other and they can operate? And 
importantly, our patients will know where to go. I mean, 
consumers love shopping in stores where they know how to 
navigate the store. So I think, I think there is a much bigger 
idea in construction than just giving it to the Corps of 
Engineers. I think we have more work to do.
    Mr. Coffman. And I think also reviewing some of the 
requirements that you have in terms of force protection and 
other, you know, renewable energy requirements that are nice to 
have but that are over the top relative to what is done in the 
private sector. And I think, and clearly are driving costs as 
well.
    Secretary McDonald. Yes. As you know, those are federal 
laws, federal requirements----
    Mr. Coffman. Right.
    Secretary McDonald [continuing]. And we will work with you 
on those.
    Mr. Coffman. Okay. Mr. Giroir, I thank you. Would you like 
to comment as well on the, what could be outsourced from the VA 
that might be more effectively done?
    Dr. Giroir. Again, thank you for the question. And the 
report was fairly comprehensive, particularly in the business 
systems that need to be fixed one way or the other. For 
example, claims processing probably left almost $600 million--
--
    Mr. Coffman. Right.
    Dr. Giroir [continuing]. In reimbursement on the table from 
2014. The lack of automation in reviewing bills from the 
private sector. If you want networks to come and private 
physicians to see VA patients, they expect at least at some 
point in time to get reimbursed for their services. So these 
are all aspects that we would hope there would be a critical 
analysis of either doing it in house or certainly there are 
precedents for outsourcing these kinds of business functions to 
get the efficiencies and ultimately divert that money back into 
patient care.
    Mr. Coffman. Okay. The integrated report notes that VHA is 
in the midst of a leadership crisis according to this report. 
It said, quote, in almost every facility visited at least one 
leader interviewed mentioned that risk aversion and reluctance 
to, quote, unquote, speak up were a significant issue, unquote. 
This retaliatory culture permeates across all levels of VA and 
this committee has seen countless examples of retaliation 
against agency whistleblowers. Mr. Secretary, how are you 
dealing with the leadership crisis and the problems within the 
culture of the VA?
    Secretary McDonald. This is a big issue. Number one, we 
have got to get the leaders in place. Right now 90 percent of 
our medical centers have had a change in leadership, but we are 
committed to that. David can talk about that in a minute.
    Number two is we have got to make it perfectly clear what 
kind of culture we want, and where we identify people 
retaliating against whistleblowers, we are disciplining them.
    Number three, we have been working with the Special Counsel 
to make sure that the 45 or so whistleblowers get restitution 
in a positive way within our organization. And I met with the 
Special Counsel just this week and we discussed this. How can 
we do a better job of this?
    Number four, we have been certified by the Office of the 
Special Counsel for doing the training that we need to do to 
improve on this.
    Number five, town hall meetings. We have got to have town 
hall meetings. We have got to get the light shined on these 
kinds of things. We have got to listen to employees. And then 
importantly I also meet privately with the whistleblowers and 
the union leaders when I go to every site.
    Dr. Shulkin. Congressman, I would just add to what the 
Secretary said, we do have a crisis in leadership. We have too 
many open vacant positions. We have too many people in acting 
positions and interim positions. You cannot expect that you are 
going to have a transformation in a health system unless you 
have stable leadership in place. We need your help on this. We 
need your help to help create the VA to be an environment 
people want to come and serve and to be excited about. And we 
are asking for your help in Title 38 for the hybrid Title 38 to 
be able to help get the right type of compensation for 
leadership positions in VA. That will help us a lot.
    Mr. Coffman. Okay, thank you. I think that one issue, and I 
will yield back, that we are divided on as a Congress, and I 
think you are all divided on as well, and that is the need for 
personnel reform. The need to be able to within the entire 
organization to fire those who are, to expeditiously get rid of 
those who are incompetent, those who are not performing, those 
who have committed fraud, to be able to get rid of them. It is 
simply too difficult. There is a, I think the principal problem 
in the culture of the organization is that it is too difficult 
simply to get rid of those who are not performing. Mr. 
Secretary, when you were at Proctor and Gamble clearly you did 
not have, I think you had a more balanced approach in that 
environment than exists here and it needs to change. Mr. 
Chairman, I yield back.
    The Chairman. Thank you. Dr. Benishek.
    Dr. Benishek. Thanks.
    The Chairman. You are welcome.
    Dr. Benishek. I just want to touch on a few specifics that 
I think, that came to my attention from the report. And 
something you brought up, too, Mr. Secretary. And you 
mentioned, you know, using more leases to use the space. Well 
that just reminded me of the, you know, the CBOC that we are 
trying to expand in my district in Traverse City, and then the 
leasing process is like five years long. And you know, if there 
is a way that we can help you speed that up, because that is as 
long as a construction process. So I, and I know there is a lot 
of bureaucratic reasons for that but I think that is an issue 
that practically would help.
    Secretary McDonald. We agree. And we are now going through 
a Lean study on that process, and we will be back to you with 
the help we need.
    Dr. Benishek. I am going to just kind of mention another 
issue, and that is about this nursing practice guidelines 
within the VA. You know, there is a lot of concern, you know, 
as a surgeon from the anesthesia department, independent 
practice of nurse anesthesia, there does not seem to be any 
additional information about nurse anesthesia safety versus 
the, you know, the family practice type nurse practitioners. I 
guess can you tell me what the situation is with that? I just 
want to make sure that our veterans are safe.
    Secretary McDonald. We put together a new nursing handbook 
which is now online for comment. I did get quite a few letters 
from members of Congress, particularly doctors, who thought 
that a nurse practitioning anesthesiology was going too far. We 
