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98–692 2016

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 

( 

Available via the World Wide Web: http://www.fdsys.gov 


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COMMITTEE ON VETERANS’ AFFAIRS 

JEFF MILLER, Florida, Chairman 

DOUG LAMBORN, Colorado 

GUS M. BILIRAKIS, Florida, Vice-Chairman 

DAVID P. ROE, Tennessee 

DAN BENISHEK, Michigan 

TIM HUELSKAMP, Kansas 

MIKE COFFMAN, Colorado 

BRAD R. WENSTRUP, Ohio 

JACKIE WALORSKI, Indiana 

RALPH ABRAHAM, Louisiana 

LEE ZELDIN, New York 

RYAN COSTELLO, Pennsylvania 

AMATA COLEMAN RADEWAGEN, 

American Samoa 

MIKE BOST, Illinois 

CORRINE BROWN, Florida, Ranking 

Minority Member 

MARK TAKANO, California 

JULIA BROWNLEY, California 

DINA TITUS, Nevada 

RAUL RUIZ, California 

ANN M. KUSTER, New Hampshire 

BETO O’ROURKE, Texas 

KATHLEEN RICE, New York 

TIMOTHY J. WALZ, Minnesota 

JERRY MCNERNEY, California 

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. 


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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 


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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 


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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. 


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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 


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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. 


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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 


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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. 


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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 evidencebased 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 


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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 APPEN- DIX] 

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 


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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 


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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 


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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, 


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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. 


VACREP0180 with DISTILLER
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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 


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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 geogVerDate Aug 31 2005 13:14 Oct 27, 2016 Jkt 000000 PO 00000 Frm 00018 Fmt 6633 Sfmt 6633 Y:\98-692.TXT PAT

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raphies 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? 


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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 stagVerDate Aug 31 2005 13:14 Oct 27, 2016 Jkt 000000 PO 00000 Frm 00020 Fmt 6633 Sfmt 6633 Y:\98-692.TXT PAT

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nate 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 


VACREP0180 with DISTILLER
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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? 


VACREP0180 with DISTILLER
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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. 


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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 


VACREP0180 with DISTILLER
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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. 


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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 doc- tor 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 


VACREP0180 with DISTILLER
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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? 


VACREP0180 with DISTILLER
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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 


VACREP0180 with DISTILLER
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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. 


VACREP0180 with DISTILLER
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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 


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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—— 


VACREP0180 with DISTILLER
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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 


VACREP0180 with DISTILLER
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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. 


VACREP0180 with DISTILLER
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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? 


VACREP0180 with DISTILLER
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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—— 


VACREP0180 with DISTILLER
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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 highperforming healthcare systems. The reason we went to those is because when we—— 


VACREP0180 with DISTILLER
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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 highestperforming 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. 


VACREP0180 with DISTILLER
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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—— 


VACREP0180 with DISTILLER
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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. 


VACREP0180 with DISTILLER
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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 


VACREP0180 with DISTILLER
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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. 


VACREP0180 with DISTILLER
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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 


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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. 


VACREP0180 with DISTILLER
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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. 


VACREP0180 with DISTILLER
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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 


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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. 


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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.] 


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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. 

f 

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. 


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• 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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