```

[Senate Hearing 114-748]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 114-748

THE FUTURE OF THE VA: EXAMINING THE COMMISSION ON CARE REPORT AND VA'S 
                                RESPONSE

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

                                HEARING

                               BEFORE THE

                     COMMITTEE ON VETERANS' AFFAIRS
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                           SEPTEMBER 14, 2016

                               __________

       Printed for the use of the Committee on Veterans' Affairs

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         Available via the World Wide Web: http://www.fdsys.gov
         
         
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                     COMMITTEE ON VETERANS' AFFAIRS

                   Johnny Isakson, Georgia, Chairman
Jerry Moran, Kansas                  Richard Blumenthal, Connecticut, 
John Boozman, Arkansas                   Ranking Member
Dean Heller, Nevada                  Patty Murray, Washington
Bill Cassidy, Louisiana              Bernard Sanders, (I) Vermont
Mike Rounds, South Dakota            Sherrod Brown, Ohio
Thom Tillis, North Carolina          Jon Tester, Montana
Dan Sullivan, Alaska                 Mazie K. Hirono, Hawaii
                                     Joe Manchin III, West Virginia
                       Tom Bowman, Staff Director
                 Ethan Saxon, Democratic Staff Director
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                            C O N T E N T S

                              ----------                              

                          September, 14, 2016
                                SENATORS

                                                                   Page
Isakson, Hon. Johnny, Chairman, U.S. Senator from Georgia........     1
Blumenthal, Hon. Richard, Ranking Member, U.S. Senator from 
  Connecticut....................................................    26
Brown, Hon. Sherrod, U.S. Senator from Ohio......................    27
Boozman, Hon. John, U.S. Senator from Arkansas...................    28
Moran, Hon. Jerry, U.S. Senator from Kansas......................    30
Tester, Hon. Jon, U.S. Senator from Montana......................    32
Manchin, Hon. Joe, III, U.S. Senator from West Virginia..........    54
Sullivan, Hon. Dan, U.S. Senator from Alaska.....................    58
Tillis, Hon. Thom, U.S. Senator from North Carolina..............    61

                               WITNESSES

McDonald, Hon. Robert A., Secretary, Department of Veterans 
  Affairs; accompanied by Hon. David J. Shulkin, M.D., Under 
  Secretary for Health...........................................     2
    Prepared statement...........................................     4
        Enclosure................................................    11
    Response to posthearing questions submitted by:
      Hon. Johnny Isakson........................................    37
      Hon. John Boozman..........................................    38
      Hon. Sherrod Brown.........................................    38
      Hon. Mazie K. Hirono.......................................    40
Schlichting, Nancy M., Chairperson, Commission on Care...........    41
    Prepared statement...........................................    43
    Response to posthearing questions submitted by Hon. Mazie K. 
      Hirono.....................................................    65
Harvey, Hon. Thomas E., Esq., Member, Commission on Care.........    48
    Prepared statement...........................................    50
Steele, Jeff, Assistant Director, Legislative Division, The 
  American Legion................................................    66
    Prepared statement...........................................    67
Ilem, Joy J., National Legislative Director, Disabled American 
  Veterans.......................................................    71
    Prepared statement...........................................    72
Augustine, Lauren, Senior Legislative Associate, Iraq and 
  Afghanistan Veterans of America................................    79
    Prepared statement...........................................    81
Campos, CDR Rene A., USN (Ret.), Deputy Director of Government 
  Relations, Military Officers Association of America............    87
    Prepared statement...........................................    89
Fuentes, Carlos, Deputy Director of National Legislative Service, 
  Veterans of Foreign Wars.......................................    93
    Prepared statement...........................................    95
Weidman, Richard, Executive Director for Policy and Government 
  Affairs, Vietnam Veterans of America...........................   102
    Prepared statement...........................................   104

                                APPENDIX

American Federation of Government Employees, AFL-CIO and The AFGE 
  National VA Council; prepared statement........................   117
Association of VA Psychologist Leaders, Association of VA Social 
  Workers, Nurses Organization of Veterans Affairs, Veterans 
  Affairs Physician Assistant Association, American Federation of 
  Government Employees, National Federation of Federal Employees, 
  National Nurses United, American Psychological Association, and 
  National Association of Social Workers; position paper.........   119
Johnson, Sharon, MSN, RN, President, Nurses Organization of 
  Veterans Affairs (NOVA); letter................................   120
Paralyzed Veterans of America (PVA); prepared statement..........   121

 
THE FUTURE OF THE VA: EXAMINING THE COMMISSION ON CARE REPORT AND VA'S 
                                RESPONSE

                              ----------                              

                     WEDNESDAY, SEPTEMBER 14, 2016

                                       U.S. Senate,
                            Committee on Veterans' Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:30 p.m., in 
room 418, Russell Senate Office Building. Hon. Johnny Isakson 
presiding.
    Present: Senators Isakson, Moran, Boozman, Heller, Tillis, 
Sullivan, Blumenthal, Brown, Tester, and Manchin.

      OPENING STATEMENT OF HON. JOHNNY ISAKSON, CHAIRMAN, 
                   U.S. SENATOR FROM GEORGIA

    Chairman Isakson. I call this meeting of the Veterans' 
Affairs Committee of the U.S. Senate to order. Secretary 
McDonald and Dr. Shulkin, we are glad to have you here today.
    We are going to change our methodology just a little bit. 
We have two votes: one at 2:45 and one following that vote. We 
are going to run the hearing continuously. The Ranking Member 
and I are going to waive opening statements so we can go 
directly to Secretary McDonald to make his full statement for 
the record. Then, we will go into as much Q&A as we can.
    When I have to leave, hopefully there will be somebody here 
I can turn it over to so we keep the hearing rolling and go 
right into the second panel and then later into the third 
panel. So, with your cooperation, we will work with those two 
votes and make sure we do not have to shut down. If we do shut 
down, it is only for a couple of minutes.
    Let me just welcome everybody again to this meeting of the 
Senate Veterans' Affairs Committee. We had a great hearing on 
the innovations taking place at the VA last week, and I think 
today's hearing will be equally as good because the Commission 
on Care was a great project that examined the Veterans Health 
Administration (VHA), its delivery system for our veterans. I 
think it had a lot of recommendations in it that are very 
meritorious, a lot of thought-provoking recommendations.
    I appreciate the embrace that Secretary McDonald has given 
to ideas from others that have come in. We have talked a little 
bit about them, so I know he is going to have a great testimony 
for us here today. Let me welcome the Secretary of VA, Robert 
McDonald, to make his testimony, and we will go from there. We 
welcome Dr. Shulkin to be here for his testimony as well.

     STATEMENT OF HON. ROBERT A. MCDONALD, SECRETARY, U.S. 
 DEPARTMENT OF VETERANS AFFAIRS; ACCOMPANIED BY HON. DAVID J. 
           SHULKIN, M.D., UNDER SECRETARY FOR HEALTH

    Secretary McDonald. Thank you, Mr. Chairman.
    Chairman Isakson, Ranking Member Blumenthal, Members of the 
Committee, thank you for this time to talk about VA's ongoing 
transformation and the Commission on Care's final report. I 
wish the House had allowed me the same opportunity last week, 
but neither I nor the veterans service organizations (VSOs) 
were invited to testify in person.
    I ask that my written statement be submitted for the 
record.
    Chairman Isakson. Without objection.
    Secretary McDonald. Thank you, sir.
    First let me thank Ms. Schlichting for chairing the 
Commission. I know it was not easy, but Nancy did an 
outstanding job in keeping things together.
    Overall, I see the Commission's report as validation of the 
course we have been on for the past few years. There is hardly 
anything in the report that we have not already thought of or 
are not already doing as part of our ongoing MyVA 
transformation efforts.
    We differ on some details, but we wholeheartedly agree with 
the intent of almost all the Commission's recommendations--15 
out of 18.
    We certainly agree on how wrong it would be to privatize VA 
health care. Privatization would be a boon for some health care 
corporations, but as seven leading VSOs told the Commission in 
April, it could threaten the financial and clinical viability 
of some VA medical programs and facilities, which would fall 
particularly hard on the millions of veterans who rely on VA 
for almost--for all or almost all of their care.
    There are many things that VA offers that nobody else 
offers. We have a unique lifetime relationship with our 9 
million patients. Nobody else offers that. Our mental health 
care is integrated with our primary care and specialty care. 
Nobody else offers that.
    VA health care is whole-veteran health care, customized to 
meet veterans' unique needs, including care for many nonmedical 
determinants of health and well-being, like education services, 
career transition support, housing assistance, disability 
compensation, and many others. Nobody offers that.
    Our research innovations made VA a leader in many areas 
such as prosthetics, spinal cord injury, traumatic brain 
injury, post-traumatic stress disorder, polytrauma, and 
telehealth. Nobody else offers that.
    If we send all veterans in the community to find care, they 
would all lose the choice of integrated, comprehensive care 
tailored for veterans by people who know veterans and are 
dedicated to serving them. That is what VA is to veterans, and 
that is why you do not find veterans demanding Community Care 
as the only choice. The demand for that only choice comes from 
elsewhere. It does not come from veterans. Veterans know 
better.
    I have tested this during my time as Secretary. When 
somebody tells me that veterans should only have the choice of 
the Choice program, I ask them, are you a veteran? By and 
large, the answer is no. Then I ask, have you talked to 
veterans about this, and I get the same answer. Then, I probe a 
little bit more and I found out that beneath the banner of 
choice are always two things: interest and ideology.
    Let's face it, privatization would put more money into the 
pockets of people running health care corporations. It is in 
their interest, so of course it makes sense to them, even if it 
is not what veterans want or need.
    Then there is the ideologues. They only deal with the issue 
in the simplest, laziest theoretical terms: Government bad, 
private sector good. That is as far as the thinking goes. 
Thankfully, most members of the Commission were more 
understanding.
    On one point I strongly disagree with the Commission, which 
is the idea of an independent board of directors for the 
Veterans Health Administration. I probably do not need to say 
much about that since the Constitution probably will not allow 
it, but I will say that a VHA governance board does not make 
any sense to me, as a business executive. It would only make 
matters worse by complicating the bureaucracy at the top and 
spreading the responsibility for VHA so that no one knows who 
is ultimately responsible.
    The fact is, we already have a governance board. Congress 
is our governance board. And, if Congress works the way it 
should, nobody would be talking about adding another layer of 
bureaucracy to VA.
    VA is not the holdup on increasing access. We are doing 
that. We have been doing that for more than 2 years now. VA is 
not the holdup on expanding community care. We are doing that, 
too. We submitted a plan to streamline and consolidate our 
community care programs last October, almost a year ago. What 
has happened to it?
    VA is not the holdup on hiring more medical professionals 
or getting rid of real estate that costs us much more each year 
than it is worth, or adding more points of care where they are 
needed. We currently have eight major medical construction 
projects and 24 major medical leases needing authorization. 
They are already funded, but we still need a green light from 
Congress to move forward.
    We are not even the holdup on holding people accountable 
for wrongdoing. Ask the former VA employee in Augusta, GA, 
recently convicted of falsifying health care records. He is 
facing sentencing that could include years in prison and 
thousands of dollars of fines. All told, we have terminated 
over 3,755 employees in the past 2 years. We have made 
sustainable accountability part of our ongoing leadership 
training.
    The Veterans First Act would help us hold people 
accountable, and we look forward to seeing it brought to the 
Senate floor for passage. The Senate Appropriations Committee 
has also approved a budget nearly equal to the President's 
request, but again, we need to see some follow-through.
    The holdup in our very real and ongoing MyVA transformation 
is our need for congressional action. We have submitted over a 
hundred proposals for legislative changes that we put in the 
President's 2017 budget. No results yet.
