[Senate Hearing 117-207]
[From the U.S. Government Publishing Office]
S. Hrg. 117-207
A SYSTEM TO BETTER SERVE
AMERICA'S VETERANS: INVESTING IN VA'S INFRASTRUCTURE
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HEARING
BEFORE THE
COMMITTEE ON VETERANS' AFFAIRS
UNITED STATES SENATE
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
__________
JUNE 9, 2021
__________
Printed for the use of the Committee on Veterans' Affairs
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.govinfo.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
47-029 PDF WASHINGTON : 2022
COMMITTEE ON VETERANS' AFFAIRS
Jon Tester, Montana, Chairman
Patty Murray, Washington Jerry Moran, Kansas, Ranking
Bernard Sanders, Vermont Member
Sherrod Brown, Ohio John Boozman, Arkansas
Richard Blumenthal, Connecticut Bill Cassidy, Louisiana
Mazie K. Hirono, Hawaii Mike Rounds, South Dakota
Joe Manchin III, West Virginia Thom Tillis, North Carolina
Kyrsten Sinema, Arizona Dan Sullivan, Alaska
Margaret Wood Hassan, New Hampshire Marsha Blackburn, Tennessee
Kevin Cramer, North Dakota
Tommy Tuberville, Alabama
Tony McClain, Staff Director
Jon Towers, Republican Staff Director
C O N T E N T S
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WEDNESDAY, JUNE 9, 2021
SENATORS
Page
Tester, Hon. Jon, Chairman, U.S. Senator from Montana............ 1
Moran, Hon. Jerry, Ranking Member, U.S. Senator from Kansas...... 2
Tillis, Hon. Thom, U.S. Senator from North Carolina.............. 12
Hassan, Hon. Margaret Wood, U.S. Senator from New Hampshire...... 14
Tuberville, Hon. Tommy, U.S. Senator from Alabama................ 16
Murray, Hon. Patty, U.S. Senator from Washington................. 18
Brown, Hon. Sherrod, U.S. Senator from Ohio...................... 20
Blumenthal, Hon. Richard, U.S. Senator from Connecticut.......... 22
Blackburn, Hon. Marsha, U.S. Senator from Tennessee.............. 24
WITNESSES
C. Brett Simms, Executive Director, Office of Asset Enterprise
Management, Office of Management, Department of Veterans
Affairs........................................................ 4
Andrew J. Von Ah, Director, Physical Infrastructure, U.S.
Government
Accountability Office.......................................... 5
Patrick D. Murray, Director, National Legislative Service,
Veterans of Foreign Wars, Testifying On Behalf of the
Independent Budget Veterans Service Organizations.............. 7
Don Orndoff, Senior Vice President, National Facilities Services,
Kaiser Permanente.............................................. 9
APPENDIX
Witnesses prepared statements
C. Brett Simms, Executive Director, Office of Asset Enterprise
Management, Office of Management, Department of Veterans
Affairs........................................................ 28
Andrew J. Von Ah, Director, Physical Infrastructure, U.S.
Government
Accountability Office.......................................... 37
Patrick D. Murray, Director, National Legislative Service,
Veterans of Foreign Wars, Joint Testimony of The Independent
Budget Veterans Service Organizations, Disabled American
Veterans, Paralyzed Veterans of America and Veterans of Foreign
Wars........................................................... 54
Don Orndoff, Senior Vice President, National Facilities Services,
Kaiser Permanente.............................................. 62
Questions for the Record
Questions submitted by:
Hon. Moran..................................................... 67
Hon. Hirono.................................................... 84
Hon. Sinema.................................................... 128
A SYSTEM TO BETTER SERVE AMERICA'S
VETERANS: INVESTING IN VA'S INFRASTRUCTURE
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WEDNESDAY, JUNE 9, 2021
U.S. Senate,
Committee on Veterans' Affairs,
Washington, DC.
The Committee met, pursuant to notice, at 3 p.m., in room
301, Russell Senate Office Building, Hon. Jon Tester, Chairman
of the Committee, presiding.
Present: Tester, Murray, Brown, Blumenthal, Manchin,
Sinema, Hassan, Moran, Boozman, Cassidy, Tillis, Blackburn, and
Tuberville.
OPENING STATEMENT OF CHAIRMAN TESTER
Chairman Tester. I call this Committee to order. Good
afternoon, and I thank everyone for joining us today.
The VA's Fiscal Year budget request shows a steady increase
to support VA's various health benefits and memorial affairs
programs. We will review that budget in more detail at next
week's hearing. Today we are going to discuss the state of VA's
facilities and infrastructure.
The infrastructure funding requested by the administration
for years has been relatively flat, with sporadic one-off cash
infusions from Congress. As a result, today VA estimates its
unmet infrastructure needs total as much as $70.8 billion. The
need for action is clear, but today we have not had a plan from
VA on how to get there. Today I hope to explore how VA and
Congress can work together to deliver on that shared goal.
An agency as big, and with a mission as important needs
more certainty so it can staff, plan, execute, deliver, and
maintain facilities, whether they be in medical centers,
clinics, vet centers, VBA offices, or national cemeteries.
COVID-19 made VA's important role in responding to national
emergencies even more clear.
We are here today to examine VA's infrastructure needs, how
it is managing and delivering new facilities, and what Congress
can do to help. We also want to hear more about President
Biden's proposal for an $18 billion infusion in infrastructure
funds for the VA, as part of his American Jobs Plan. I think it
represents an important step but I have some questions and some
ideas as we move forward.
And I appreciate the administration's willingness to have a
dialogue on this topic. We all know that this is a bipartisan
issue. We know increased infrastructure funding for the VA has
been on the table for a long time. In February 2022, Secretary
Wilkie told us he was looking for $60 to $70 billion for the VA
in one of the infrastructure pushes from the last
administration. Well, that never came to be, and funding would
have likely been spread out over a 10-year window. But it
reinforces the notion that VA's infrastructure is a bipartisan
priority.
And let's be clear. VA's track record for managing and
delivering new facilities on time and on budget leaves much to
be desired, whether it is Denver replacement hospital or the
CBOC in Missoula, Montana, things take too long and often cost
more than they should. I am glad we are able to have an outside
perspective today from Kaiser, a very large health care system
in its own right, about how it manages its capital portfolio
and plans for growth.
We will probably also have some discussion on the AIR
commission, which is a complex and sensitive issue. From my
perspective, the AIR commission provides VA with an
opportunity. It is an opportunity to thoroughly review its
inventory needs and to make adjustments, where appropriate, to
support the VA's ability to deliver for veterans. But it cannot
be made into an effort to blindly close facilities or scale
back services for veterans. Under Secretary McDonough, I do not
think that will happen.
I am hoping VA makes this commission an opportunity to get
rid of the truly excess VA infrastructure that is not being
utilized, while building new, leasing new, building up or
right-sizing facilities so they are able to meet the long-term
needs of our veterans. Investments today in bolstering VA's
internal capacity to deliver facilities, cutting red tape to
help VA do its job, and providing smart, consistent funding
before, during, and after the AIR commission is absolutely
critical. With that I will turn it over to you, Senator Moran.
OPENING STATEMENT OF SENATOR MORAN
Senator Moran. Chairman Tester, thank you once again. It is
good to be with you this afternoon. I also want to welcome the
witnesses, and they will be providing testimony that I think is
important as a fundamental question for the Department of
Veterans Affairs. We also, as you indicated, there are systemic
problems for the VA in its infrastructure.
More than 7.2 million veterans received care from the VA
health care system last year in aging hospitals, clinics, and
health care facilities. The age and condition of VA facilities
demand that we do better. This is not a new problem. It has
been a reality for decades. It is troubling that the VA's
discretionary appropriations, including collections, increased
291 percent from Fiscal Year 2003 to Fiscal Year 2021, now
totaling $109.5 billion. Mandatory outlays increased $32.4
billion in that same timeframe, to $133.8 billion, represent a
313 percent increase. Yet, infrastructure needs go unmet and
veterans continue to receive health care in dilapidated VA
buildings.
More focus is needed on the VA's business process that
produced this disappointing state of affairs. We cannot confuse
what infrastructure means. Infrastructure is concrete and
steel, operating rooms, exam rooms, laboratories, and parking
garages, computers, and networks. We cannot waste finite
resources on anything that does not address this over four-
decade-old physical infrastructure problem.