have noted that on the website. On the other hand I have also 
gotten letters from nurse practitioners who say we should take 
full advantage. There are some studies available out there, one 
of which I think is a DoD study that says the safety is the 
same if not better. But I am out of my medical school. Let me 
let----
    Dr. Benishek. Just let me know where you are at. Let me 
just go on to another issue. Dr. Shulkin, what exactly, can you 
give me an example of how you are taking the environment where 
we have this, some good hospitals and some good directors and 
some good processes, and then the variability? What have you 
done so far on the job, I know you just started a little while 
ago, to make this better? To get the best practices from one 
facility to another? Can you give me a specific thing? Because 
we have touched on this issue many times here in our 
discussions here, and I just want to get some ideas, 
specifically what have you done to make that better?
    Dr. Shulkin. Yes. As I mentioned before, we have a 
measurement system that we call SAIL, which is a metric system 
that puts together all of these quality measures so we can 
identify high performers and low performers. Then we are 
putting the high performers together with the low performers. 
We are actually going on site with the low performers and 
sitting down with their leadership team to make sure they 
understand what the data says, understand the reasons why they 
are not able to adapt to the best practices, whether it is 
hiring reasons, competency reasons, training reasons. And----
    Dr. Benishek. What level are we talking about here now? Is 
this the department director? Or is this, I mean, can you give 
me a little more specifically----
    Dr. Shulkin. We have out of our central office, we have a 
quality organization that are led by physicians. Those 
physicians actually travel to the sites of the low performers. 
They bring the data. They meet all day with the leadership 
team. They set an action plan in place. And then they revisit 
whether there is improved performance. They are using what 
really the independent assessment has recommended, a continuous 
quality improvement process cycle but where we are setting 
goals and objectives. And we are using the strengths of the 
best practice sites to help teach the lower performers. And 
this is why we saw 44 percent of our medical centers make 
significant improvement over the last year.
    Dr. Benishek. Well I just want to relate one anecdotal 
problem to you as long as I have your attention here, too. And 
that is I still have contacts within the VA system from 
physicians who relate to me that they tried to improve, for 
example, the colonoscopy performance rate. And yet they are 
being pressured by the peer review process to not complain so 
that the discipline does not appear to be related to the 
complaints but to something different in their practice mode. 
And I just wanted to be sure that you are aware that that is 
going on. And I mean, I get a lot of complaints from VA 
physicians about that issue.
    Dr. Shulkin. Right.
    Dr. Benishek. So I just wanted to bring that to your 
attention today.
    Dr. Shulkin. So I appreciate that. I have yet to meet 
doctors that are afraid to complain. So they are usually pretty 
good, particularly when it deals with patient issues. So I 
always encourage doctors to speak up and----
    Dr. Benishek. Well, I mean, to me that is very important. 
Because we provide information that leads to better care and 
faster and more efficient care. And we just like to see those 
changes implemented rather than punished.
    Secretary McDonald. If you get those calls please have them 
call David or me and we would be happy to jump on them.
    Dr. Shulkin. Yes.
    The Chairman. Gentlemen, thank you very much for being here 
today. Thank you for the work that you have all done, both on 
this $68 million study. And Mr. Secretary, honestly, we thank 
you for what you do. Dr. Shulkin I think is a great partner in 
this process. I think you want to do the right thing. I think 
many of us are still concerned that the culture within the 
system is so hard to break. I do not know that there is a buy 
in yet at the mid-level. As it relates to construction of 
facilities, as you said, to build one in Japan versus on the 
United States, I think that is the appropriate, many schools do 
that so that they are all the same. And I just, you know, we 
want to be a partner in this process. We do have to look 
backwards in order to go forwards as well, and I know that is 
not what you would like to do. But we do not want to get into 
the mess that we found ourselves in over a year ago. This 
committee is in a bipartisan fashion committed to working 
together to give you the tools that are necessary to serve the 
veterans of this country.
    Without objection all members would have five legislative 
days with which to revise and extend their remarks or add any 
extraneous material. And Ms. Brown would like to say something.
    Ms. Brown. Absolutely, Mr. Chairman. Let me thank the 
witnesses for being here. I want to thank the Chairman for 
agreeing to the committee taking a field trip to Denver 
Regional Complex Center. We have had lots of discussions and I 
think it would be good for the Committee to go and visit with 
the facility. I think it will be good to stop by New Orleans to 
see how the medical facility is progressing also. I am very 
interested in the last closing remark about you are on track 
concerning homelessness. One of the problems I found when I 
went to L.A., West L.A., is that 400 units have been vacant for 
over two years because the state did not have the funds even 
though we had provided the grant. So in those studies did VA or 
the state look at some of our partners, like different states, 
as VA moves forward? States holders play a vital role in making 
sure that we move forward with the veterans programs.
    Secretary McDonald. We have fixed that and in fact Mayor 
Garcetti recently announced I think it was $100 million that he 
is putting against homelessness in L.A. If we do not fix the 
problem in L.A. we will not fix it nationally. So we are all 
laser-like focused on it.
    Ms. Brown. Thank you. Mr. Chairman.
    The Chairman. Thank you, Ms. Brown. And for the record, I 
saw the Secretary's eyes get wide a second ago. I was not 
talking about a full committee field hearing out at the Denver 
regional facility. What I was doing was saying Ms. Brown is 
welcome to go out there any time she would like to. At this 
time, this hearing is adjourned.
    [Whereupon, at 12:09 p.m., the committee was adjourned.]