    I detailed our most urgent needs in my August 30 letter to 
the Committee. They include: approving the President's 2017 
budget request to keep up with rising costs and medical 
innovation; extending authorities to maintain services like 
transportation to VA facilities in rural areas and vocational 
rehabilitation; fixing provider agreements to keep long-term 
care facilities from turning veterans out to avoid the hassle 
of current requirements; and ending the arbitrary rule that 
will not let VA's dedicated, conscientious medical 
professionals care for veterans for more than 80 hours in any 
Federal pay period.
    We also need you to act on modernizing our archaic claims 
appeals process. Under the current law, with no significant 
changes in resources, the number of veterans awaiting a 
decision will nearly triple in the next 10 years from 500,000 
today to almost 1.3 million. We submitted a plan to reform the 
appeals process in June. We developed a plan, with the help of 
the VSOs, State and county veterans officials, and other 
veterans advocates. They are all onboard. We just need Congress 
to get on board.
    I am only after what is best for veterans. As you know, I 
am not running for office. I am not angling for a promotion. I 
could have taken an easier job 2 years ago but I did not. I 
answered the call of duty, thinking only of giving veterans the 
benefit of what I learned at West Point, in the Army, and 33 
years in the private sector running one of the most admired 
companies in the world. I have tried to do that.
    Now, 2 years into the transformation process, my only 
concern is to see it continue. I know Nancy will tell you 
transformation is a marathon, not a sprint. It will take 
several years to turn any large organization around. To turn VA 
around, we must maintain our momentum of change, and we cannot 
do that without cooperation of Congress and passage of some of 
the legislation we talked about. That is an absolute certainty.
    The Commission, the VSOs, and VA are all in agreement on 
this: Congress must act or veterans will suffer. That is 
unacceptable to me and I know that it is unacceptable to you. 
So, what can we do to break this impasse and get things moving? 
Whatever it takes, I will do it. Just let me know what it is.
    Thank you, Mr. Chairman.
    [The prepared statement of Secretary McDonald follows:]
         Prepared Statement of Robert A. Mcdonald, Secretary, 
                  U.S. Department of Veterans Affairs
    Chairman Isakson, Ranking Member Blumenthal, and Members of the 
Committee, Thank you for the opportunity to discuss the future of the 
Department of Veterans Affairs (VA) and the Commission on Care's Final 
Report. I am accompanied today by Dr. David Shulkin, Under Secretary 
for Health.
    Mr. Chairman, two years ago I was tasked to transform VA for the 
21st Century. Since then, VA has established a comprehensive, 
enterprise-wide transformational process named MyVA, which has already 
increased Veterans' access to healthcare, significantly reduced Veteran 
homelessness, and begun improving Veterans' experience with VA's 
benefits and services.
    This past January, I came before this Committee and described 
MyVA's five critical strategies:

    1. Improving the Veteran experience,
    2. Improving the employee experience--so we can better serve 
Veterans,
    3. Improving internal support services,
    4. Establishing a culture of continuous improvement, and
    5. Enhancing strategic partnerships.

    These five MyVA strategies are about rebuilding trust with 
Veterans, their families and survivors, and the American people. 
They're a concerted approach to leveraging VA's immense scope and scale 
so we can give every Veteran an exceptional experience that's easy, 
consistent, and memorable. MyVA is about looking at VA from a Veteran's 
perspective; doing everything we can to make the Veteran's experience 
effective at meeting Veterans' needs and earning their confidence. MyVA 
is leaving old, unresponsive ways of doing business behind and changing 
VA into the high-performing organization it must be to serve Veterans 
in the 21st century.
    At that January hearing, I also spoke about VA's 12 ``Breakthrough 
Priorities.'' Designed to improve the delivery of timely care and 
benefits to Veterans, our Breakthrough Priorities are helping VA 
concentrate efforts on serving Veterans and their families and 
survivors while aligning resources for success. Eight of the 12 
Priorities are about directly improving service to Veterans. Four of 
the Priorities represent critical enablers to reform internal systems 
and give employees the tools and resources they need to consistently 
deliver an exceptional Veteran experience. One Priority is Improving 
the Employee Experience. For the last two days, I have been at a 
Leaders Developing Leaders Conference with almost 600 of VA's Leaders. 
Immediately after this hearing, I am returning to the conference. 
Developing our leaders and ensuring they have the resources that allow 
for them to deliver a seamless, integrated, and responsive Veterans 
experience is critical to our future success.
    We are rigorously managing each Breakthrough Priority. One senior 
executive is responsible for each Priority. A cross-functional, cross-
Departmental team is in support. Teams meet bi-weekly with me or the 
Deputy Secretary to focus on each Priority, discuss progress, identify 
roadblocks, and find solutions. Weekly updates to Department leadership 
and our Department-wide MyVA Dashboard track progress using established 
metrics. Meeting these 12 Breakthrough Priorities is a challenge, but 
we're committed to results for Veterans.
        summary of breakthrough priorities and progress to date
    We are building the momentum to carry our comprehensive MyVA 
transformation years into the future. This transformation will have a 
wide-ranging impact on Veterans, their families, VA employees, and 
stakeholders. The trust Veterans have in VA has already increased by 
more than eight percentage points. We also owe it to the American 
people to be good stewards of the resources allocated to us. As 
examples of the impact we are having on Veterans, employees, and 
taxpayers, I highlight the following major accomplishments:
For Veterans, Servicemembers, Families, and Survivors
    The most important outcome for Veterans is their success after 
leaving military service. They should be thriving--receiving the 
healthcare they need; in meaningful, reliable employment; and secure in 
their prosperity. For MyVA, the outcome we seek is to make access to 
the care and services Veterans have earned predictable, consistent, and 
easy. We will gauge how Veterans view their partnership with VA as a 
measure of the effectiveness of MyVA's efforts. Indicators of progress 
around the Veterans Experience Priority fall into three mutually 
reinforcing categories:

1.  Trust in VA among America's Veterans.
     VA has implemented a new trust measurement to gauge 
Veteran's trust that the VA will fulfill its commitment to our Nation's 
Veterans. This measure has increased by 7 percentage points since its 
implementation in December 2015.
     VA has completed 11,716,685 same day appointments for FY 
2016 to date.
2.  Customer experiences marked by effectiveness, ease, and positive 
emotion.
     In July 2016, 96.36% of appointments were within 30 days 
of the clinically indicated or Veteran's preferred date; 85.05% were 
within 7 days; 22.44% were same-day appointments. In July 2016, average 
wait times for completed appointments were 4.72 for primary care, 6.60 
for specialty care, and 2.77 for mental health care.
     VHA has reduced the Electronic Wait List from 56,271 
appointments to 33,373, a 40.69% reduction between June 1, 2014 and 
August 15, 2016.
     VHA and the Choice contractors created more than 3.2 
million authorizations for Veterans to receive care in the private 
sector from June 1, 2015 through May 31, 2016. This represents a 7% 
increase in authorizations when compared to the same period in 2014/
2015.
     Veterans are now able to schedule optometry and audiology 
appointments directly at 71 VA medical centers without going through 
primary care for a referral. This not only allows many Veterans to get 
their eyeglasses and hearing aids quicker; but also eliminates some 
demand on primary care. This will be implemented at all VA medical 
centers by December 2016.
3.  Completion of critical customer-centric improvement projects, 
sponsored by the Veterans Experience team at VA.
     Enrolling in the VA healthcare system is much easier now 
than it was just a few months ago. Since June 30, when a revamped 
healthcare enrollment experience was launched on Vets.gov, over 9,200 
have enrolled instantaneously online. An additional 850 have enrolled 
by telephone as a result of process improvements made by our Health 
Enrollment Center. This includes removal of an actual ink signature 
requirement and acceptance of an electronic signature. This change has 
eliminated unnecessary and inefficient back and forth mailings with the 
Veteran.
4.  By the end of this year, every Veteran in crisis will have their 
call promptly answered by an experienced responder at the Veterans 
Crisis Line. The VA has partnered with the Departments of Labor, 
Housing and Urban Development, the U.S. Interagency Council on 
Homelessness, and other Federal agencies to make substantial progress 
toward the Administration's goal of ending veteran homelessness in 
communities across the country.
     Through June 2016, more than 56,500 homeless or at-risk 
Veterans and their family members have obtained permanent housing or 
were prevented from becoming homeless as a result of VA's targeted 
homeless services.
     Since 2010, the number of Veterans experiencing 
homelessness in the United States has been cut nearly in half, with a 
17 percent decrease in Veteran homelessness between January 2015 and 
January 2016.
5.  Expanding the network of Community Veteran Engagement Boards to 
ensure Veterans' needs in local communities are met
     To date, 80 fully formed boards have been established with 
a target of 100 by December 2016.
     VA leaders have begun participating more actively in 
community-based efforts to maximize the collective impact of local 
services, stakeholders, and Federal/state agencies working together to 
improve Veteran outcomes.
     The first-ever meeting of community boards from around the 
country occurred just last week.
For VA Employees
    The most important outcome for employees is to feel engaged and 
empowered to create the highest level of impact every day. Each 
employee must have meaningful work and a clear view of its benefit to 
Veterans. Measuring how employees view their experience with VA will 
reflect the effectiveness of MyVA's efforts. Indicators of progress 
around the Employee Experienced Priority include:

     Hiring rates in speed of hire shortened.
     Inclusion of elements targeting how to improve employee 
engagement and customer service in Senior Executive performance plans.
     Policy in place requiring all VA supervisors and employees 
to have a customer-service standard in their performance plans.
     Completion of Leaders Developing Leaders (LDL) training: 
This training equips leaders with skills in applying LDL concepts and 
tools for strengthening employee commitment, building trust and 
personal accountability, reinforcing principle-based decisionmaking, 
and improving processes to serve and care for Veterans; working 
projects or initiatives to make VA more effective and efficient.

        - Nearly 80,000 VA leaders and frontline staff from across VA 
        have participated in LDL training thus far.
        - LDL Training is cascaded down to frontline staff using 
        materials, messaging, and tools developed and distributed for 
        2-day, 1-day and half-day modules.
        - Over 500 registered LDL projects have been completed or are 
        underway; all aligned with at least one of the 12 Breakthrough 
        Priorities.
        - Recent survey data confirms the positive impact of LDL 
        training and participation in projects on employee engagement.

     83% of employees who have had LDL training with a project 
state they know how they relate to VA transformation compared to 62% 
who have no LDL.
     79% of employees who have had LDL training with a project 
state they feel valued for the work they do compared to 61% who have no 
LDL.
     79% of those employees who have had LDL training with a 
project state they are witnessing positive changes in VA's culture 
compared to 58% who have no LDL.
For American Citizens and Taxpayers
    Through proper governance and transparent management systems, VA 
will deliver effective services and benefits, be a good steward of 
fiscal resources, reliably protect personal information, and 
effectively anticipate and efficiently adapt to the future needs of our 
Nation's Veterans. For example, our Medical-Surgical supply chain will 
have delivered $150 million in cost avoidance by the end of 2016. These 
savings are available for redirection to priority Veteran programs and 
outcomes.
    Thanks to the continuing support of Congress, VSOs, union leaders, 
our dedicated employees, states, and private industry partners, we have 
made tremendous headway over the past 18 months. Congress has passed 
some key legislation, such as the Veterans Access, Choice, and 
Accountability Act and the Clay Hunt Suicide Prevention for American 
Veterans Act, which gives VA more flexibility to improve our culture 
and ability to execute effectively. But much more needs to be done.