On March 31, the White House released a fact sheet on the
American Jobs Plan. It stated that it would address immediate
needs at VA health care facilities, create jobs for veterans,
and expand opportunities for small veteran-owned businesses. I
have questions about how this plan's $18 billion proposal for
the VA will be used and how it will align with the most recent
Department's Fiscal Year 2022 budget request for construction
of $2.2 billion. I under the VA is ``in the process'' of
identifying projects and facilities, but I have unanswered
questions regarding how much they cost and how the funding will
be prioritized.
The administration is requesting money now with the promise
to provide a plan for where and how to spend it later. This is
entirely backward. I seek clarity from our witnesses today as
to how all this will be accomplished.
I would also like an update on the asset and infrastructure
review process. We now, with the publication in the Federal
Register, have the final criteria to make recommendations
regarding the closure, modernization, and realignment of
Veterans Health Administration facilities, as outlined in
provisions of the MISSION Act.
We are in a chaotic position. A proposed $18 billion cash
infusion, an almost $80 billion infrastructure backlog, in some
cases over 100-year-old buildings, the AIR commission that has
not even been established yet, and even if the funds are
provided, a VA work force that can address all of these
concerns does not exist.
I am also not confident that the VA planning process could
deliver what the agency or Congress needs. For over four
decades, this Committee has seen the same budget requests and
similar planning process over and over, while watching the
infrastructure continue to deteriorate while the Department's
budget increases and blooms.
Therefore, I feel the responsibility for this Committee to
make certain several key questions are answered today, and I
hope they will be. I hope that you, as our witnesses, address
these subjects and the crucial problems that exist, and I look
forward to hearing your testimony. My position regarding the
importance of VA health care is clear and on the record, and I
am wholeheartedly committed to the maintenance, continued
development, and improvement of our VA health care system.
Mr. Chairman, thank you.
Chairman Tester. Thank you, Senator Moran, and this is an
unusual VA hearing because we only have one panel today, folks,
and let me introduce that panel right now.
First we have got, for the VA we have Brett Simms,
Executive Director for the Office of Asset Enterprise
Management. He is also the VA's Chief Sustainability Officer
and Senior Real Property Officer.
Joining us virtually from the Government Accountability
Office we have Andrew Von Ah. He is the Director of GAO's
physical infrastructure team and is responsible for overseeing
a portfolio of work, including VA property issues.
From the Veterans of Foreign Wars we have Pat Murray,
Director of VFW's National Legislative Service. Pat is here
representing the Independent Budget veterans service
organizations.
And finally we have Don Orndoff, Senior Vice President of
National Facilities Services at Kaiser Permanente.
I want to thank you all for being here, and we will start
with you, Mr. Simms.
STATEMENT OF C. BRETT SIMMS
Mr. Simms. Good afternoon, Chairman Tester, Ranking Member
Moran, and members of the Committee. I am happy to be here
today to discuss VA's infrastructure.
VA operates the largest integrated health care system in
the Nation, with more than 1,700 health care facilities, 158
national cemeteries, as well as a variety of benefit and
service locations. However, our portfolio is aging, with the
average age of VA's own buildings approaching 60 years old.
VA's infrastructure is a barrier to the excellence in care and
service delivery veterans have earned. Health care innovation
is occurring at an exponential place. The comparatively newer
private sector facilities are able to incorporate these trends,
while VA's opportunities are limited within our existing
facilities.
To reverse the trends in VA's aging infrastructure, a large
capital investment is needed. The President has called for $18
billion in the American Jobs Plan to modernize VA health care
facilities. These proposed investments will pay long-term
dividends by offsetting growing costs of older facilities while
meeting the health care needs of today's veterans and those of
the future.
As a part of the $18 billion, $3 billion is sought to
address immediate infrastructure needs. These immediate needs
include upgrades to support the growing number of women
veterans, improvements to utility and building systems for more
reliable and energy efficient operations, and facility
enhancements to better accommodate aging veterans.
The remaining $15 billion would be used to fully modernize
or replace outdated medical centers with state-of-the-art
facilities. This investment is multi-faceted, reflecting the
need to replace aging facilities, adopt modern trends in U.S.
health care, and align with the future Asset and Infrastructure
Review commission, or AIR commission, discussions.
In addition, VA's Fiscal Year 2022 budget was recently
published. It includes several infrastructure-related
legislative proposals. We believe these legislative proposals
are necessary and in line with this Congress' priorities to
address our infrastructure needs. These proposals, including
restructuring our major lease approval process, will address
known challenges and provide VA additional tools in the
delivery of health care facilities. We look forward to working
with Congress to enact these much-needed authorities.
The transformation of VA health care to achieve a safer,
more sustainable, veteran-centered health care environment
requires that VA leverage innovations in ever-changing medical
technology and clinical procedures. With these changes there is
less demand for large, sprawling campuses and more emphasis on
ambulatory and virtual care. This evolving landscape requires
that VA rebalance its infrastructure to provide for a blend of
these delivery methods.
The American Jobs Plan funding will allow VA to jump-start
a recapitalization effort, serving as a down payment on our
path to modernizing our facilities. This investment will allow
VA to address the degrading age and condition of our assets
that present challenges to delivering world-class care. The
American Jobs Plan, combined with a focus on public and private
partnerships, and a veteran-centered approach to health care
delivery will be transformative for the public health
infrastructure of the nation.
VA recognizes that the amount of funding requested in the
American Jobs Plan is significantly larger than our typical
appropriations. Because of this, our approach to execution must
adapt. We are pursuing a whole-of-government and industry
approach will standardizing our facility designs and
streamlining acquisition processes.
VA will leverage our Federal partners to expand capacity.
We will also continue to engage with industry to adopt the most
effective and innovative delivery methods and contract vehicles
to rapidly scale up and speed up. In addition, leveraging
standardized facility designs and building more adaptable
space, VA can better manage cost and scale for these projects.
While recapitalizing our facilities to better support
future health care delivery is critical, we must be cognizant
of the ongoing Veterans Health Administration market
assessments and AIR commission work. VA views both the American
Jobs Plan and the AIR commission as driving toward the same
goal--improving veteran access and outcomes, by ensuring
facilities get the necessary investment to support care and
service delivery into the future.
The MISSION Act requires VA to continue construction,
leasing, budgeting, and long-range capital planning activities
while the market assessment and AIR commission activities are
occurring. The American Jobs Plan supports this requirement
with additional resources, while still allowing the necessary
coordination with the AIR commission efforts. The outcome of
these efforts will shape VA's health care delivery system of
the future.
To summarize, VA has taken important steps to improve our
capital programs and processes, and will continue to do so.
Tactical improvements, combined with VA's strategy
recapitalization undertaking, as part of the President's
proposed American Jobs Plan, are solid building blocks on which
to develop and implement opportunities to best delivery health
care and service to our veterans.
Chairman Tester, Ranking Member Moran, and members of the
committee, this concludes my statement. Thank you for the
opportunity to testify today. I will be happy to respond to any
questions you may have.
Chairman Tester. Yes, thank you, Mr. Simms. Now virtually
we have Mr. Von Ah.
STATEMENT OF ANDREW J. VON AH
Mr. Von Ah. Members of the committee, thank you for the
opportunity to discuss our recent and ongoing work on VA's
management of its vast portfolio of real property assets.
Ensuring the highest quality care for our Nation's veterans
requires high-quality facilities with sufficient capacity, in
accessible locations. These facilities should also be designed
to meet veterans' needs and expectations. However, fulfilling
all of VA's priority projects in its 10-year capital plan would
cost up to $70 billion. Meanwhile, VA faces a growing backlog
of maintenance to facilities that are often considerably older
and thus more costly to renovate and modernize than private
sector counterparts.
My remarks today are based on our reports issued over the
last 4 years on a variety of VA property issues and preliminary
observations for our ongoing work for this committee. We are
currently evaluating VA's asset management practices against
leading practices that GAO considers to be essential for
effective asset management.
First I would like to acknowledge some progress VA has made
over the last few years. For example, we have made over 20
recommendations to the VA to improve such things as its
property disposal and facility activation processes, its cost
estimation guidance, and its ability to incorporate changing
veterans' needs and expectations into facility planning. To
date, the VA management has actively engaged with us to
implement over half of these recommendations, and has made
progress on all of them.
Nonetheless, preliminary findings from our current work on
asset management reveal a number of ongoing challenges in
establishing an effective system. In particular, I would like
to focus on shortcomings in staffing to address asset
management issues, communication and coordination within VA,
and performance measures for assessing asset management.