                                APPENDIX

               Statement of Ranking Member Corrine Brown

    Thank you, Chairman Miller.
    Last year in the Veterans Access, Choice, and Accountability Act of 
2014 we mandated that there be an Independent Assessment of veterans' 
healthcare. This morning's hearing is on the results of that 
Independent Assessment.
    The Assessment highlighted many of the things we hear from our 
veterans. We hear that VA provides excellent healthcare, especially 
healthcare related to the special needs of our veterans. We also hear 
that in certain areas, VA is at the forefront of healthcare in this 
country.
    We also hear from our veterans that VA care is often fragmented, 
and that it can be difficult to navigate and arrange non-VA care. We 
hear of long wait times and limited access.
    For us on this Committee, the results of the Assessment are not 
new. Over the years we have seen a system become mired in bureaucracy 
and be required to do more when sometimes the resources to do more have 
not been made available.
    What the Independent Assessment provides us with is a detailed, 
thorough, and fair look at where the Veterans Health Administration is, 
and the steps we must all take to get it back on the right track and 
focused on veterans.
    What is clear is that if we are to meet our promises to our 
veterans, we must begin to look at reform. This reform must enable VA 
to focus on healthcare and operate, like the Secretary has previously 
stated, as a business. And the business of the Veterans Health 
Administration must be a clear and unwavering focus on the veteran 
patient.
    The Independent Assessment points out that piecemeal fixes and 
legislation targeted at only one issue will not cut it. VHA needs a 
complete overhaul--from the way it schedules and delivers care to 
patients, to the way it treats its employees, to the way it partners 
with community providers.
    It is approaching two decades since VHA last underwent a major 
reform effort. We must now begin the work of ensuring that VA 
healthcare is poised to meet the challenges of healthcare today, and 
the Independent Assessment will help us in that endeavor.
    I look forward to hearing from the Secretary what steps he has 
taken to begin the reform process, and to hear from our other witnesses 
on how we can work together to ensure that the healthcare our veterans 
receive is the very best.
    Thank you Mr. Chairman, and I yield back the balance of my time.