                           commission on care
    Mr. Chairman, the direction we have taken and the progress we have 
made has been largely validated by the Commission on Care in its Final 
Report. The President and VA find 15 of the18 recommendations in the 
Commission's report feasible and advisable. Further, after thoroughly 
reviewing the report, I am pleased to say that 12 of the Commission's 
18 recommendations are objectives VA has already accomplished or has 
been working toward for the past two years as part of the MyVA 
transformation.
    I strongly support the Commission's intent that creating a high-
performing, integrated health care system that encompasses both VA and 
private care is critical to serving the needs of Veterans. In fact, VA 
has outlined our approach to achieve this same goal in our Plan to 
Consolidate Community Care, submitted to Congress in October 2015. This 
plan would provide Veterans with the full spectrum of healthcare 
services and more choice without sacrificing VA's foundational health 
services on which many Veterans depend.
    At the same time, it is critical that we preserve and continue to 
improve the VA health care system and ensure that VA fulfills its 
mission. Veteran Service Organizations, having decades of experience 
advocating for generations of our Nation's Veterans, have made it 
crystal clear that they believe VA is the best place for Veterans to 
receive care. Many VSOs fear that the Commission's vision would 
compromise VA's ability to provide specialized care for spinal cord 
injury, prosthetics, Traumatic Brain Injury, Post Traumatic Stress 
Disorder, and other mental health needs, which the private sector is 
not as equipped to provide. We share their concern and therefore do not 
support any policies or legislation that will lead to privatization, 
which I am pleased the Commission did not recommend outright. 
Privatization is not transformational. It's more along the lines of 
dereliction of duty.
    VA also strongly disagrees with the Commission on its proposed 
``board of directors'' to run the Veterans Health Administration (VHA). 
Such a board is neither feasible nor advisable for both constitutional 
and practical reasons. The U.S. Department of Justice has concluded 
that the proposed structure of the Board would violate the separation 
of powers. Among other concerns, the Constitution prevents Congress 
from appointing persons to exercise authority over Executive branch 
agencies and as such, would prevent the proposed board from exercising 
the authorities assigned to it by the Commission. The Commission's 
proposal would also seem to establish VHA as an independent agency, 
undoing the work of the VSOs in supporting VA as a Cabinet-level 
department. The powers exercised by the proposed board would undermine 
the authority of the Secretary and the Under Secretary for Health, as 
well as weaken ownership of the MyVA transformation and VHA 
performance. This could potentially disrupt and degrade VA's 
implementation of critical care decisions that affect Veterans. The 
proposed independent VHA agency would also run counter to our ongoing 
efforts to improve the Veteran's experience by integrating Veterans 
healthcare with the many other services provided to Veterans by the 
Veterans Benefits Administration and the National Cemetery 
Administration.
    We do, however, strongly agree with the idea of external advice and 
counsel to ensure that VA is operating with the greatest degree of 
efficiency and effectiveness for Veterans. At present, VA is served by 
25 advisory committees, including a newly reconstituted Special Medical 
Advisory Group, which consists of leading medical practitioners and 
administrators, and a newly established MyVA Advisory Committee, which 
brings together business leaders, medical professionals, government 
executives, and Veteran advocates. These advisory committees advise VA 
on strategic direction, facilitate decisionmaking, and introduce 
innovative business approaches from the public and private sectors. 
With their help, the Department has begun the process of transforming 
VHA from a loose federation of regional healthcare systems to a highly 
integrated national enterprise, based on a new model of care with VA as 
both the payer and provider. This model will provide Veterans with the 
full spectrum of healthcare services and additional choice, but without 
sacrificing VA's foundational health services upon which many Veterans 
depend.
    Although we differ with the Commission on these and other issues 
and are pursuing alternative approaches where warranted, we agree with 
the Commission that many changes planned by MyVA, recommend by the 
Commission and strongly supported by VSOs, will likely require 
resources and remedies that only Congress can provide. These needs are 
addressed in VA's detailed responses to the recommendations in the 
Commission on Care's Final Report, which are included as an enclosure 
to this letter.
                     veterans choice program update
    The Veterans Access, Choice, and Accountability Act of 2014 (VACAA) 
was signed into law on August 7, 2014, and mandated that VA implement a 
new community care program, the Veterans Choice Program (VCP), to 
increase timely access to healthcare.
    VA increased access to Veterans through an integrated system of 
care. VHA staff and Choice contractors created over 3 million 
authorizations for Veterans to receive care in the private sector from 
October 2015 through July 2016. This is a 42 percent increase in 
authorizations when compared to the same time period last year. From FY 
2014 to FY 2015, Community Care appointments increased about 20 percent 
from 17.7 million in FY 2014 to 21.3 Million.
    Congress mandated that VA implement VCP in 90 days. Implementing a 
nationwide program in 90 days is unprecedented and led to many growing 
pains for Veterans, community providers, and VA. During the initial 
year of the program, VA met with Veterans, community providers, leading 
healthcare experts, and staff across the country to hear concerns and 
identify solutions.
    In October 30, 2015, VA submitted to Congress our Plan to 
Consolidate Community Care, which lays out our vision of a consolidated 
community care program that is easy to understand, simple to 
administer, and meets the needs of Veterans, community providers, and 
VA staff. This plan incorporates feedback from key stakeholders, 
including VHA field leadership and clinicians, representing diverse 
groups and backgrounds. VA has already begun what work we can without 
legislation to make the plan a reality.
    Over the course of the last 12 months, our Choice Provider network 
has grown by 85 percent. The network now has over 350,000 providers and 
facilities across the Nation. Over 1.0 million unique Veterans have 
used the Veterans Choice Program (VCP). Over 100,000 Veterans with 40-
mile eligibility used VCP through June 2016. Authorizations for care 
under the Veterans Access, Choice, and Accountability Act (VACAA) have 
increased by 81 percent over nine months (October 2015 to June 2016), 
and VCP authorizations have quadrupled from approximately 301,000 in FY 
2015 to almost 1.3 million in FY 2016.
    In order to immediately implement changes to the Choice Program, VA 
brought in new leadership to oversee all Community Care Programs. Under 
this new leadership, VA quickly began to improve the Choice Program and 
laid out a plan to drive toward a future that delivers the best of VA 
and the community.
    New programs of this magnitude take time, but VA is making steady 
progress by implementing immediate improvements to the Choice Program, 
by developing innovative solutions to improve the community care 
experience, and by driving toward the future--a single consolidated 
program that is easy to understand, simple to administer, and meets the 
needs of Veterans, community providers and VA staff. VA will also 
continue to strengthen its partnerships with other Federal health care 
providers, the Department of Defense (DOD) and Indian Health Service, 
as well as with Tribal Health Programs (THPs), academic teaching 
affiliates, and federally Qualified Health Centers (FQHCs). DOD 
resource sharing agreements support the Nation's defense readiness 
mission, while relationships with academic teaching affiliates align 
with VA's education and research missions. High-quality providers in 
IHS, THPs, and FQHCs promote access to exceptional care for Veterans 
where the live, including rural and medically underserve communities.
    In the last two years, we've asked Congress to be our partner as we 
strive to be the No. 1 customer-service agency in the Federal 
Government. That is our vision, and we cannot get there without your 
help. Our Veterans preserved our Nation's opportunity to prosper, and 
Veterans and their families deserve nothing less than a seamless, 
unified Veterans experience across VA and across the country. They are 
counting on us, VA, as well as Congress, to do our part. We need you to 
continue to partner with us now more than ever. You were there side by 
side with us as we implemented the VCP. You have been with us side by 
side as we listened to our Veterans and other stakeholders in providing 
the needed legislative changes to make choice that much better. Since 
the implementation of the VCP, VA partnered with Congress to change the 
law four times, including:

     Removing the enrollment date requirement for Choice, 
allowing more Veterans to receive community care.
     Redefining criteria of 40-mile eligibility by using 
driving distance from a primary care physician, increasing the number 
of Veterans eligible for the program.
     Implementing new unusual-or-excessive-burden criteria, 
increasing access to care for Veterans who do not meet other 
eligibility criteria.
     Expanding the episode of care authorization from 60 days 
up to one year, improving continuity of care and reducing the 
administrative burden on Veterans and providers.

    Additionally, with your help we have made countless VCP contract 
and program improvements including:

     Executing over 45 contract modifications to improve 
Program performance.
     Improving timeliness of payments to community providers by 
removing the requirement that all medical documentation must be 
received prior to payment.
     Reducing administrative burden for medical record 
submission for community providers by streamlining the documents 
required.
     Enhancing care coordination for Veterans, with embedded 
contractor staff now with VA staff at 14 locations and continuing 
increases in the number of embedded staff locations.
     Creating dedicated teams of VA and contractor staff that 
meet regularly to deliver community care improvements.
     Partnering with the community through electronic health 
exchanges:

        - VHA is connected to 72 of the eHealth Exchange participants. 
        There are 116 participants total.
        - Through these 72 connections, VHA is now connected to 755 
        hospitals, more than 10,000 clinics, and over 8,400 pharmacies.
        - Total unique enrolled Veteran patients available for 
        information exchange with community partners is now over 
        590,000.
        - Over 1.3 million Veteran health records are currently 
        available for exchange.

     Over the course of the last 12 months, the Choice Provider 
Network has grown by 85 percent. The network now has over 350,000 
providers and facilities, including over 200 academic hospitals and 
centers over 50 % of CMS participating accountable care 
organizations.\1\
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Organizations/5kdu-cnmy
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     As of May 2016, it takes approximately six days to contact 
the Veteran, obtain their provider and appointment preferences, and 
work with the community provider to schedule an appointment compared to 
11 days in May 2015.
     Choice contractor call center metrics have continued to 
improve:

        - Call abandon rate is less than 2 percent.
        - Call hold time is no more than 7 seconds.
        - First call resolution is over 96 percent.

     Over 9 million Veterans have received Choice Cards.
     As of August 1, 2016, 847,451 are eligible based on 
mileage or hardship.
     As of August 1, 2016, 1,721,909 Veterans are eligible 
based on wait time.
     As of August 1, 2016, 2,569,360 Veterans are eligible 
based on mileage or wait time.
     Choice Authorizations have quadrupled from approximately 
301,000 in FY 2015 to almost 1.3 million in FY 2016 thus far.

    With your help, and with the assistance of our third-party 
administrators, we have developed and implemented a number of 
innovative solutions to aid our community care programs. VA community 
care innovative solutions are part of the Department's continued 
commitment to improve the community care experience across the country 
by streamlining and strengthening clinical and business processes. The 
innovative solutions address a number of topics, example are listed 
below:

     Care Coordination: Alaska VA Healthcare System staff will 
replace a portion of the intermediary role currently performed by 
Choice contractor TriWest to make scheduling an inherently VA activity. 
This business process change is in direct response to concern by Alaska 
Veterans who reported that calling out-of-state Choice contractors 
resulted in delays with their care coordination, mostly attributed to 
time zone differences and a lack of understanding of Alaska's unique 
geography.
     Increasing Access Points: On May 25, 2016, VA Central 
Office in conjunction with VA Palo Alto Health Care System announced a 
partnership with CVS MinuteClinic. The program, a VA innovation, 
focused on the treatment of minor illnesses and injuries, expands 
access points of care to locations that are closer to Veterans' homes 
and at hours that are more convenient.
     Gaining Efficiencies: VA developed a new tool that it 
anticipates will expedite medical claims processing. The Productivity 
Monitoring Tool tracks claims status and monitors the number of claims 
each employee verifies, distributes, denies, rejects, or sends to 
payment. It also provides granular information by claim and program 
type. With this tool, VA can view productivity data by claims processor 
and identify potential areas for improvement. Additionally, the 
Provider Rapid Response Team, comprising representatives across VA, 
Health Net, and TriWest, was established to quickly address community 
provider inquiries and resolve systemic issues with provider payment 
processes.
                       driving toward the future
    VA cannot accomplish the ongoing transformation envisioned by MyVA 
or recommendations from the Commission without critical legislative 
changes and funding. VA has aggressively pursued these needed changes 
and funding with Congress.