With respect to staffing, VA has had challenges recruiting
and retaining staff across the department for a number of
years. In particular, officials from several regional offices
and medical centers report difficulties in recruiting engineers
and maintenance staff for their facilities, given the high cost
of living in their areas and because of competition with other
Federal agencies as well as the private sector.
To address this challenge, VA now uses special salary rates
granted by OPM to recruit for engineering staff, which has
helped to compete for these positions. In fact, the
Department's vacancy rate for engineers overall decreased from
17.2 percent in 2019 to 11.6 percent currently.
The VA is now developing a hybrid qualifications standard
for engineers who perform work in a hospital or health care
setting, and the goal here is to provide more flexibility in
recruiting and increase the pool of potential candidates.
However, it is unclear whether these initiatives will fully
address VA's staffing challenges until they have been more
fully implemented. Currently, VA officials we have interviewed
in both headquarters and field offices and all four of the
veteran service organizations that we have spoken with report
that staffing problems still affect VA's management of its
capital assets.
Turning to communication and coordination within VA,
effective capital asset management requires a collaborative
culture and information sharing across traditional lines of
operation. VA's organizational structure can pose challenges
here, given its vast field presence and asset management
dispersed across numerous offices within the VA, with differing
lines of command and authority.
VA recently issued a directive that clarifies roles and
responsibilities for asset management across these offices, and
has developed processes as guidance to indicate how and when
offices should communicate. But progress in this area will
require ongoing effort, findings from our current work
identifying instances where a lack of communication and
coordination may continue to hamper its efforts. For example,
we found that IT staff in medical centers are not uniformly
part of construction and activation discussions, thus, needs
are not necessarily conveyed clearly.
Moreover, if early communication during design is lacking
between medical center and headquarters staff, there may be
delays between initial project approval and execution, with
resulting scope increases and contract modifications which
potentially could have been avoided.
With respect to measuring performance, and effective asset
management framework should include the ability to evaluate the
performance of your system and implement necessary
improvements. Preliminary findings from our current work show
that VA lacks goals and measures to fully evaluate the
performance of its asset management system.
For example, while VA reports information on the condition
of its capital assets, VA does not have goals or targets
associated with them. In its updated directive on capital asset
management, VA indicates that it will establish a system that
will allow it to evaluate capital asset performance in order to
make sound decisions regarding acquisition, maintenance, and
disposal of its assets. In the meantime, without such
indicators, VA will have difficulty knowing whether the system
is working and where it may need to make improvements.
Chairman Tester, Ranking Member Moran, this concludes my
statement. I am happy to answer any questions you or members of
the committee may have. Thank you.
Chairman Tester. Thank you, Mr. Von Ah. Mr. Murray.
STATEMENT OF PATRICK D. MURRAY
Mr. Murray. Chairman Tester, Ranking Member Moran, and
members of the committee, on behalf of the Independent Budget
veteran service organizations, a 30-year partnership between
DAV, PVA, and VFW, thank you for the opportunity to offer our
comments regarding how to strengthen and sustain the
infrastructure of VA.
While VA has received increased funding levels, a
persistent lack of resources for facilities management,
modernization, and personnel continues to negatively impact
access for an increasing number of veterans. VA's aging
infrastructure not only causes veterans to wait too long and
travel too far for care but it also potentially endangers the
health and lives of veteran patients and personnel.
Last November, at the Veterans Affairs Medical Center in
West Haven, Connecticut, an aging campus built mostly in the
1940's and 1950's, while performing what should have been a
routine maintenance job ended in tragedy when an over-pressured
event occurred, killing two men and injuring three other
people. Earlier this month, the G.V. Sonny Montgomery VA
Medical Center in Jackson, Mississippi, announced the closing
of its dialysis treatment center due to aging infrastructure.
These are just two recent examples of how a failure of properly
maintaining infrastructure can impact veterans' access to care
and present risks for employees.
Improperly maintained facilities and equipment can lead to
a loss of money, services, and unfortunately, in some cases, a
loss of life. Infrastructure can be life safety issue and needs
to be treated with the appropriate levels of attention.
Our nation's infrastructure also needs improvement, and a
proposed infusion of $18 billion for VA facilities is
potentially part of a larger national infrastructure package.
The IBVSOs are very appreciative of this proposal, and given
the gap in funding identified by VA's Strategic Capital
Investment Planning process, or SCIP, such an infusion is
certainly justified.
However, we believe it is also time to consider a wholesale
transformation, beginning with the revamping of the SCIP
process. While VA's SCIP list contains all VA major, minor,
interim, and leasing projects, VA's budget request regularly
fails to address the full SCIP funding estimates or priorities.
The SCIP process does not provide a chronological list of
anticipated repairs, renovations, and replacements of
facilities. At best, SCIP provides non-binding suggestions to
the VA budget process, which are regularly bypassed, resulting
in ever-increasing backlog of overdue maintenance and
construction projects.
The SCIP process needs to be overhauled to reflect an
actual plan and priorities of VA's physical footprint. In
reference to the $18 billion proposed infusion in VA's own
testimony on May 27th, they stated, ``To determine the most
appropriate investment for the recapitalization effort, VA will
leverage a data-driven process to identify potential sites.''
Why is that information not already identified? What is the
purpose of having a SCIP process if it is not to determine
priorities in infrastructure?
The SCIP process needs to change to reflect a real-time
list of priorities so they can be completed in order, based on
priority.
Insufficient VA personnel is also an obstacle to timely and
cost-effective infrastructure, maintenance, and construction.
The IBVSOs recommend that VA increase its internal capacity to
plan and manage infrastructure and construction projects by
hiring additional personnel with subject matter expertise in
the office of Construction and Facilities Management, within
each VISN, and at every VA medical center. Congress should also
consider utilizing the Army Corps of Engineers to manage some
or all of VA's major construction projects, as well as private
sector construction management services to increase timeliness
and cost effectiveness.
VA must also align its policies closer to that of private
sector builders, who regularly innovate in order to become more
efficient and effective. Although personnel are not normally
considered part of an organization's infrastructure, the lack
of sufficient professionals to run and maintain an organization
certainly limits its capabilities.
Filling vacant positions is critical to ensuring that
veterans can receive VA-provided care in a timely manner.
Therefore, VA must request, and Congress must provide,
sufficient authorities and funding to fully staff VA in order
to eliminate gaps in health care employees.
Finally, while we await the formation of the AIR
commission, we must not wait for its completion to perform
maintenance, upgrades, and necessary construction. AIR
represents the future of the footprint of VA, but there is $60-
plus billion of work needed now.
Chairman Tester, Ranking Member Moran, this concludes our
joint testimony, and I would be pleased to respond to any
questions you or the Committee members may have.
Chairman Tester. Thank you. You are up, Mr. Orndoff.
STATEMENT OF DON ORNDOFF
Mr. Orndoff. Good afternoon, Chairman Tester, Ranking
Member Moran, and members of the Committee. Thank you for the
opportunity and honor to be before you today on behalf of
Kaiser Permanente. I am Don Orndoff, Senior Vice President and
leader of Kaiser Permanente's National Facilities Services.
Kaiser Permanente Medical Care Program is the largest
private integrated health care delivery system in the United
States, providing comprehensive health care services to 12.5
million members in 8 states. Our mission is to provide high-
quality, affordable health care to our members and the
communities we serve. Like the U.S. Department of Veterans
Affairs, we serve a large, diverse population across our
operational footprint.
At Kaiser Permanente, I am responsible for the full
lifecycle of facilities management, including planning,
acquisition, and operation of our 90 million-square-foot real
estate portfolio, comprised of 1,300 facilities, with a $40
billion replacement value. The portfolio includes hospitals,
medical office buildings, ambulatory surgery centers, call
centers, and supporting facilities. We typically invest about
$3 billion a year in facilities-related capital, roughly 3
percent of our overall operating revenue.
Prior to joining Kaiser Permanente in 2010, I served as the
Executive Director of the VA Office of Construction and
Facilities Management. Before that I served for 30 years as a
commissioned officer in the Civil Engineer Corps and the
SEABEEs of the United States Navy. I am here today to offer my
perspective of four decades of experience in large, complex
organizations, both in the public and the private sectors.
I suggest there are 10 basic tenets to successful
facilities management for large health care delivery systems at
the scale and complexity of Kaiser Permanente and the U.S.
Department of Veterans Affairs. They are:
1. Lead through a comprehensive, enterprise strategy, to
make sure that all business decisions support and are aligned
with a carefully developed, universally understood business
strategy.