                                 

                       Statement of Hon. Phil Roe

    I have been trying put together a summary of my experience with the 
Veterans Choice Program (VCP) and to get the perspective of both the VA 
and TriWest employees since they each blame each other. I am hoping 
somewhere in the middle lies the answer as to where the problems are 
occurring. Because I have been given so many different answers on how 
this step by step process works, I called the Non VA Care office at our 
VA Medical Center to talk to the people actually doing the work. One of 
the staff members, who was very receptive over the phone and had many 
examples to share, had planned to give me an outline of the process 
along with some of the problems they experience, but instead was told 
to refer me to Public Affairs, who cannot give the answers we need to 
solve problems.
    There are two ways that a Veteran can become eligible for care 
under VCP provisions: (1) 30-day wait list and (2) Resides 40-miles or 
more from nearest VA medical facility. Most of the problems I see 
involve the 30-day wait list.
    Below is information which has been given to me since the rollout 
of this program. In my experience, there appears to be a breakdown 
somewhere in this process but have been unable to get any clear answers 
on how to fix it. VAMC blames TriWest and TriWest blames VAMC.

         Eligibility is determined by VAMC/primary care doctor 
        (if appointment is 30 days past the clinically indicated date)
         Non VA Care staff then uploads list of eligible 
        veterans to VA's Central Office nightly & the veteran is told 
        to wait 5-7 days and then call TriWest
         Central Office then sends the information to TriWest, 
        which can take 3-7 days.
         Consults do not get submitted, medical documentation 
        doesn't get uploaded, and authorizations get canceled leaving 
        the veteran on a merry-go-round with VAMC & TriWest.

TriWest Perspective

    The Veteran's servicing VAMC sends a notification to TriWest 
indicating that the Veteran has waited 30 days or is expected to wait 
30 days or more for a specific type of care (podiatry, cardiology, 
neurology, orthopedics, dermatology, etc.). At the same time the 
notification is sent or soon after, the servicing VAMC sends a 
consultation to TriWest indicating what type of care the Veteran needs 
in the previously indicated specialty. Once these two criteria have 
been met, a TriWest patient services representative (PSR) contacts the 
Veteran to inquire about his or her appointment preferences and then 
searches for a provider that can meet the Veteran's needs in terms of 
appointment timeliness and a travel distance that falls within the VA's 
access to care standards. Once the appointment is made, the Veteran is 
notified and TriWest arranges for the provider to receive from the 
Veteran's servicing VAMC the appropriate medical records pertaining to 
the care being sought. An important thing to note regarding 30-day wait 
list notifications is that under this provision, the Veteran is only 
permitted to be appointed in the specialty for which he or she has been 
waiting 30-days or more for an appointment. If the provider the Veteran 
was appointed to see feels that additional care is needed, that 
provider must submit to TriWest a secondary authorization request (SAR) 
that TriWest would then forward to the Veteran's servicing VAMC for 
consideration. Any additional appointing depends on the VAMC response.
    Network of physicians is a problem.
    Need more staff.
    VAMC perspective:
    Non VA Care staff were given no training or SOP on this program and 
they are basically ``winging it''.
    Our local Non VA Care staff was 5 - increased to 15 and still 
struggling to meet demands of thousands of appointments through the 
Choice Program. (There is talk of calling each patient for every 
appointment to make sure they want to keep it. If patient indicates 
they do NOT want to keep, VA staff will still be required to call them 
2 times/mth until the appt. date has passed to make sure they haven't 
changed their mind. This will be a waste of resources they do not 
currently have.)
    Outpatient clinics should be required to add patients to the 
electronic wait list rather than sending over to Non VA Care staff--
this causes delays for the veteran
    TriWest portal needs to be more user friendly for vendors; 
Secondary authorizations are a disaster.
    Private doctors do not like jumping through all the hoops of the 
Choice Program & are saying they must give up a % of their fee to 
TriWest in order for TriWest to file their claim with VA.
    Clinics (i.e. pulmonary, chiropractic) are closing at our VAMC 
because the doctors are fed up with everything going on.
    Non VA Care staff believes putting the funding back into Non VA 
Care and out of the hands of TriWest will alleviate these problems.


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