    More than 100 legislative proposals for Veterans were included in 
the President's 2017 Budget. Many of these proposals are vital to 
maintaining our ability to purchase community care. We continue to work 
to move these critical initiatives forward and are encouraged by the 
fact that most have been considered in legislative hearings or included 
in omnibus bills moving toward floor consideration, like the bipartisan 
Veterans First Act, which passed the Senate Veterans Affairs' Committee 
unanimously. These bills include some of the provisions of the 
Purchased Health Care Streamlining and Modernization Act we submitted 
to Congress in May 2015, such as an enhanced-use lease authority, 
compensation reform for medical professionals, and a measure of 
budgetary flexibility to respond to Veterans emerging needs and 
overcome artificial funding restrictions on providing Veterans care and 
benefits. These provisions would go a long way toward ensuring the 
success of MyVA, but other important legislative issues still need to 
be addressed, especially the consolidation of VA's many purchased care 
authorities and modernization of VA's archaic claims appeals process.
    VA is doing all that it can within current law and current funding 
to better serve our Veterans. But, VA and the Veterans we serve need 
action by Congress in the remainder of the 114th Congress on a number 
of issues to continue the transformation of VA and provide the fullest 
and best-delivered benefits and services Veterans need and deserve. 
Specifically, Congress must pass a clean version of the President's 
full budget request; provide more budget flexibility to allow VA to 
operate more efficiently; act on several critical legislative 
priorities; and act to prevent the lapse of critical programs. Among 
the critical initiatives requiring legislative action from Congress are 
appeals modernization, purchased care modernization, and workforce 
enhancement. Listed below are VA's top legislative priorities:
Budget
     2017 Budget--It is critically important to Veterans that 
VA has full-year funding consistent with the President's Budget 
request, and that VA not be forced to operate for a protracted period 
of time under Continuing Resolutions.
Extenders
     Without Congressional action, a number of existing VA 
authorities will expire before the end of the fiscal year, 
September 30, 2016, with others expiring at the end of calendar year 
2016. Extensions of these authorities are necessary in order for VA to 
continue providing important services to Veterans. Below are some of 
the most critical significant negative results of a failure of Congress 
to act:

        - VA would have to largely terminate the Veterans 
        Transportation Service, on which thousands of Veterans rely for 
        access to medical care.
        - VA would have to close the Manila VA Regional Office.
        - VA's home loan program could be disrupted.
        - Vocational rehabilitation benefits for injured Servicemembers 
        would be interrupted.
                         legislative priorities
     Appeals Reform
    VA is already pursuing changes in staffing and technology to 
improve the current appeals process, but VA is badly in need of 
statutory structural changes to appropriately address and fix the 
current pending inventory of appeals. Our goal is to greatly simplify 
the appeals process and provide Veterans with a quality appeals 
decision within one year of their appeal. Legislation proposed in the 
House and Senate has been scored as cost-neutral and without 
legislative action from Congress, the timeline for decisions under the 
current disability claims appeals system will continue increase to the 
detriment of Veterans.
    Without this much needed legislation, VA projects that Veterans 
will be waiting an average of 10 years for a final decision on their 
appeal by the end of 2027.
     Provider Agreements
    In order to ensure that Veterans are receiving necessary care 
through the fullest complement of non-VA providers, VA purchased care 
authorities must be clarified and modernized. VA and its provider 
partners who use provider agreements are facing continuing uncertainty, 
so expeditious action is necessary. VA transmitted the VA Purchased 
Health Care Streamlining and Modernization Act to Congress on May 1, 
2015. As the VA has previously testified, legislation authorizing the 
VA to purchase this care in certain circumstances through agreements 
must also be subject to certain provisions of law governing Federal 
contracts, including providing specific employment protections.
     Workforce Enhancements
    The following changes are necessary to recruit and retain critical 
professionals: Removal of the 80-hour pay period requirement, which is 
not efficient or appropriate for many medical professionals and is not 
in line with the private sector and special pay authority for VAMC and 
VISN Directors is important in order to secure and retain the best 
talent available in hospital system management.
     West Los Angeles
    HVAC and SVAC have advanced bills to facilitate changes for VA's 
West LA campus that will be of great benefit to Veterans, but we still 
need legislative action. The Master Plan represents a community 
consensus after years of litigation, as well as a vision and a model 
for providing services to homeless and at-risk Veterans. Failure to 
enact this legislation will halt progress on this important initiative, 
which has wide support in the community.
     Construction and Leasing
    VA needs Congressional authorization for numerous construction and 
leasing projects across the country to increase Veterans' access to 
care closer to their homes. Funding has already been appropriated for 
many of these projects.
     Telehealth
    Legislation is pending that will help ensure that VA can guarantee 
the fullest use of telehealth capabilities in order to provide easier 
access to VA healthcare, especially in rural areas and across state 
lines.

    Thank you again for this opportunity and thank you for all you do 
for Veterans. We are extremely grateful for having your support; 
however, we must work together as the time to act is now. America's 
Veterans did their duty. They answered the call; we, Congress and VA, 
must now do our part.

                                                          Enclosure
                                                        August 2016
                     Department of Veterans Affairs
                    Review of the Commission on Care
    Over the past two years, the Department of Veterans Affairs (VA) 
has been working energetically, through its MyVA initiative, to 
transform the Veterans Health Administration (VHA) from a loose 
federation of regional health care systems to a highly integrated 
national enterprise, based on a new model of care with VA as both the 
payer and provider. This model will provide Veterans with the full 
spectrum of health care services, plus more choice, but without 
sacrificing VA's foundational health services that many Veterans depend 
on.
    In October 2015, VA delivered to Congress a plan for evolving our 
current system into a high-performance network based on timely access 
to foundational services and integration of private-sector providers. 
Building on more than a decade of working with community partners 
through multiple mechanisms, this plan would consolidate the various 
mechanisms, expand our network of providers, and enhance the network's 
capability to deliver services essential to Veterans' health.
    Many of the Commission on Care's (Commission) recommendations are 
aimed in the same direction and are already being implemented as part 
of VHA's MyVA transformation. VA finds 15 of 18 Commission 
recommendations feasible and advisable (#1-3, 5-8, 10-16, and 18) and 3 
not feasible or advisable (#4, 9, and 17). VA is already implementing 
changes with the same intent as 12 recommendations (#1-3, 5, 7-8, 10-
11, and 13-16); recommends alternative approaches to 2 recommendations 
to bring them in line with other MyVA reforms (#6 and 12); and will 
work with the President, Congress, Veterans Service Organizations, and 
other stakeholders on recommendation #18.
    Many of the Commission's recommendations also require action by 
Congress. VA has aggressively pursued legislative changes and funding 
that would enable VA to achieve its MyVA vision. More than 100 
proposals for legislative changes were included in the President's 2017 
Budget. VA also submitted to Congress in May 2015 the Purchased Health 
Care Streamlining and Modernization Act, parts of which have been 
incorporated into the Veterans First Act in the Senate. Many of VA's 
proposals, which are vital to maintaining our ability to purchase non-
VA care, are pending Congressional action.
Recommendation #1: VHA Care System--``Across the United States, with 
        local input and knowledge, VHA should establish high-
        performing, integrated community-based health care networks, to 
        be known as the VHA Care System, from which Veterans will 
        access high-quality health care services.''
    VA finds this recommendation feasible and advisable and is already 
implementing changes as part of VA's MyVA transformation, with some 
modifications in approach to achieve the vision described above.
    In October 2015, VA submitted to Congress its Plan to Consolidate 
Community Care, which lays out our vision of a consolidated community 
care program that is easy to understand, simple to administer, and 
meets the needs of Veterans, community providers, and VA staff. This 
plan incorporates feedback from key stakeholders, including VHA field 
leadership as well as clinicians, representing diverse groups and 
backgrounds.
    Immediate steps to improve the stakeholder experience were 
identified and included in the plan, including reducing unnecessary 
steps in the processes to enroll and connect Veterans with community 
care; improving communications between VHA, provider, and Veterans; 
improving care coordination in the long term for Veterans through 
improved exchange of certain medical records; and aligning the 
Veteran's community care journey along five major touch points: 
eligibility, community care network, referral and authorization, care 
coordination, and provider claims payment.
    Eligibility: The Plan recommends the creation of eligibility 
criteria to streamline the many different requirements for community 
care into standard criteria without opening community care to all 
enrolled Veterans. This is VA's principal point of difference with the 
Commission on its proposed VHA Care System. VA believes the 
Commission's recommendation to extend community-care eligibility to all 
Veterans by eliminating the Veteran Choice Program's (VCP) current time 
and distance criteria (30 days and 40 miles) is not advisable without 
Congressional funding due to the expected cost increase and desire to 
not sacrifice VA's four statutory missions: delivering hospital care 
and medical services to Veterans, educating and training health 
professionals, conducting medical and prosthetic research, and 
providing contingency support to other Federal agencies during 
emergencies. Many VSOs fear that the Commission's vision would 
jeopardize VA's ability to provide specialized care for spinal cord 
injury, prosthetics, Traumatic Brain Injury, Post Traumatic Stress 
Disorder (PTSD), and other mental health needs, which the private 
sector is not as equipped to provide. For this reason, VA opposes 
elimination of the current time and distance criteria.
    Community Care Network: VA has since begun developing the 
requirements for the new community-care network contract, with 
standards and criteria developed from input by industry, facility 
staff, and program office staff representing a broad spectrum of needs. 
These standards and criteria will be included in the draft Request for 
Proposal (RFP) for the community care network that will open for bid 
later in calendar year 2016. Legislation is needed to improve Veterans 
experience by consolidating existing programs and standardizing 
eligibility criteria.
    Referral and Authorization: To ensure that Veterans have access to 
the full spectrum of health care services, VA will focus on areas in 
which it can excel (VA-delivered foundational health services) and 
develop locally defined community partnerships for specialty care as 
needed. Standards and criteria for specialty care referrals are 
currently being developed for inclusion in the draft RFP. While the 
primary care provider will coordinate referrals for specialty care 
within the integrated VHA Care System, VA should be seen as the prime 
provider for special emphasis services. For example, VA is the leader 
in integrating primary care and mental health care and should be seen 
as the primary care provider for these services. When VA cannot provide 
a primary care provider, Veterans will be able to select from 
credentialed providers in the high-performing network.
    Care Coordination: The Plan stresses care coordination with a focus 
on customer service, emphasizing the need for care coordination for 
Veterans who receive community care as well as in VA. This coordination 
would include both the primary care provider staff as well as other VA 
staff. In cases where VA cannot provide the care coordination for 
Veterans, the services may be provided through the community care 
network. In other cases, VA coordinators make more sense. This is true 
in the Alaska VA Healthcare System, where VA staff will fill an 
intermediary role currently performed by VCP contractor TriWest to make 
scheduling an inherently VA activity, in response to local concern that 
calling out-of-state VCP contractors resulted in delays in care 
coordination, mostly attributed to time-zone differences and a lack of 
understanding of Alaska's unique geography.
    Provider Claims Payment: VHA is also already working to streamline 
reimbursement methodologies among its various community care programs 
and to develop a standardized, transparent process for reimbursing 
providers in an integrated delivery network. VHA and the Centers for 
Medical and Medicaid Services (CMS) are identifying CMS innovations in 
value-based payment methods on a limited basis. Legislation is needed 
to revise reimbursement rates under the Veterans Access, Choice, and 
Accountability Act to allow for flexibility from Medicare fee-for-
service reimbursement methodologies to value-based methodologies of the 
future.