2. Transform the care delivery model, to ensure that design
of new health care facilities is forward looking, adaptable for
inevitable change, and flexible to meet future space
requirements.
3. Optimize care delivery platforms as a system, based on
member-centric design that spans across multiple sites of care,
ensuring the right care is provided at the right time, at the
right place.
4. Standardize facilities design, so the entire
organization can apply the discipline to follow the evidence-
based standard every time for every project. This principle
embodies a structured process to continually improve, embracing
innovation that supporting the transforming care model.
5. Modularize facilities components, creating a kit of
parts that can be uniquely configured within a standard
structural grid. Super-designed modules address all relevant
design decisions and allow us to engage aggressively in supply
chain management concepts to reduce the effort, time, and costs
to design and deliver individual projects.
6. Accelerate project delivery, to dramatically reduce
cycle time and cost of project delivery while consistently
delivering high-quality health care buildings.
7. Leverage progressive acquisition strategies, using
integrated project delivery contracting and concepts to allow
the team to virtually plan, design, and fabricate the future
health care building before any onsite work begins.
8. Commit to proactive sustainment, to optimize facilities'
lifecycle performance by requiring proactive sustainment of
existing infrastructure to extend to the service life of
valuable assets, avoid the long-term cost of breakdown repairs,
and minimize core business disruption due to unanticipated
building system failure.
9. Commit to environmental stewardship. By linking
environmental stewardship to effective facilities management,
we are committed to reducing building energy demand while
increasing energy supply from renewable sources, achieving
carbon neutrality.
10. Commit to investing for community health impact, to
create a positive economic force multiplier effect to address
inequities and social determinants that define community
health.
My written testimony submitted for the record further
expands on each of these tenets and overviews the progress that
Kaiser Permanente is making.
In summary, Kaiser Permanente is committed to serving our
members by delivering and operating health care facilities
faster (speed to delivery), better (consistent quality and
capability), and cheaper (lowest lifecycle cost.) We stand
ready to work with this Committee, the U.S. Department of
Veterans Affairs, and all health care industry thought leaders
to improve health and reduce costs.
Thank you for this opportunity to share information about
our work and experiences. I am happy to respond to your
feedback and questions.
Chairman Tester. Thank you, Mr. Orndoff, and I want to
thank all of you for your testimony, and know that your entire
written testimony will be a part of the record, so thank you
all.
I am going to start with you, Mr. Simms. VA has been
waiting since 2017 for Congress to act on a list of leases to
allow the VA to build or refurbish a number of new clinics all
across this country. That list has gone to 21, impacts 13
different states, impacting hundreds of thousands of veterans
across the country. I believe you know that I have been working
on legislation to try to fix this issue for once and for all.
My question to you, is it correct that VA is supportive of
making changes to the major lease process similar to what is in
my BUILD for Veterans Act legislation? Is that true?
Mr. Simms. Yes, sir.
Chairman Tester. And would those changes, if we were to
pass the BUILD for Veterans Act legislation, have a significant
impact on actually delivering these claims for the communities
that need them?
Mr. Simms. Yes, sir. That is correct. I think the 21 leases
that you mentioned add over 2 million square feet of capacity
to the portfolio, and the changes proposed in the BUILD Act, as
well as our FY22 budget submission, our legislative proposal to
change that process, would dramatically improve our ability to
deliver those.
Chairman Tester. I appreciate that. Mr. Murray, from a VSO
standpoint, particularly yours at the VFW, especially since the
fact that I believe you are intimately aware of this
legislation, do you support the legislation?
Mr. Murray. To change the leasing authority, sir?
Chairman Tester. Yes.
Mr. Murray. Absolutely. It offers much-needed flexibility
for VA.
Chairman Tester. And in the flexibility is what is
critically important.
Mr. Murray. Yes, sir.
Chairman Tester. All right. I am going to go over to you,
Mr. Orndoff, if I can find the question here. Look, you manage
large facilities for Kaiser Permanente. I understand that you
recently had an opportunity to meet with VA officials,
including Dr. Stone. Is that correct?
Mr. Orndoff. Yes.
Chairman Tester. Yes, and to talk about some of your
insights, and I thank you for that. Can you share with us some
of the conversation, the lessons learned, the observations that
you were able to translate to the VA folks?
Mr. Orndoff. Yes, Senator. I think the big conversation
revolved around speed to delivery. Dr. Stone expressed a few
examples of projects, and I think it is common knowledge that
some projects have been case studies and were not speed to
delivery.
So, what are the opportunities? What are the tools and
methodologies that we use in Kaiser Permanente that might be
applicable for VA application? So there was a lot of good
conversation around that. Obviously, understanding the agility
and how you are planning for the future for an ever-changing
care model was part of the conversation as well. Kaiser
Permanente is very committed to working with the VA on a
continuing basis to address these kinds of challenges.
Chairman Tester. I also appreciate that. Mr. Orndoff,
Kaiser is smaller than VA in physical infrastructure size, but
I think it is fair to say you have a comparable yearly budget
for infrastructure as the VA does. Is that correct?
Mr. Orndoff. Yes.
Chairman Tester. Okay. So, I mean, I think that says a lot
right there, about where your priorities are. But how do you
determine your budget for maintaining what you have and what
you intend to build new each year?
Mr. Orndoff. Thank you for that question. We go through a
rigorous process of trying to understand where our
opportunities are to expand our membership and create
additional access for our members. We have a delivery system
planning process that is constantly looking at that issue. And
where we have gaps or missing capability we will begin to
program in solutions that would address those gaps.
We start off with the premise that maintenance of our
existing infrastructure is the first priority of capital. That
is repeatedly reaffirmed by our chief financial officer, that
we will maintain our target performance for our existing
infrastructure. We currently set our targets at 5 percent
maximum backlog for hospital facilities and maximum of 10
percent for any other facilities, in terms of a backlog. That
gives us the ability to execute that work and program it and
keep those facilities in the best shape possible and extend the
life of the facilities.
We typically look at about a 2 1/2 to 3 percent capital
investments against operating income. Our whole economic
structure and financial structure is geared to create the
headroom to have a capital program to maintain the
infrastructure, which is critical to our care delivery model.
Chairman Tester. Do you think that proportion is applicable
to any health care system, including the VA?
Mr. Orndoff. Well, certainly there is a point where it is
an optimum. I think that obviously there are a lot of
considerations and priorities that go into resource allocation.
But, you know, we have come to that as a general business
philosophy and program to those levels, and stress our entire
system to deliver on those as part of measuring our
performance.
Chairman Tester. Thank you. Senator Tillis?
SENATOR THOM TILLIS
Senator Tillis. Thank you, Mr. Chairman. Gentlemen, thank
you for being here today.
Mr. Simms, you, in your opening comments mentioned
rebalancing infrastructure. I think Secretary McDonough used a
slightly different term. Some people have tried to characterize
that as a brag for the VA. How are we able to break through the
threat--you have got a ratchet effect problem going on here,
right? You want to either consolidate or modernize facilities.
It may affect a physical footprint. And so you have the
challenge of being able to come up with some sort of service-
level metric or something that can ensure the veteran that the
fact that the address may change, that the service levels are
as good or better.
As you are going through this process, to what extent are
you preparing that kind of information so that they can feel
confident that that would be the end result?
Mr. Simms. Thank you for that question. That is absolutely
critical in any of the decisionmaking that we are looking at
for infrastructure. What I will say is the Secretary is pretty
consistent in the message that we are looking to improve the
access and the outcomes for veterans. And some of that is
delivery care by VA, in VA facilities, some of it is VA as a
provider, but in other facilities, and some of it may be care
in the community that VA is the care coordinator for.
All of those are pieces of the market assessment and AIR
commission work that is ongoing at this point. It will clearly
influence what the physical footprint looks like, but we also
know that there are sites that today, the age and condition of
the facilities simply will not support whatever that future
footprint will be.
So we are trying to get ahead and identify those sites and
what work could be done early so that we are ready to hit the
ground running.
Senator Tillis. I am going to come back to you in a minute.
Mr. Orndoff, of the real estate portfolio that are
responsible for managing, how much of that does Kaiser
Permanente own versus some sort of a lease arrangement with the
building owner?
Mr. Orndoff. In broad numbers it is about two-thirds owned,
one-third leased.
Senator Tillis. One-third. And what is the trend, moving
forward? Would it be roughly the same proportion, or what is
the trend?