    Legislation is needed to effectively consolidate existing community 
care programs, which would reduce confusion among Veterans, community 
providers, and VA staff. The Commission states that in order to achieve 
the recommendations, VA must have ``flexible and smart procurement 
policies and contracting authorities.'' VA strongly agrees and has 
aggressively pursued legislative changes that would ensure that the 
appropriate level of flexibility is available to best serve Veterans. 
In May 2015, VA submitted the Purchased Health Care Streamlining and 
Modernization Act to Congress. This legislation supports key points of 
VA's Plan to Consolidate Community Care and would allow VA to enter 
into agreements with individual community providers outside of Federal 
Acquisition Regulations, without forcing providers to meet excessive 
compliance burdens.
    VA is also concerned that the Commission's cost estimates do not 
accurately reflect the likely cost of its proposed system. From a 
baseline estimate of $71 billion, the Commission estimates that the 
cost of its recommended option for Veterans' health care for fiscal 
year (FY) 2019 ranges from $65 billion to $85 billion, with a middle 
estimate of $76 billion. However, the Commission estimates the cost 
could increase to $106 billion in FY 2019 if VA is unsuccessful in 
tightly managing the network and focusing on costs. We appreciate the 
analysis underpinning the Commission's estimates, but caution that the 
cost of implementing the Commission's recommendation is likely to be 
significantly higher, for the following reasons:

     The estimates do not include the substantial investment in 
information technology (IT) resources that would be required to fully 
integrate VA care with community care or the administrative/contractual 
costs of operating the community-delivered services component of the 
integrated network.
     The estimates assume that VA can realign and consolidate 
personnel in five years to best provide health care to Veterans, which 
is an aggressive timeline.
     The estimates do not address the cost of realigning or 
divesting capital assets as additional care is delivered in the 
community. While VA agrees in principle with the Commission's 
recommendation to develop and implement a robust strategy for meeting 
and managing VHA's facility and capital-asset needs (see Recommendation 
#6), we note that the realignment, consolidation, and divestiture of 
capital assets will require substantial resources and time.
     The estimates are highly dependent on Veteran enrollment 
in, reliance on, and utilization of VA health care, all of which are 
difficult to predict, as most Veterans enrolled in the VA health care 
system have other sources of health care coverage. Extending community 
care to more Veterans could cause Veterans who now rely on Medicare, 
Medicaid, or private insurance to use VA care for more of their health 
care needs because of lower copays or greater convenience, increasing 
VA's costs.
     Finally, we must caution that the estimates do not reflect 
the entire VA Medical Care budget as they do not include the cost of 
programs that are not modeled by the VA Enrollee Health Care Projection 
Model. These programs include readjustment counseling, non-medical 
homeless programs, Caregivers, Health Professions Educational 
Assistance Program, Income Verification Match, CHAMPVA, Spina Bifida, 
Children of Women Vietnam Veterans, etc. In total, they are estimated 
to cost $8.2 billion in FY 2017.
Recommendation #2: Enhancing Clinical Operations--``Enhance clinical 
        operations through more effective use of providers and other 
        health professionals, and improved data collection and 
        management.''
    VA finds this recommendation feasible and advisable and is already 
implementing changes as part of VA's MyVA transformation, with some 
modifications in approach.
    VHA is already engaged in processes to make full use of the skills 
held by VHA providers and other health professionals. VHA is a leader 
in the use of clinical pharmacists to increase capacity by renewing 
prescriptions or ordering medication refills independently, after the 
initial prescription by a licensed physician or nurse practitioner. In 
addition, many VA clinical pharmacists have a scope of practice that 
provides prescribing authority and enables them to run pharmacist-
managed clinics focused on medication therapy management for chronic 
diseases. For example, about one third of all prescriptions for the 
treatment of the Hepatitis C virus are written by clinical pharmacists
    VHA has also developed a draft regulation that would standardize 
full practice authority for advanced practice nurses, to assure a 
consistent continuum of health care services by the practitioners 
across VHA and decrease the variability in advanced nurse practice that 
currently exists as a result of disparate State practice regulations. 
The proposed draft regulation was published in the Federal Register; we 
are now reviewing comments received. Implementation of full practice 
authority will increase Veteran access by alleviating the effects of 
national health care provider shortages on VA staffing levels and 
enabling VA to provide additional health care services in medically 
under-served areas. Implementing this policy, as recommended by the 
Commission, will allow VA to parallel the policies of other Federal 
agencies, including the Department of Defense (DOD) and the Indian 
Health Service, as well as many institutions in the private sector.
    VHA's Diffusion of Excellence initiative is an operational 
infrastructure that allows for sharing of promising practices across 
the enterprise. This model incentivizes and institutionalizes the 
identification and diffusion of practices nationwide so that every 
facility has the opportunity to implement the solutions that are most 
relevant to them. In the first round of submissions, 13 Gold Status 
Best Practices were selected from more than 250 ideas through a series 
of reviews and a final ``Shark Tank'' competition. The next step 
assigned each Gold Status Best Practice and their originating Gold 
Status Fellows to Action Teams managed by the Diffusion Council for 
implementation VHA-wide.
    VA seconds the Commission's call for Congress to relieve VHA of 
bed-closure reporting requirements under the Millennium Act. The Act's 
arbitrary requirements have not kept up with changes in the Veteran 
population or the health care environment. Legislation is needed to 
remove the Act's bed change reporting codified at 38 U.S.C. 8110(d) and 
the staffing level and service requirements specific to such bed 
changes under 38 U.S.C. 1710B(b), while retaining staffing and service 
requirements for all other Extended Care Services. VA would replace the 
mandated congressional reporting of bed closures with a stronger, 
clearer, and more stringent internal process to review and if 
appropriate, approve bed closure proposals.
    VA is already moving forward to hire and train more clinical 
managers and medical support assistants (MSAs). In response to section 
303 of the Veterans Access, Choice, and Accountability Act of 2014 
(Public Law 113-146), each VA Medical Center now has a Group Practice 
Manager (clinical manager). Additional hiring and training of these 
group practice managers will continue through February 2017. VHA is 
also developing new training and hiring procedures for MSAs throughout 
the organization as part of MyVA. VA has developed and launched an MSA 
hiring project called ``Hire Right, Hire Fast'' and is currently 
piloting a new hiring procedure that allows for industry-standard bulk 
hiring of MSAs to hire MSAs within 30 days of a vacancy. Two-week, 
standardized onboarding training for all new MSAs is also being 
developed and piloted. Both new processes will begin being deployed 
nationally this fall.
Recommendation #3: Appealing Clinical Decisions--``Develop a process 
        for appealing clinical decisions that provides veterans 
        protections at least comparable to those afforded patients 
        under other federally-supported programs.''
    VA finds this recommendation feasible and advisable and is already 
implementing changes as part of VA's MyVA transformation, with some 
modifications in approach, taking into account important differences 
between the mission and authority of the VA health care system and 
other federally-supported programs.
    VHA is already in the early stages of developing a regulation in 
response to the Commission's recommendation. This regulation will 
establish a cohesive baseline national policy for clinical appeals. A 
clinical appeals regulation will be published for notice and comment in 
accordance with the Administrative Procedure Act. Recently enacted 
legislation in section 924 of the Comprehensive Addiction and Recovery 
Act of 2016 establishes an Office of Patient Advocacy in the Office of 
the Under Secretary for Health. In addition, in 2015 VHA established 
the Office of Client Relations to assist Veterans clinical care access 
concerns.
    An interdisciplinary panel will be tasked with evaluating feedback 
from these offices and other Veteran support resources to improve the 
overall clinical appeals process, consistent with external benchmarks 
and factors described by the Commission, Federal regulations and 
statutes, and sound clinical practice. The resulting recommendations 
may differ in certain aspects from those envisioned by the Commission, 
but will undoubtedly be a uniform, fair, world-class clinical appeals 
process that protects Veterans and is fully compliant with law and 
regulation. VA's revised process will complement the Veterans 
Experience Office's efforts to better serve Veterans, make improvements 
based on customer feedback, and engage the community.
Recommendation #4: Consolidation of Improvement Efforts--``Adopt a 
        continuous improvement methodology to support VHA 
        transformation, and consolidate best practices and continuous 
        improvement efforts under the Veterans Engineering Resource 
        Center.''
    VA finds this recommendation neither feasible nor advisable, but is 
already implementing an alternative approach that institutionalizes 
continuous improvement as part of VA's MyVA transformation.
    Health care improvement takes place within a complex socio-
technical system with multiple aspects of technology and technical 
expertise. Placing improvement under an engineering system, such as the 
Veterans Engineering Resource Center (VERC), may harness the technical 
aspects of improvement, but it will not provide the balance of critical 
cultural and people aspects. VA believes doing so would unbalance 
safety and efficiency and not be successfully transformational.
    Ongoing VA transformation efforts have been achieved by 
specifically aligning VERC assets with enterprise priorities so that 
appropriate engineering perspectives and skills are interwoven with 
current organizational priorities. To institutionalize VHA's commitment 
to continuous improvement, VHA will realign the VERC and the 
operational improvement arm of Strategic Analytics for Improvement and 
Learning (SAIL) under the Principal Deputy Under Secretary for Health. 
This will elevate the health-system subject matter experts who drive 
transformation in VHA's organizational structure, while continuing to 
use the VERC to ensure that supporting engineering resources are 
available across all VA transformational efforts.
    Additionally, VA's enterprise approach to improving performance--
through Lean Six Sigma (Lean) tools and training, Leaders Developing 
Leaders training, MyVA Performance Improvement Teams, MyVA Communities, 
the MyVA Ideas House, and many other initiatives across the VA system--
has taught us the value of a central repository for local programs and 
ideas, both successful and unsuccessful. To that end, VA and VHA have 
embraced the Integrated Operations Platform (IOP) hub, a knowledge-
management technology platform developed by the VERC in partnership 
with subject matter experts. The IOP consolidates information on 
continuous improvement activities across VA in key programs, and as a 
result, best practices and innovation activities are currently visible 
in one common platform.
    VA has invested significantly in developing Lean capacity at local 
levels so that problem solving is done at the lowest level and with a 
team of safety, quality, and improvement professionals. This prepares 
the local facilities to improve their current environment while 
scanning constantly for emergent new problems.
Recommendation #5: Eliminating Healthcare Disparities--``Eliminate 
        health care disparities among veterans treated in the VHA Care 
        System by committing adequate personnel and monetary resources 
        to address the causes of the problem and ensuring the VHA 
        Health Equity Action Plan is fully implemented.''
    VA finds this recommendation feasible and advisable and is already 
working to address each of the Commission's concerns as part of VA's 
MyVA transformation.
    VA's Office of Health Equity (OHE) was established in 2012 with the 
mission of championing health equity among vulnerable Veterans. The 
office developed the Health Equity Action Plan (HEAP) in 2014 in 
conjunction with the Health Equity Coalition and with concurrence from 
the Under Secretary for Health. The HEAP is VHA's strategic roadmap to 
reducing Veteran health disparities. It aligns with the goals of MyVA 
and the VHA Strategic Plan. VHA will make health equity a priority by 
directing implementation of the HEAP nationwide.
    The appropriate placement of OHE within the VHA organizational 
structure, along with adequate resources, will be considered as a 
priority component of the broader VHA restructuring addressed in 
Recommendation #12. This will take into account funding and staffing 
levels commensurate with the scope and size of Federal offices of 
health equity established in the Department of Health and Human 
Services, based on direction in the Affordable Care Act. VA will also 
identify health equity leaders and clinical champions in each VA 
District, Veteran Integrated Service Network (VISN), and Medical 
facility who can catalyze and monitor actions to implement the HEAP and 
further advance the elimination of health disparities.
    VA has undertaken systematic actions to identify and address 
healthcare disparities and inequality. Examples include the development 
of Hepatitis C Virus Disparities dashboard projected, scheduled for 
launch by the end of FY 2016; data support and research collaborations 
with the Quality Enhancement Research Initiative designed to identify 
health care disparities; establishment of a Population Health office 
that has developed clinical case registries focusing on the needs of 
special populations; and establishment of the Women's Health and 
Lesbian, Gay, Bisexual, Transgender (LGBT) program offices. VA Medical 
Facilities constitute 20 percent of Human Rights Campaign's Health Care 
Equality Index participants in 2016, and they were the only facilities 
to achieve leader status in some States.
Recommendation #6: Facilities and Capital Assets--``Develop and 
        implement a robust strategy for meeting and managing VHA's 
        facility and capital asset needs.''
    VA finds this recommendation feasible and advisable but recommends 
alternative approaches as part of VA's MyVA transformation.
    VA believes that the Commission's recommendation is critical to 
enabling the successful transformation of the large-scale health care 
system to a higher-performing integrated network to serve Veterans. 
Without a strong suite of capital planning programs, tools, and 
resources, VA will not be able to fully realize the benefits and 
Veteran outcomes expected from implementing an integrated health care 
network. VA also strongly agrees with the Commission that greater 
budgetary flexibility and greater statutory authority are essential to 
meeting VA's facility needs, realigning VA's capital assets, and 
streamlining processes to divest itself of unneeded buildings.
    VA recommends alternative approaches to two issues:

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

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

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

    Further analysis will be required to determine the specific level 
of resource investments required to implement the Commission's 
recommendations. It is clear that significant additional resources will 
be required. In addition, divestiture of unneeded VA assets is unlikely 
to generate significant savings because of the upfront resources 
required to execute the divestiture and minimal market value of the 
majority of VA's assets. Without the proper resources, tools, and 
authorities, attempts to divest of assets or streamline capital project 
execution will not be effective.
Recommendation #7: Modernizing IT Systems--``Modernize VA's IT systems 
        and infrastructure to improve veterans' health and well-being 
        and provide the foundation needed to transform VHA's clinical 
        and business processes.''
    VA finds this recommendation feasible and advisable and is already 
implementing changes as part of VA's MyVA transformation, with some 
modifications in approach, understanding that investments in IT will 
force difficult decisions concerning the allocation of limited 
financial resources among all VA programs and services, as well as 
across the Federal Government.
    As part of the MyVA Breakthrough Initiative to transform VA IT, VA 
will soon appoint a Senior Executive System (SES)-equivalent position 
for a Chief Health Informatics Officer (CHIO), reporting to the 
Assistant Deputy Undersecretary for Health for Informatics and 
Information, to collaborate with the VA Chief Information Officer (CIO) 
and the IT Account Manager toward developing a comprehensive health IT 
strategy and supporting budget proposal. The CHIO and ADUSH will be 
responsible for prioritizing all health technology programs and 
initiatives, with strategic technological guidance from the VA CIO and 
IT Account Manager for health. To comply with the Federal Information 
Technology Acquisition Reform Act (FITARA), the CHIO does not take the 
place of the VA CIO, but instead works in concert with IT management to 
ensure that health initiatives are appropriately prioritized within the 
portfolio, while the CIO works with VA senior leadership so that all 
technology initiatives are prioritized holistically, thus ensuring 
complete Veteran care. VHA and VA's Office of Information and 
Technology (OI&T) are already collaborating on the vision and strategy 
for a single integrated Digital Health Platform (DHP).
    VA has also established five district senior-executive Customer 
Relationship Manager positions to work with the local VHA, Veterans 
Benefits Administration, National Cemetery Administration, and staff 
office leaders, aggregate feedback for analysis by VHA and OI&T senior 
leadership, and enhance a continuous feedback loop. The VA CIO recently 
established the Veteran-focused Integration Process program within the 
Enterprise Program Management Office (EPMO) to facilitate continuous 
improvement and constant collaboration.
    The Commission recommended that the VA CIO develop and implement a 
strategy to allow the current nonstandard data to effectively roll into 
a new system, and engage clinical end-users and internal experts in the 
procurement and transition process. VHA is currently working with OI&T 
to ensure that the Veterans Information Systems and Technology 
Architecture (VISTA) data is mapped to national standards. The new CHIO 
will be responsible for engaging clinical end-users in the transition 
to the new DHP. The Under Secretary for Health and the CIO will 
establish a joint program office responsible for the implementation of 
the DHP. This process will be focused on delivering and coordinating 
high-quality care for Veterans.
    The EPMO is responsible for portfolio management and has adopted a 
policy of ``best-fit, buy-first'' in its Strategic Sourcing function. 
This ensures that existing best-in-class technology solutions are 
purchased whenever possible, rather than being developed and maintained 
by VA. These functions, in combination with the role and focus of the 
IT Account Manager, will provide the required focus for VHA to 
implement a comprehensive commercial off?the?shelf IT solution to 
include clinical, operational, and financial systems.
Recommendation #8: Modernizing Supply Chain--``Transform the management 
        of the supply chain in VHA.''
    VA finds this recommendation feasible and advisable and is already 
implementing changes as part of VA's MyVA transformation, with some 
modifications in approach.
    VA believes the components of this recommendation that suggest 
establishment of a Chief Supply Chain Officer (CSCO) and realignment of 
all procurement and logistics operations under the CSCO executive 
position are feasible and advisable, but it recommends an alternative 
approach to fulfill the Commission's intent. The structural solution 
recommended by the Commission would not adequately address underlying 
management challenges associated with organizational complexity and the 
need to improve integration processes impacting the supply chain. 
Realignment of VHA's supply-chain structure, including roles and 
responsibilities of the various VA Central Office staff offices, health 
networks, and medical facilities, should derive from and be integrated 
with the transformation of the overall VHA health care organization 
structure. The intent of the Commission will be met by addressing 
alignment issues as the supply-chain breakthrough initiative evolves 
and is synchronized with VHA's overarching strategies to transform 
VHA's organizational structure.
    As an alternative, the intent of the Commission is already being 
addressed in an effective manner under the current MyVA Breakthrough 
Initiative to transform VHA's supply chain. This initiative is a more 
comprehensive approach to fulfilling the Commission's intent and is 
already driving much needed improvements in data visibility and 
quality, synchronization of technology deployments, standardization, 
contract compliance, and training. Already in FY 2016, VHA supply-chain 
transformation efforts have yielded approximately $45 million in cost 
avoidance. VHA has also developed a two-year supply-chain 
transformation stabilization guidance that will put VHA in a far better 
position to make effective decisions and investments beyond FY 2018 for 
vertically aligning VHA's management structure and for more efficient 
sourcing and distribution of all clinical supplies and medical devices. 
This will increase the availability of supplies for the care of 
Veterans and result in cost avoidance for American taxpayers.
    With regard to the component of the recommendation asking VA and 
VHA to establish an integrated IT system to support business functions 
and supply-chain management, although feasible it is more advisable 
that technology investments beyond those currently in the pipeline 
should be avoided until such time that a mature supply-chain baseline 
is established, upon which prudent future IT investment decisions can 
be based. This is especially important given VA's Financial 
Modernization System initiative and emerging plans for a new DHP, both 
of which will impact legacy and contemporary supply-chain systems and 
interfaces, as well as influence system-improvement alternatives and 
investment decisions over the next two to five years. Supply-chain 
system improvements must be integrated and synchronized with enterprise 
financial and health care system enhancements to achieve efficiencies 
in service delivery and support analysis of integrated data to meet 
VHA's current and future needs.
    Finally, as suggested, VHA will continue to use VERC capabilities 
to support the transformation of supply-chain management in accordance 
with the MyVA Breakthrough Priority Initiative #12: VHA Supply Chain 
Transformation. As a point of clarification, the Commission report is 
technically incorrect in that the VERC is not leading the MyVA supply-
chain modernization initiative; rather, the VERC is a highly valued 
enabling organization engaged by the VHA Procurement and Logistics 
Office to support the MyVA initiative.
Recommendation #9: Governance Board--``Establish a board of directors 
        to provide overall Veterans Health Administration (VHA) Care 
        System governance, set long-term strategy, and direct and 
        oversee the transformation process.''
    VA finds the Commission's recommendation neither feasible nor 
advisable due to its unconstitutionality. However, VA believes the 
intent of the Commission can be achieved regarding the term appointment 
of the Under Secretary for Health.
    The U.S. Department of Justice has concluded that the proposed 
board of directors, as appointed and with the powers proposed by the 
Commission, would be unconstitutional for several reasons. Permitting 
Congress to appoint the board members would violate the Constitution's 
Appointments Clause (U.S. Const. art. II, Sec. 2, cl. 2), as well as 
the separation of powers, insofar as congressionally appointed board 
members would be exercising significant operational authorities within 
the executive branch. In addition, giving this board authority to 
reappoint the Under Secretary for Health would violate the Appointments 
Clause and the separation of powers. Finally, requiring the board to 
concur with the President in removing the Under Secretary for Health 
would give the board a veto authority over the President, impairing the 
President's ability to ``take Care that the Laws be faithfully 
executed'' (U.S. Const. art. II, Sec. 3) and violating the separation 
of powers.
    The proposed board would also seem to separate VHA from VA without 
necessarily insulating VHA from political pressure or improving VHA 
oversight or operations. The powers exercised by the proposed board 
would undermine the authority of the Secretary and the Under Secretary 
for Health and weaken ownership of the MyVA transformation and VHA 
performance, potentially disrupting and degrading VA's implementation 
of critical care decisions affecting Veterans. The independence granted 
VHA would run counter to our ongoing efforts to improve the Veteran's 
experience by integrating Veterans health care with the many other 
services VA provides through the Veterans Benefits Administration and 
the National Cemetery Administration. Furthermore, VA is already 
advised by the Special Medical Advisory Group, which consists of 
leading medical practitioners and administrators, and by the MyVA 
Advisory Committee, which brings together business leaders, medical 
professionals, government executives, and Veteran advocates with 
diverse expertise in customer service, strategy development and 
implementation, business operations, capital asset planning, health 
care management, and Veterans' issues. These committees already provide 
VA with outside expert advice on strategic direction, facilitating 
decisionmaking and introducing innovative business approaches from the 
public and private sectors.
    The Commission correctly notes that frequent turnover of the Under 
Secretary for Health has had a negative impact on VHA and greater 
stability in this important leadership position is needed. VA supports 
a term appointment of the Under Secretary for Health spanning 
Presidential transitions to ensure continuity of leadership and 
continued transformation of VHA. Previously, 38 U.S.C. 305 provided for 
a four-year term for the Under Secretary for Health with reappointment 
possible, but this provision was removed in 2006. A term appointment 
could be reinstated, beginning with the current Under Secretary for 
Health. This is critically important at this juncture given the need to 
see the ongoing transformation of VHA through to completion. Under 
Secretary for Health candidates are currently recommended by a 
commission established solely for that purpose. More analysis is needed 
to determine length of tenure and timing of reappointment.
Recommendation #10: Leadership Focus--``Require leaders at all levels 
        of the organization to champion a focused, clear, benchmarked 
        strategy to transform VHA culture and sustain staff 
        engagement.''
    VA finds this recommendation feasible and advisable and is already 
implementing changes as part of VA's MyVA transformation, with some 
modifications in approach.
    Recent or ongoing actions serving the Commission's intent include:

     VA has established the MyVA Task Force to guide VA through 
the transformation and established a Department-wide MyVA 
transformation office, which has formulated an integrated plan for 
transformation and is organizing the work on 12 breakthrough 
priorities.