Mr. Orndoff. For our larger facilities we tend to want to
own those. It is major capital investment, long-term
investment. We typically use leasing for more tactical purposes
and administrative space. And right now, of course, post-COVID
we are looking at consolidating our administrative footprint
for some of the opportunity there.
I suspect that we will be seeing the owned ratio go up,
probably to about three-quarters to one-quarter.
Senator Tillis. That may make more sense in the space that
you operate. When we build a building it is sort of like, I am
having this discussion with DoD, I am having this discussion
with DOJ on courthouses. When we enter into these sorts of
relationships we have a stickiness that could be 20-, 30-, 50-
year relationships. I think that is more attractive for
private-public partnerships.
Mr. Simms, first off, when is the AIR commission going to
present the report to the President, to either sign off and
send to Congress or send the commission back to doing its
homework?
Mr. Simms. If I have the dates right from the statute, VA
will deliver its material at the beginning of 2022 calendar
year. The AIR commission will debate for approximately a year,
and then in February 2023 will deliver its recommendations back
to the President.
Senator Tillis. Is the AIR commission--I know the law
restricted the stoppage of any projects while the commission
was going through. So now you have got a physical plan that at
the end of the day may or may not be completely consistent with
what you want to do. So is the AIR commission also focusing on
the end process projects?
Mr. Simms. No. In the end process projects are just
continuing to move forward. The AIR commission is not
necessarily looking at those.
Senator Tillis. At the viability of them, whether or not it
was a rational decision to do whatever they are doing. They are
either renovations or new buildings. Those are outside of the
purview of the AIR commission?
Mr. Simms. Correct.
Senator Tillis. The last thing I will leave you with, I
know, at least in North Carolina, I almost think about P4---
public, public-private partnership. As you are looking at some
of these models, are you looking at state and local governments
who may be willing to play a role to reduce the cost of the
build-out? We are working on a project now in DoD where the
state is going to issue bonds and be a partner with a private
sector provider for facilities not far from Seymour Johnson.
Have you all looked at that dimension as you move forward with
the leasing and some of these PPPs?
Mr. Simms. Yes, that is a great question. So we do not have
the inherent authority to look at even typical public-private
partnerships. We do have some space-sharing authorities that we
are looking to try to leverage in different situations to
acquire space quicker, but it is not a pure public-private
partnership engagement like you are describing.
Senator Tillis. Well, Mr. Chair, I think I inferred from
you that you are Okay with these leaseback projects. I think it
would be absurd for that not to be a key part of our portfolio,
and I think that the ratios, looking ahead, if we want to build
out more facilities, should probably be more weighted to more
leasebacks. These are long-term projects. They are not going to
move for decades. You can create an investor base that is
willing to put that in there because they know they have got a
good tenant.
Thank you, Mr. Chair.
Chairman Tester. Thank you, Senator Tillis. Senator Hassan?
SENATOR MARGARET WOOD HASSAN
Senator Hassan. Well, thank you, Mr. Chair, and I want to
thank the Ranking Member as well for this hearing, and I want
to thank the witnesses for being here today. And, Mr. Simms, I
want to start with a question to you.
New Hampshire is one of three states, along with Alaska and
Hawaii, that lacks a full-service VA hospital, something I have
been pushing to change for years. Because we do not have a
single, full-service facility, many granite state veterans
receive care in a patchwork manner--at clinics, through
contractors, and across state lines.
Mr. Simms, in your testimony you said that the VA takes a
data-driven approach to prioritizing projects. How does the
lack of a full-service VA hospital in a state factor into that
data-driven approach?
Mr. Simms. Thank you, Senator, for that question. I will
get specifics on New Hampshire, but in general, what it comes
down to is the enrollee population and the projected service
demand are laid against the available resources. And those
resources include VA, Community Care, and other providers out
there, to determine where those points of care today exist or
where there may need to be some in the future. But it is very
local and very specific to different regions, as you pointed
out.
Senator Hassan. Well, I understand that. I think one of the
things we are looking for is assurance that without a full-
service VA resource within the state that there are different
kinds of pressures on the other health care providers and
different kinds of needs for the veterans. So this is a way of
saying that I think the VA needs to better prioritize veterans
in New Hampshire, Alaska, and Hawaii, who lack a full-service
VA hospital. And at a minimum, VA should take the lack of a
full-service VA hospital into account when allocating
resources. I am happy to work with the committee and with the
VA to help ensure that happens, going forward.
Relatedly, Mr. Simms, the current VA Medical Center
building in Manchester is 70 years old, and it shows. Just a
few years ago, the building had a major fly infestation that
led to canceled procedures, and the VA has spent tens of
thousands of dollars on exterminators to help address the
problem. Our veterans should not have to wait for insect
infestations to clear up in order to get the care that they
need.
In 2018, a VA task force put forth a robust set of
recommendations for VA care in New Hampshire, including an
ambulatory surgical center at Manchester and numerous other
changes to improve VA infrastructure. But 3 years later,
Granite state veterans are still waiting for action on many of
those recommendations.
So, Mr. Simms, can you please speak to how the VA will make
real, lasting change to its facilities to proactively address
our veterans' needs, rather than take a Band-Aid approach, like
hiring insect exterminators to fix issues that have a negative
impact on care?
Mr. Simms. Thank you, Senator. That is a great question,
and frankly, that is at the root of why we are driving toward
recapitalization. There is only so much of that Band-Aid
approach that you can take before you simply cannot make some
of the changes or fixes that are necessary to continue support
in those facilities, without having shortages or stoppages of
care delivery, and we certainly do not want that.
There are some facilities that we need to look at fully
recapitalizing, and New Hampshire is an example. Manchester
would be one that is of the right age, the right condition,
that it would fit with many other facilities across the system
that are in that discussion for where does recapitalization
make sense to actually just wipe the slate clean and start new.
Senator Hassan. Right. It is rare that you call somebody at
Manchester--and the staff there is great, veterans love the
staff, they are grateful for the care they get--but you call
and there is almost always some facility issue that is
interfering with care. It is not just an inconvenience. So I
would look forward to working with you on that.
Mr. Murray, I want to thank you for being here today as
well. We certainly know how essential our veteran service
organizations are in our communities. We are really grateful
for them in New Hampshire.
The VA must use a comprehensive approach in infrastructure
planning that uses both data but also the input from veterans.
Mr. Murray, can you please speak to why feedback from local
VSOs is critical to infrastructure planning and how VA
officials can use this information to inform their decisions?
Mr. Murray. Absolutely, ma'am. As part of the market
assessments, the local veteran's voice is important to find out
what services are needed, what services are desired. VA cannot
properly set up what they are going to put in their VA facility
if they are not aware of exactly what it is they want.
One of the things that we are also here to say, as you
mentioned, some of the issues regarding facilities. That is
stuff that our members hear about. That is stuff that veteran
patients see about. As Mr. Orndoff mentioned, 3 percent of
operating costs, if that was applied to VA's budget that would
probably align with what we think VA should be spending every
year, but they do not have the capacity in order to do that.
They do not have the personnel to manage that much work, that
volume of work.
So we think that looking at what organizations like Kaiser
are doing, and kind of applying that to VA would really help,
moving forward.
Senator Hassan. Thank you, and thank you, Mr. Chair.
Chairman Tester. Senator Tuberville.
SENATOR TOMMY TUBERVILLE
Senator Tuberville. Thank you, Mr. Chairman. Thank you,
gentlemen, for being here today.
You know, the COVID-19 pandemic forced a lot of health care
services online, and telehealth became a crucial ability for
veterans and providers across the country. With this increased
use of telehealth services, fewer veterans have to travel to
see their doctor.
Mr. Simms, how does this trend influence the decision you
are making around constructing or accessing the need for more
VA hospitals and clinics?
Mr. Simms. Thank you, Senator. That is a great question
that at this point we do not really know the answer to, simply
because when COVID and the pandemic hit, it forced a lot of
delivery of care to go into those virtual modalities. We are at
the point now, as we come out of the pandemic, we are not sure
that all of the veterans will want to stay in that virtual or
whether they will want to come back to the facilities for
visits for different types of things. So as we learn more about
that it will absolutely impact the footprint.
Senator Tuberville. Yes. I think education is going to a
part of that too. You know, with 7.8 million young men and
women, or my age, even, that just fought in these two wars we
had, you know, we are going to have a lot of people that we are
going to have to treat, and we are going to be overrun at
times. I think telehealth could be a big factor.
Mr. Von Ah, when coordination breakdowns occur most
frequently within the VA in relation to infrastructure
vulnerabilities, how would you recommend the VA leverage the
$18 billion from the American Jobs Plan to address these
vulnerabilities?