     Metrics and key performance indicators are in place for 
each breakthrough priority. Each breakthrough priority has a 
designated, accountable official who is a member of the senior 
leadership team and a near-full-time responsible official in charge of 
driving progress.
     One of the 12 breakthrough priorities in the MyVA 
Transformation is employee engagement, for which we have a 
comprehensive action plan.
     VA has also established a MyVA Advisory Committee (MVAC) 
consisting of business leaders, medical professionals, government 
executives, and Veteran advocates. VA leadership meets quarterly with 
the MVAC, leveraging them as a corporate board from which to seek 
counsel on the overall transformation.
     MyVA has engaged leaders and employees throughout the 
organization via Leaders Developing Leaders (LDL) (over 54,000 
participants to date), VA101 (over 79,000 participants to date), 
various skills trainings, LDL projects, breakthrough pilots, broad 
communications to include the MyVA Story of the Week that goes out 
every Friday to all employees, and local initiatives.
     VA established MyVA district offices to facilitate 
transformation efforts throughout VA and also now conducts quarterly 
surveys of the VA workforce and incorporates this feedback into VA's 
transformation actions.
     Secretary, Deputy Secretary, and Under Secretary for 
Health have provided role models for transparency, Veteran focus, and 
principles-based leadership.
     VHA programs and program offices and the Office Human 
Resources & Administration (HR&A) representatives have held regular 
meetings in the past year to discuss a single, benchmarked concept for 
organizational health and coordinate messaging.
     VHA's National Leadership Council has endorsed 
personalized, proactive, patient-driven healthcare as one of VHA's 
strategic goals and strongly supported the formation of organizational 
health councils.
     Many VHA facilities and networks have some version of an 
organizational health council already existing.
     All program offices and facilities receive employee survey 
data annually down to the workgroup level to facilitate action planning 
and improve employee engagement. Brief pulse surveys have recently been 
implemented to measure employee engagement at the facility level 
quarterly.
     VHA's National Center for Organizational Development has 
use of Prosci change management materials and is pursuing a system-wide 
license.
Recommendation #11: Leadership Succession--``Rebuild a system for 
        leadership succession based on a benchmarked health care 
        competency model that is consistently applied to recruitment, 
        development, and advancement within the leadership pipeline.''
    VA finds this recommendation feasible and advisable and is already 
implementing changes as part of VA's MyVA transformation, with some 
modifications in approach.
    VA is consolidating leadership training behind a model we created 
as part of our MyVA transformation called ILEAD. Previously, VA had 
multiple leadership models across VA, which led to no common language 
or culture of leadership, and the models were not customized for VA. 
The enterprise-wide ILEAD modal will incorporate the principles of 
``servant leadership'' and VA's ICARE core values, aligned with the 
Federal Executive Core Qualifications. VHA and the VA Corporate Senior 
Executive Management Office are in the first stages of developing a 
competency model for VHA's senior leadership positions that will 
incorporate VA's ILEAD model with the technical competencies essential 
to successfully leading VHA's complex clinical operations. The VHA 
senior leader competency models will ultimately cascade down through 
the organization and be incorporated in its hiring, development, 
performance assessment, and advancement programs.
    VHA has outlined a leadership talent management strategy, 
benchmarked against the best practices in private industry, and begun 
initial development of processes and tools to give VHA greater insight 
and control over its health care leadership succession pipeline. 
Initial efforts are focused on creating a cadre of leaders to fill 
future medical center director positions. At the individual level, VHA 
senior executives serve as mentors to staff members, coaches for VHA 
leadership development programs, and models through their own 
leadership behavior.
    Current VHA initiatives serving the Commission's intent include:

     VHA made leadership development a priority of its MyVA 
effort, specifically to develop and retain passionate leaders to lead 
transformational efforts across the Administration.
     Filling key leadership position through a strong 
succession pipeline is identified as a priority for VHA in the 2016 VHA 
Workforce and Succession Strategic Plan.
     VHA has fully embraced the LDL philosophy--nearly 30,000 
VHA employees have participated in the leader-led cascaded training 
since it began in September 2015.
     VHA's National Leadership Council has adopted the VA 
leadership model, which now includes the concept of ``servant leader.''
     VHA leaders are integrally involved in the development and 
conduct of its formal leadership development programs. Leaders serve as 
coaches and mentors to program participants, in addition to personally 
facilitating sessions on a wide variety of leadership topics.
     VHA established the Healthcare Leadership Talent Institute 
(HLTI) to provide coordinated focus to VHA's talent management efforts. 
HLTI links VHA's workforce-planning and talent-development programs 
through the design and deployment of a set of talent management 
products and processes, which are in the pilot-testing phase.
     VHA is collaborating with the VA Corporate Senior 
Executive Management Office in implementing the December 2015 Executive 
Order on Strengthening the SES. These efforts include building a 
foundational leadership competency model for VA, instituting an 
executive rotation program to provide career-broadening experiences 
outside of each executive's current position, enhancing the SES 
performance management system, and outlining an SES-level talent-
management process for VA-wide implementation.
Recommendation #12: Organizational Structures and Management 
        Processes--``Transform organizational structures and management 
        processes to ensure adherence to national VHA standards, while 
        also promoting decisionmaking at the lowest level of the 
        organization, eliminating waste and redundancy, promoting 
        innovation, and fostering the spread of best practices.''
    VA finds this recommendation feasible and advisable but recommends 
an alternative approach to reorganizing the VHA Central Office (VHACO), 
consistent with VA's MyVA transformation.
    VHACO has undergone a stepwise ascent to improving the 
organizational structure to be more responsive to field requirements 
through the development of large programs responsible for 
organizational excellence and developing the future state health care 
plan. Immediate reorganization would divert attention from key 
organizational priorities such as improving access to healthcare. Known 
challenges associated with reorganization (which occurs with the 
regularity of each Presidential election cycle), are impaired employee 
engagement, loss of institutional knowledge, and diversion of attention 
from critical challenges such as insuring Veterans have same-day access 
to primary care and mental healthcare services. Legislation would be 
required to streamline appropriations, and review by oversight bodies 
would be impacted by the changes described. Finally, the reorganization 
for VHACO should derive from and be integrated with the transformation 
of the overall VHA health care organization structure. VHA will 
initiate a VHACO and VISN organization analysis at the beginning of 
calendar year 2017.
Recommendation #13: Performance Measurement--``Streamline and focus 
        organizational performance measurement in VHA using core 
        metrics that are identical to those used in the private sector, 
        and establish a personnel performance management system for 
        health care leaders in VHA that is distinct from performance 
        measurement, is based on the leadership competency model, 
        assesses leadership ability, and measures the achievement of 
        important organizational strategies.''
    VA finds this recommendation feasible and advisable and is already 
implementing changes as part of VA's MyVA transformation, with some 
modifications in approach.
    VHA is consolidating its healthcare operations metrics to provide a 
consistent, system-wide view of key performance indicators. In 
October 2015, VHA launched a Performance Accountability Work Group 
(PAWG) as a governance mechanism for performance measurement at all 
levels of the organization. The PAWG's first task was to conduct a 
systematic review of all existing performance measures (numbering over 
500), which resulted in a core set of approximately 20 key indicators, 
aligned to industry-wide approaches. SAIL scoring system is a critical 
component of these indicators, as well as predictive trigger systems 
that are the main inputs into a health operations center, which will 
facilitate centralized quality management.
    The leadership of the Office of Organizational Excellence 
(hereafter, 10E) has undertaken a strategic review across all current 
business processes to identify realignment opportunities--for instance, 
focusing ISO 9000 on its original target, which was the reprocessing of 
reusable medical equipment, and reinvesting the resources that will be 
freed up to enhance the ability of VERC to support the adoption of LEAN 
management approaches in support of the Under Secretary for Health's 
five priorities for strategic action. We have also engaged a senior 
industry consultant to assist us with the process of executive 
recruitment and development; created a system-level VHA Performance 
Scorecard aligned along transformational priorities; simplified the 
template used for senior healthcare executive performance management 
plans; and started work to align business functions within the Office 
of Organizational Excellence to promote a unified approach to 
performance reporting, performance improvement, and the identification 
and spread of strong clinical and business practices.
    Finally, the Diffusion of Excellence initiative (see Recommendation 
#2) sources best practices from frontline employees in the field, and 
brings the combined resources of 10E to support their implementation 
where appropriate in under-performing VA sites.
Recommendation #14: Cultural and Military Competence--``Foster cultural 
        and military competence among all Veterans Health 
        Administration (VHA) Care System leadership, providers, and 
        staff to embrace diversity, promote cultural sensitivity, and 
        improve veteran health care outcomes.''
    VA finds this recommendation feasible and advisable and is already 
working to address the Commission's concern as part of VA's MyVA 
transformation.
    VA has implemented training related to cultural and military 
competence, in some cases by partnering with external stakeholders 
(i.e., Equal Employment Opportunity Commission, the Joint Commission, 
Commission on Accredited Rehabilitation Facilities, DOD) and numerous 
national diversity-focused affinity and advocacy organizations. 
Examples of this coordinated training include Military Culture Training 
for Community Providers, Cultural Competency, Generational Diversity, 
Introduction to Military Ethos, Military Organization and Roles, 
Professional Stressors & Resources and Treatment Resources & Tools. 
From April 1, 2015, to July 22, 2016, the last four courses were 
accessed 2,533, 1,527, 1,172, and 1,070 times respectively. VA will 
continually assess its cultural and military competence training 
portfolio for content, target audience, and training modalities to 
identify additional training needs.
    VA Office of Diversity and Inclusion has mandatory training in the 
area of cultural competence as part of its Equal Employment Opportunity 
(EEO), Diversity and Inclusion, and Conflict Management training for 
all VA managers and supervisors and mandatory annual EEO, Workplace 
Harassment, and No FEAR training for all VA employees. VA also 
maintains programs focusing on targeted populations, including a LGBT 
Awareness Program (issues referenced in the Report), Office of Women's 
Health Services; Office of Health Equity; and a Center for Minority 
Veterans.
    VHA also has a large portfolio of clinical training programs, 
including several in the area of cultural and military competence in 
healthcare delivery. The Office of Health Equity developed virtual 
patient cultural competency training under the Employee Education 
Service contract for the Virtual Medical Center project. Presently, 
military competence training is available to any provider, and they are 
encouraged to take the training. Providers currently under contract are 
not required to complete the course, but future contracts will require 
completion.
Recommendation #15: Alternative Personnel System--``Create a simple-to-
        administer alternative personnel system, in law and regulation, 
        which governs all VHA employees, applies best practices from 
        the private sector to human capital management, and supports 
        pay and benefits that are competitive with the private 
        sector.''
    VA finds this recommendation feasible and advisable and is already 
working as part of VA's MyVA transformation, with some modifications in 
approach.
    VA supports the Commission's legislative proposal recommendation to 
establish a new alternative personnel system that applies to all VHA 
employees and falls under Title 38 authority, provided outside 
stakeholders support the legislative and policy changes required to 
create this new system.
    VA currently is preparing for consideration a legislative proposal 
for the FY 2018 budget process to modify Title 38 to give the Secretary 
the authority to establish a human-resources management system unique 
to VA.
    In the absence of a simple-to-administer alternative personnel 
system, VA has also proposed modifications to existing statutes to 
provide some relief to the currently complex personnel system and also 
help with recruitment and retention. These proposals include 
establishing an appointment and compensation system under Title 38 for 
VHA occupations of Medical Center Director, VISN Director, and other 
positions determined by the Secretary that have significant impact on 
the overall management of VA's health care system. VA is considering 
proposals to do the following:

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

    The VHA Strategic Human Resource (HR) Advisory Committee and 
Workforce Management and Consulting's Human Resource Development group 
are proposing a comprehensive VHA H.R. Readiness Program designed to 
improve the overall operational capabilities of the VHA H.R. community. 