Mr. Von Ah. Thank you for that question, Senator. So our
work has shown that there are a few places where communication
can be lacking, where offices may not frequently interact, for
example, the property disposal process does not occur as often
as other types of projects, so facility staff may not be
familiar with the options or the processes they need to follow.
We also see a number of breakdowns between headquarters and
the field in terms of headquarters sort of explaining what
their priorities will be and should be for local planners, and
local medical centers communicating their needs up to
headquarters.
Then we also see issues where multiple lines of business
come together, and this happens, for example, during
activation, where you can have challenges with bringing
different lines of business together with their own budgets and
lines of authority.
In terms of the $18 billion, I think for us it really
starts with setting goals and measures in terms of what VA
hopes to accomplish. Our work has shown that while the SCIP
process identifies priorities, there are not really clear goals
in terms of, you know, do we want to close these SCIP gaps? Do
we want to get this many facilities at this level of condition?
Or do we need to make a dent in the deferred maintenance
numbers that we have?
And so for us it really starts with setting those goals and
measures to sort of guide what they should be doing with an
infusion of dollars.
Senator Tuberville. Thank you. Mr. Murray, private industry
has certain standards and practices to improve construction.
What can the VA do to align more closely with private sector?
Mr. Murray. Thank you, Senator. Some of the things is to
speed up the lifecycle of the entire project by bringing the
designers, the contractors, and the end users together in
contractor-led design-build processes. It shortens it by
bringing all the parties together. It might shorten it by a
year or two, but when you are talking about medical equipment
that has a certain lifecycle, it only has a finite number of
years for it to be in its prime usage period, that really lets
that facility operate at maximum capacity for a better amount
of time for patients by bringing them together with contractor-
led design.
Also by utilizing the Army Corps of Engineers, who has
moved and developed some of those same practices. Also reaching
out to private industry and asking organizations, like Kaiser,
who have learned some of these lessons. The private sector
works on efficiency. They do it because it works. That is
something that VA should really lean on.
Senator Tuberville. Thank you. That leads to my question to
Orndoff here. What have you found to be the typical total cost
of a building, a brand-new, state-of-the-art hospital, and if
you were given $18 billion to improve the Kaiser system
infrastructure, how would you allocate that money to ensure it
is used effectively?
Mr. Orndoff. Thank you, Senator. Of course the cost of a
hospital is depending on the size and the scale and so forth.
Senator Tuberville. Average size.
Mr. Orndoff. Right now we are delivering about $800 million
per copy, on a typical 250-to 300-bed hospital. We have one
under construction right now, and that is the price point for
that.
So, you know, round numbers, when you look all in, it is $1
billion a copy. It is a daunting challenge with the age of the
infrastructure of VA to say where do you start and where do you
apply this?
One piece of advice that we shared with Dr. Stone a couple
of weeks back was, try to take a programmatic view of this, and
in execution, not just in the thinking and the planning but in
the execution as well, where you can leverage the scale of the
spend in a way to get better pricing and streamline some of the
decisionmaking process. So that might be one thing that we
could talk about, some areas where we have had some success
with, and share that with VA.
It is an expensive business, and as you know, the cost of
materials and supplies right now are really escalating in the
construction business. It is very difficult to predict the
future of cost in construction right now. We are doing our best
to forecast, but it is more of an art than a science, to be
honest, and we hope to see that settle out soon. But there are
also pinch points for things like labor availability. That is
one of the major drivers of construction cost as well.
The dynamics post COVID, as we recover and set the new
normal, will all be impacted by this and we will all be trying
to read the tea leaves as best we can to understand costs and
future costs.
Senator Tuberville. Thank you, Mr. Chairman.
Chairman Tester. Senator Brown. Senator Murray.
Senator Murray. Senator Brown has been sitting here, if you
want to go.
Chairman Tester. He has been here for at least 5 minutes
before you. I just wanted you to know.
[Laughter.]
Senator Brown. Senator Murray wants to chair this
Committee.
SENATOR PATTY MURRAY
Senator Murray. Thank you. Thank you, gentlemen. It is
great to see you here today.
You know, I am really glad that President Biden included
historic investments in home and community-based services in
the American Jobs Plan. As our aging population of veterans
grows, veterans' long-term care needs really deserve a lot of
attention to make sure that these veterans receive the quality
care that they have earned.
This week I actually introduced a bill to pave the way for
much-needed investments in long-term care. My bill, called the
Planning for Aging Veterans Act, would improve VA's
relationship with state-run veterans' homes and expand the care
veterans in state homes receive. Importantly, this legislation
requires the VA to develop a strategy addressing the future
needs of our veterans so we can provide the resources to ensure
veterans have access to long-term care options, which includes
addressing the needs of veterans with unique needs, like women
veterans and veterans who live with traumatic brain injuries,
or in need of medical care.
So, Mr. Murray, I will start with you. Good name, by the
way. What steps would you take to prepare for the growing
number of older veterans seeking long-term care services, both
at home and in institutional settings, and how can VA actually
tailor their care infrastructure plan to properly serve our
aging veterans?
Mr. Murray. Ma'am, for the aging veterans, we need to
invest heavily in the long-term care facilities, something that
frankly is kind of has been overlooked in recent years, where
we think now is the opportunity to really do that. It is a
better model of care. There are far too many veterans that are
in non-VA-controlled homes.
The other one you mentioned, for women veterans, that is
another population that is growing, and the Independent Budget
is recommending $20 million, specifically for physical
infrastructure changes for women veterans, but we are also
recommending that it be put in a dedicated budget item, so it
is not put into a general facilities fund that could be taken
as needed, if there is a more pressing issue that comes up in a
facility. Otherwise, these things will never get done.
So we think that for critical things like that, for growing
populations, they need to be assigned and left alone as certain
budget items.
Senator Murray. I appreciate that, and our women veterans,
in particular, we have a large number of women come into the
military, they are aging, they are going to need these
facilities. We never built them and are not ready for them, so
that is important. Thank you.
Mr. Simms, let me turn to you. The average age of our VA
health facilities is more than 50 years old, and by comparison,
by the way, the median age of U.S. private sector hospitals is
about 11 years old. So many veterans are now relying on these
facilities to get the care that they desperately need,
including a facility in my home state, Walla Walla, Washington,
which I fought to keep open.
I wanted to ask you, how is the VA making sure that the
existing facilities have the capacity to continue serving
veterans, and particularly our veterans in our rural areas,
with high-quality care, instead of shuttering facilities where
access to health care is already a challenge?
Mr. Simms. Thank you, Senator, for that question. A couple
of things. One is, as we talked a little bit ago about
leveraging leasing, leasing facilities allows us to put points
of care closer to where veterans are, including in rural areas
where it may not make sense because you do not have the
demographics to have a large VA facility, but standing up a
clinic, via the leasing portfolio, is one of the ways that we
can ensure there is access to VA, high-quality care in those
areas.
For places where we have existing facilities, we are
looking at those to ensure that both the capacity and the
condition. Tactically, we have to address things as they come
up, but we are also looking strategically at where those
campuses are that need the larger reinvestments and
recapitalization efforts.
To piggyback off of what Mr. Murray said, if we look at the
focus areas for things like women veterans or aging veterans,
part of the American Jobs Plan would be able to focus on those
areas at multiple facilities across the country, to be able to
address investments targeted at increasing access in those
areas.
Senator Murray. Okay. And I am really worried about
staffing shortages. The VA operates one of the largest health
care systems in the country. It serves over nine million
veterans. And in order to give our veterans the care they
deserve, VA has to be operating at full capacity. And according
to VA's latest publicly available staffing data, VA is severely
understaffed, even after the influx of hires due to the COVID-
19 pandemic.
So I am not sure who can answer, but how can Congress help
VA solve these staffing shortages and make sure that our
veterans get the care they need?
Mr. Simms. Thank you. That is a critical question. In many
respects, we are facing the same thing as the public health
care system. There is simply a shortage of providers, in
particular those specialty providers, that we just cannot get
to, nor can anyone else. So it is a resource that is just
scarce to get to.
With that said, I think the VA numbers on the staffing have
improved, and our turnover rate is actually significantly lower
than the private sector. Comparable private sectors have
turnover rates close to 30 percent, and VA's is closer to 8
percent. So our turnover rate is very good. Some of those
vacancies are simply that normal turnover, as well as increased
funding that we are working to fill those vacancies. But they
are essentially new positions so they are not existing
providers that we do not have.
Senator Murray. Okay. Well, particularly if you can get
back to the Committee how we can make sure we are doing what we
need to do to make sure you have the staffing that you need, I
would appreciate it.
Thank you, Mr. Chairman.
Chairman Tester. Thank you. Senator Brown.
SENATOR SHERROD BROWN
Senator Brown. Thank you, Mr. Chairman, and thanks for
holding this hearing on VA infrastructure and how important it
is. We know that our Nation's infrastructure is more than the
Brent Spence Bridge over the Ohio River in Cincinnati, as
important as that is. It is more than public transit. It is
more than water and sewer systems. It is VA infrastructure too.
And we know that when servicemembers answered the call, the
American Jobs Plan, the $18 billion--I heard the Senator from
Alabama talk about the $18 billion, what you should do with it.
Well, you will obviously put it to particularly good use.
Experts on this panel and from organizations like RAND
stated that VA's aging infrastructure has a major impact on
veterans' access to health care logically. Mr. Murray's
testimony highlights the need for additional resources for
specialized care such as spinal cord injuries and disorders,
and we know the number of female veterans seeking care at VA is
growing rapidly. The VA in Cleveland has one of the best spinal
units in the country.
So, Mr. Simms, in your testimony--my question is for you--
you stressed the importance in the American Jobs Plan, of the
$3 billion to address immediate infrastructure needs within VA
facilities. How would the VA use the American Jobs funding to
improve care for female veterans and other specialties like
spinal cord injuries and mental health?
Mr. Simms. Thank you, Senator, for that question. There
would be focused investments, looking at women's health, for
example, where we would be looking to both increase access as
well as improve existing facilities for things like privacy,
separate entrances, and things like that, to address some of
the concerns of women veterans being able to access services
that exist today. It would also include capacity expansion, to
ensure that we have got the right clinics and the size of those
clinics to be able to support the women veterans.
So that is one piece of it. More broadly, I think a lot of
the challenges we face--and Ms. Hassan had given an example of
that, of facilities where there are utility issues that force
closures or denial of service. A large portion of that
immediate investment would be looking at those core
infrastructure utility system needs to ensure that we are
operating efficiently and effectively in the existing medical
centers, so that those types of care can be delivered, whether
it be specialty, primary care, inpatient, or outpatient.
Senator Brown. Thank you, Mr. Simms. My other question is
for Ms. Murray and Mr. Von Ah. You both detailed steps that the
VA can take to make improvements to address changes in
demographics and adapt to new specialties. Walk us through,
each of you, if you would, Mr. Von Ah and Mr. Murray, walk us
through some of the staffing and resource improvements that you
recommend. Tell us how these changes would improve veterans'
access to health care.
Mr. Murray. Senator, the first thing that we really
recommend is building internal capacity for VA to actually
perform the work. Right now the current backlog, there is no
plan to address the backlog for infrastructure. When we face
backlogs with appeals, when we face C&P exam backlogs, right
now there is a national records backlog, there is always a
plan. It involves increased staffing, overtime, additional
resources so that they can defeat that backlog.
Right now there is no plan for that for VA infrastructure.
We think building the capacity in the work force to perform the
work is critical. Right now there is a $60-plus billion
backlog, and $22-$23 billion of that is maintenance alone.
Coming forward, in the next couple of years, we have AIR
commission that is going to produce a report with
recommendations. If those recommendations cannot be acted upon
for years, then the report will be worthless. It will be a
waste of time if the AIR commission results cannot get acted
upon for 10 more years.
So building the internal capacity, increasing the slots to
hire to do the work at VA I think is No. 1 to address those
needs.
Senator Brown. This money will enable you to carry you to
answer that report, in a sense.
Mr. Murray. I am sorry. What was that, sir?
Senator Brown. So these dollars will help you answer that--
carry that out, carry that report out.
Mr. Murray. Yes.
Senator Brown. Okay. Mr. Von Ah, if you would respond too.
Mr. Von Ah. Sir, I thank you for that question. So just
looking to the needs and expectations of veterans, you know, we
have done some work looking at the ability for VA to
incorporate those needs and expectations into facilities
planning. VA has taken some steps to at least make it clear to
local facility planners how these gaps in their facility needs
are derived and understood in terms of the health care models
that VA has and how that translates into space needs.
But we also have some outstanding recommendations related
to them being able to identify and incorporate veterans'
expectations and changing needs into some of that facility
planning. So we think those recommendations could help them to
sort of bridge that gap in terms of the types of things that
you are talking about, in terms of women's care and specialty
care that is needed in the community.
With respect to staffing challenges, I think, you know,
again, it is just incredibly important that, you know, from my
perspective we only look at it from the facilities side of
things, so we are looking at the vacancies in facility managers
and vacancies in engineering and maintenance staff. At
facilities that I visited where you have robust staff, you see
the ability to respond to some of those needs very quickly and
very efficiently, and where you do not have staff you see
difficult choices about what do we fund, what do we fix, what
do we put off, and what do we defer.
So, you know, the idea that VA has some flexibility in
terms of creating a new health care engineering position has
used some flexibilities in terms of its ability to offer higher
pay. I think those are all good things but it will remain to be
seen whether that really addresses some of the problems out
there in specific communities.
Senator Brown. Thank you. Thank you, Mr. Chairman.
Chairman Tester. Senator Blumenthal.
SENATOR RICHARD BLUMENTHAL
Senator Blumenthal. Thanks, Mr. Chairman, and thank you for
having this hearing. Very, very important. And let me just come
right to the point. In West Haven--I hope you are familiar with
what happened there--an explosion killed two people, including
a member of the Veterans Affairs staff, a veteran of military
service, not long ago, and the OSHA report, which has recently
been released, found a number of errors in maintenance and
repair procedures. But essentially that explosion was a result
of an aging, decrepit system of steam pipes. It is only one
example of why that whole structure, the West Haven VA
facility, needs to be rebuilt.
I have advocated this reconstruction for years. It is a
1950's building with a more modern shell. It has been afflicted
with insect infestations because of structural defects in its
walls. It is insufficiently strong to accommodate the most
modern surgical equipment. There are a variety of different
structural problems that make it inadequate. And I should add
the VA staff, the doctors, the nurses, the administrative staff
are world-class. They are doing their best with this
inadequate, aged, decaying facility, and they are heroes.
But the facility needs to be rebuilt, and two people are
dead now because of a failure to take necessary steps to invest
in this infrastructure. It is horrifying and outrageous.
So I would like to know, Mr. Simms, what will be done in
this budget to provide the investment necessary to rebuild this
facility? Connecticut has 200,000 veterans. VA systems employs
2,500 dedicated staff. And I think that this facility should be
at the very top of any list, and there should be a list of VA
facilities that need reconstruction.
Mr. Simms. Thank you for that question, Senator. The
tragedy at West Haven obviously has many immediate impacts that
we are working to address, both at West Haven as well as across
the portfolio, to do our best to ensure incidents like that do
not happen.
With that said, your point is well taken in that the
facility, in and of itself, is an aged facility, and the
infrastructure there is a contributing factor to incidents like
this.
So let me talk specifically about West Haven, and that is
we have identified a specific project that is included in our
5-year development plan for major rehabilitation work at the
West Haven facility.
Senator Blumenthal. What about the timetable for it?
Mr. Simms. I believe Fiscal Year 2023 or 2024 is the
construction investment that was included in the budget.
Senator Blumenthal. Well, I would like a specific
commitment that it be done by date certain. I would like a
timetable for what the planning and design and execution would
be. I am saying this with all due respect, but I have said it
years previously. And I do not want to see more deaths occur
there as a result of delay. So if you could get me something in
writing I would appreciate it.
Mr. Simms. I will happily do that, Senator.
VA Response: Planning - The planning contract for West Haven major
construction project was awarded in March 2020 and completed in
September 2021. The required National Environmental Policy Act study is
ongoing and is scheduled to be completed in Q4 fiscal year (FY) 2022.
VA approved the project to proceed from the planning to the design
phase March 2022.
Design - The contract for the Architect/Engineer (A/E) is on track to
be awarded by the US Army Corps of Engineers (USACE) in Q3 FY 2022. The
cost estimate for this project is over $100M, hence the design and
construction will be transferred to the USACE for execution.
Construction - The construction contract will be ready for award Q3 FY
2024. Detailed cost and schedule forecasts will be developed by the A/
E.
Senator Blumenthal. Thank you. Let me just ask, quickly,
about another aspect of infrastructure there. Several years
ago, the West Haven VA had a flood that impacted its sterile
processing facilities, which resulted in staff being forced to
conduct sterile processing in trailers and also farm it out to
nearby hospitals, like Yale New Haven.
In 2018, investigations by the Joint Commission and the
VA's National Program Office for Sterile Processing found that
the facility did not meet its standards to properly sterilize
surgical equipment and that the facility could not accommodate
patient needs. As a result, a proportion of surgeries were
outsourced. The OIG also found that VA leadership decisions to
remedy this situation impeded progress and created a divide
between clinical staff and administration. No staff with either
the SPS or operating room experience were included in the SPS
program. And I understand now the current location of the
surgical sterilizing procedure is in the basement, that it is
unsuitable because of intense humidity and high temperature
that are creating mold and overall hazardous environment for
that processing.
Again, disappointingly, construction has been delayed for a
new addition to the Sterile Processing program, and it has been
assigned and is currently in the project book stage. The
initial cost estimates were completed in 2015, and the latest
estimates would place a completion date toward the end of 2028.
I have, again, asked repeatedly, and been assured it would
happen well before that date, and I would like, if you know
now, when this work will be completed. The retrofitting of the
trailers for the temporary solution has also been delayed. Can
you tell me what will happen by what date?
Mr. Simms. Senator, I do not have that information but I
will get back to you with that, in writing.
VA Response: Initially the major construction project scope
included the sterile processing services. This is now being completed
through a minor construction project with design obligated in March
2020. Construction is estimated to be awarded in FY 2024 and completed
by FY 2026. Sterile processing services are temporarily established in
an onsite trailer until construction of the permanent facility is
completed.
Senator Blumenthal. I appreciate that. Thank you.
Chairman Tester. Senator Blackburn.
SENATOR MARSHA BLACKBURN
Senator Blackburn. Yes, Mr. Chairman. Thank you so much. I
appreciate this.
Let's see, Mr. Orndoff, I wanted to come to you. As you
know, in Tennessee and there in Nashville we are pretty much
the hub for our Nation's hospital management companies. And I
know when we talk with them they talk a good bit about
providing world-class service and the importance of budgeting
and planning and execution, and how that has been so
instrumental in their long-term success. And I feel like, as I
look at the VA, this is truly something that is missing for
them.
And, Mr. Simms, I am going to come to you next on this OIG
report on the deficiencies in reliable physical infrastructure
cost estimates for the electronic health records, and looking
at VA infrastructure.
And I think, Mr. Orndoff, what I would like from you, for
the record, is how do you identify both these electronic or
cyber infrastructure, how do you identify the local physical
infrastructure, how do you maintain this system of upkeep and
maintenance, which sometimes, in the Federal process, we build
it, it is new, but then it does not have the proper ongoing
maintenance. And I think it would be helpful for you to just
talk for a moment about what your process is, if you can give
us a minute on that.
Mr. Orndoff. Thank you, Senator. We try to have a lifecycle
perspective. I think that is common knowledge that everybody
would want to be there. It is a bit challenging because----
[Audio interruption].
Mr. Orndoff. Okay. I should continue?
So what we try to do is to think about what is the
sustainment cost as part of the overall decision to execute on
a particular project, so we are not just focused on up-front
capital costs but lifecycle and sustainment cost as part of the
overall solutions.
It is challenging to do. There are different types of money
and so forth, and I understand that there are competing
priorities, obviously, for resources. But it does take the
vision to do that. It does take the commitment of leadership to
follow through to do that and the constancy of purpose to
deliver, and that is a constant vigilance that the organization
needs to have.
In the private sector it is a little more straightforward
on how we can plan, acquire, and operate. I understand
certainly having been at VA in my past the challenges of having
that longer-term view, and the magnitude of stakeholder input
that you have to factor in.
But we have come to understand within Kaiser Permanente
that the right answer is to make the lifecycle investments, and
as we plan facilities we understand that there is a run cost
and a tail to that, and we want those huge investments to have
the absolute longest service life possible. And so by
proactively maintaining that infrastructure you will get the
maximum life, you will get the minimum disruption from
breakdowns and unexpected events, and it actually, over the
long term, reduces cost.
So it is hard to have the discipline and rigor to do it,
but we know we need to and we have a steady stream in that
direction.
Senator Blackburn. Not to interrupt but, Mr. Simms, I want
to get to you. And looking at this report on the deficiencies,
you know, we all know that really having fine-tuned and precise
cost predictions are something that you are not going to be
able to do specifically. The report points that out. But it is
something that you need to be able to ballpark. And it said in
the report, additionally, that VHA leaders did not know the
true state of their physical infrastructure at these
facilities.
So we are trying to move forward with 21st century health
care provisions, and these electronic records, but you also
have the physical facility issue. So why was the state of these
facilities not known, and what steps are you taking to improve
the SCIP process that should have been essential to this?
Mr. Simms. Thank you, Senator. So let me address that in
two parts. First is we actually do know the condition of our
facilities. We have a recurring assessment process that we
evaluate all of the systems and subsystems of our building on a
regular, 3-year cycle, that identifies what facility systems
are in good condition, poor condition, and what it would cost
to fix or get those to a like-new state.
The challenge, and the second point, with the EHRM
infrastructure is it was not about the condition of the
facilities. It was whether or not the facilities met the new
standard that was necessary for deployment. So a simple example
would be we have a wiring closet that has a HVAC capacity in
it, but if it was not the right standard for EHRM, we needed to
do work. We needed to do investment to ensure the deployment
could happen.
So the state of the facilities that I believe the IG report
references to is whether or not they met the standards or the
requirements to deploy, not necessarily the physical condition
of the facilities, which I do think is included in the SCIP
process.
Senator Blackburn. Okay. Thank you. I know I am over time.
Thank you, Mr. Chairman.
Chairman Tester. Thank you. Is Senator Manchin on? He is
not. Okay.
So I think we will close this out. I do want to thank the
witnesses from the GAO, VFW, and from Kaiser, and the VA for
being here. This hearing demonstrated VA has a long way to go
to meet the veterans' needs for modern facilities, and I think
we have identified steps the VA needs to take and actions that
we need to get done here in Congress. I look forward to working
with the VSOs, my colleagues, and the VA in providing the VA
the funding and the authorities they need to be successful
while continuing rigorous oversight to ensure the funds are
used wisely on construction projects, to get those projects
across the line.
On that note I will keep the record open for a week.
One final thing before I adjourn, about a month ago this
Committee held a hearing on four nominations: Mr. Remy, who is
to be the Deputy Secretary in charge of the JAC--and, by the
way, if the VA would communicate with the DoD and the DoD would
communicate with the VA, it would solve a lot of the problems
we deal with here every day. That is his job. He is also going
to head up the IT. We all know, on this Committee, the IT
challenges that the VA is having right now with electronic
medical records and other things, scheduling and others.
The next person was Ms. Ross, who is Congressional Affairs.
That is the person who can help us get legislation done so
everybody can achieve success, and we can do legislation that
actually meets the needs of our veterans that the VA can
implement. Important position also.
And Ms. Donaghy, who is going to be the head of the
Accountability and Whistleblower Protection. I do not need to
tell folks how important that position is. It is critically
important.
And last but not least, General Quinn, who is due to be the
Under Secretary for Memorial Affairs. It is obvious what this
person does. In some of the toughest times in these people's
lives, when a loved one passes, the Director of Cemetery
Affairs is critically important in that.
Well, long story short, somebody on this Committee has put
a hold on those four nominees. I do not know who that is. I
cannot find out. But I want to point out a couple of things.
No. 1, they passed unanimously from this Committee. No. 2, you
are not hurting those guys. You are hurting the veterans they
serve. You are hurting the VA. And if we are going to hold the
VA accountable, it is patently unfair not to give them a full
slate of employees that are confirmed so that we can hold them
accountable.
And finally, if they are being held because the VA is not
stepping up and doing something, let this Committee know. If it
is a reasonable request, more than likely we will help you get
the VA to achieve that goal. If it an unreasonable request,
then, of course, if it is without merit then that is very
unfortunate, because these are four good people that passed
this Committee unanimously, and I would request whoever has a
hold on them to either come tell me or release your hold. If
there are problems with the VA we will deal with that in a
separate arena.
With that this hearing is adjourned. Thank you.
[Whereupon, at 4:44 p.m., the Committee was adjourned.]
APPENDIX
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Material Submitted for the Hearing Record
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