The program will identify and integrate all existing and available 
internal and external training resources into a clear, consistent, and 
logical roadmap to readiness.
    Under the MyVA program, the Staff Critical Positions Initiative was 
launched to improve hiring of key leadership and other critical 
positions throughout VHA. VHA is moving ahead with the ``Hire Right, 
Hire Fast'' initiative for MSAs. The initiative is being piloted at a 
number of facilities and will provide products and guidance in 2016, 
including additional screening for customer service tools, an interview 
scoring rubric, job posting templates, H.R. milestone scripts, and much 
more. These products are designed to increase the supply of MSAs, as 
well as emphasize the customer service principles and skills needed for 
success.
    VHA has embarked on a Rapid Process Improvement Workshop effort 
within the H.R. community to examine the hiring process and identify 
improvement opportunities, to include operational processes and 
policies. Plans are also under development to establish a centralized 
architecture to designate lines of authority in setting training 
requirements, career paths, etc.
Recommendation #16: Effective Human Capital Management--``Require VA 
        and VHA executives to lead the transformation of HR, commit 
        funds, and assign expert resources to achieve an effective 
        human capital management system.''
    VA finds the Commission's recommendation both feasible and 
advisable and is already pursuing the following initiatives as part of 
VA's MyVA transformation.
    Hire Chief Talent Leader and Grant Authorities: VHA currently has a 
national search underway for its senior most H.R. executive position. 
Presently that role does not possess the authority recommended by the 
commission. It is anticipated that the HR&A transformation program, and 
the efforts associated with Recommendation 12 in conjunction with the 
Under Secretary for Health, would work together toward the optimal 
organization structure for H.R. across VA and within the 
administrations including appropriate authorities. This process will 
help clarify the ideal roles and responsibilities of the VHA Chief 
Talent Leader.
    Transform Human Capital Management: As part of MyVA, VA HR&A has 
launched the Critical Staffing Initiative to improve the hiring of key 
leadership and other critical positions throughout the VA. This effort 
has been working on near-term improvements to hiring medical center 
directors and other key medical center leaders. So far, this project 
has identified and is beginning to implement significant improvements 
to the hiring process and to proliferate hiring best practices across 
the organization. VA HR&A is currently planning a process to engage 
stakeholders across VA to identify next steps for implementing the 
recommendations outlined in recent study commissioned by VA. A concept 
paper entitled ``VISN H.R. Shared Service Excellence'' is also being 
evaluated. This concept paper incorporates a number of recommendations 
contained within the white paper noted above, but with specific 
emphasis on H.R. roles within the VISNs and VA medical centers. The 
Commission's recommendations will be taken into consideration in the 
process.
    Implement Best Practices: The VISN H.R. Shared Service Excellence 
paper is heavily weighted toward the sharing of best practices that 
have been developed in a few highly performing field H.R. 
organizations. Best practice sharing is also a significant component of 
the MyVA Critical Staffing initiative. Also, the HR&A transformation 
effort is intended to rely heavily on health care and other industry 
best practice models.
    Develop H.R. Information Technology Plan: The Commission's 
recommendation addresses an issue which VA's early H.R. transformation 
efforts are just beginning to address. While there are currently 
efforts planned and underway to implement H.R. Smart for personnel and 
payroll records, and USA Staffing to enable the recruiting process 
(acknowledged by the Commission), VA would benefit from casting these 
and other anticipated efforts in a more strategic IT plan. Such a plan 
would better enable implementation and integration prioritization and 
capital planning.
Recommendation #17: Eligibility for Other-than-Honorable Service--
        ``Provide a streamlined path to eligibility for health care for 
        those with an other-than-honorable discharge who have 
        substantial honorable service.''
    VA finds this recommendation neither feasible nor advisable.
    The Commission's own estimates indicate this change would cost $864 
million in FY 2019, increasing to $1.2 billion in FY 2033. This 
recommendation therefore appears to contemplate health care for anyone 
with another-than-honorable discharge. While VA agrees with the 
principle of serving this population of Veterans, the cost of doing so 
makes the recommendation not feasible at this time.
    Many Servicemembers with other-than-honorable discharges qualify 
for health care for service-connected conditions and other benefits 
under existing authorities. VA will continue to serve this population. 
VA is also drafting proposed regulations which will update and clarify 
38 CFR 3.12 and 17.34 to improve processes and procedures relating to 
character of discharge determinations and expand tentative health care 
eligibility for certain former Servicemembers.
    These changes will address many of the concerns raised by the 
Commission. For example, the rules will provide improved guidance about 
the consideration of mitigating factors such as extended overseas 
deployments, mental health conditions, and other extenuating 
circumstances. Also, VBA has, within the past year, updated its manual 
to streamline its other-than-honorable adjudicative procedures to 
expedite health care eligibility determinations and improve the Veteran 
experience by shortening the wait time.
Recommendation #18: Expert Advisory Body for Defining Eligibility and 
        Benefits--``Establish an expert body to develop recommendations 
        for VA care eligibility and benefits design.''
    VA finds this recommendation feasible and advisable.
    Substantial changes in the delivery of health care have occurred 
since Congress last comprehensively examined eligibility for VHA care 
through passage of Public Law 104-262, Veterans' Health Care 
Eligibility Reform Act of 1996, and taking a close look at eligibility 
criteria in light of current (and projected future) resources and 
demand makes sense in the context of VA's ongoing efforts to reshape 
the future of VA health care. VA will work with the President, 
Congress, Veterans Service Organizations, and other stakeholders to 
determine the path forward in the tasking of an expert body to examine 
and, as appropriate, develop recommendations for changes in eligibility 
for VA health care benefits.
    Recommendation 18 also includes a separate and distinct 
recommendation for VA to ``revise VA regulations to provide that 
service-connected-disabled Veterans be afforded priority access to 
care, subject only to a higher priority dictated by clinical care 
needs.'' While VA supports the objective, VA already has regulations 
(38 CFR 17.49) and policy in place giving priority in scheduling to 
service-connected Veterans and believes these meet and fulfill the 
Commission's intent.

    Chairman Isakson. Well, thank you very much, Mr. Secretary. 
We appreciate your testimony.
    Dr. Shulkin, were you going to testify----
    Dr. Shulkin. Yes, sir.
    Chairman Isakson [continuing]. Or are you here for moral 
support and hard questions? [Laughter.]
    Dr. Shulkin. Hard questions, Mr. Chairman.
    Chairman Isakson. Well, I have one question. Then I want to 
get to the Members of the Committee.
    For the Members that just arrived, we are going to go 
continuously through the votes. I am going to wait until the 
very last minute to go over and vote on vote one and come back 
after immediately voting on vote two. Hopefully, between the 
votes going back and forth we will be able to keep everything 
rolling throughout the hearing. We have got three great panels, 
headed off by Secretary McDonald, whom we appreciate for being 
here.
    Secretary McDonald, if you would look at Recommendation 
Number 1, which I know you have read and you referred to in 
your testimony, have you got any idea what you would estimate 
the cost of implementing Recommendation Number 1 from the 
Commission on Care?
    Secretary McDonald. Recommendation 1 is about establishing 
an integrated, high-performing, community-based health care 
network. In our plan, in October--I cannot remember the exact 
number; I am sure David will remember it, but we had different 
levels of cost, depending upon what we decide to take on. We 
are already in the process of establishing that network.
    David, do you want to kind of----
    Dr. Shulkin. Yep.
    The Secretary is referring to the plan that we submitted at 
the end of October 2015, where we currently spend, right now, 
about $13.5 billion a year on Community Care. That is the 
combination of Choice and Community Care funds.
    In order to make the changes that we suggested, we 
estimated that we would need $17 billion a year, because we 
wanted to fix the emergency medicine provision hole that so 
many veterans get stuck in. We need the investment in 
infrastructure to do care coordination in an integrated 
fashion. We think that that is the best use of money for 
taxpayers, that it is a good--it is actually an efficient plan. 
The Commission on Care's plan was far more expensive than that.
    Chairman Isakson. I think it contemplated putting together 
a network--the VA being a part of a total network with the 
private sector as well. Is that not correct?
    Secretary McDonald. Yes, sir, that is correct.
    Chairman Isakson. I think it probably contemplated also 
doing that within the contractors we have to date for the two 
gatekeepers for Choice, but just to issue a single seamless 
card. Is that correct?
    Secretary McDonald. Yes, sir, we would integrate the 
network. It would also include Department of Defense partners, 
Indian Health Service, and the other Federal partners that we 
have.
    Chairman Isakson. This is not a setup, but I would like to 
hear your answer: is it not true that in the Veterans First 
bill which this Committee passed out unanimously--that by the 
provisions in there for provider agreements, we are expanding 
the opportunity to VA to make that happen and make that 
possible?
    Secretary McDonald. Yes, sir.
    Chairman Isakson. That was the right answer. I just wanted 
to make sure we did that. [Laughter.]
    Secretary McDonald. I said in my prepared remarks that we 
would like Veterans First to get to the floor, that we are 
happy to help in any way we can to help you get it there.
    Chairman Isakson. We appreciate your continuous support on 
that.
    My last question----
    Secretary McDonald. We appreciate the Committee's 
leadership in putting it together.
    Chairman Isakson. My last question is really a comment. 
They have recommendations on IT, working on the IT system in 
the VA. I am still very interested in hearing how much progress 
you have made on interoperability of--and the program at 
Georgia Tech, which I think you all are under contract with 
Georgia Tech.
    Secretary McDonald. Yes, that is true.
    Chairman Isakson. I understand there has been a recent 
breakthrough that has helped on that.
    Secretary McDonald. Yes.
    Chairman Isakson. Can I get a comment on that, Dr. Shulkin?
    Dr. Shulkin. Yeah. Yeah, I would be glad to.
    First of all, just as you mentioned, Mr. Chairman, in April 
of this year we did certify interoperability with the 
Department of Defense, but under LaVerne Council's leadership 
we have created a concept of what is called the Digital Health 
Platform. This is really taking where the industry is to a new 
level. It is going to increase our ability to have 
interoperability with community partners, which is one of the 
recommendations of the Commission on Care.
    What you are referring to is Georgia Tech has really a 
fantastic technology center. We have developed a conceptual 
prototype for this that I think we are looking forward to 
sharing with Members of this Committee, that we think is really 
a path forward to take us to a new level.
    Chairman Isakson. Good. We appreciate the progress that you 
are making.
    Senator Blumenthal?

           HON. RICHARD BLUMENTHAL, RANKING MEMBER, 
                 U.S. SENATOR FROM CONNECTICUT

    Senator Blumenthal. Thanks, Mr. Chairman.
    Secretary McDonald, I think in your letter to the 
President, dated August 6 or August 2, I am sorry, 2016--you 
indicated that you had concerns about the cost estimates that 
the Commission put together to reflect various options on the 
VHA care system model, which ranged, I think, as low as $65 
billion to $106 billion in fiscal year 2019, depending on 
enrollment, network management, and other factors.
    I want to say I appreciate that the Commission really 
devoted itself to seeking to improve the VA health care system, 
and I certainly appreciate its recommendations, but I wonder if 
you could explain the VA's concern with those Commission 
estimates.
    Secretary McDonald. This is the nub of the issue in terms 
of the difference between the Commission report and our point 
of view on the network. I am sure Nancy will comment more on it 
later.
    The question is, how much unfettered access to the private 
sector do you allow the individual veteran, and who takes 
responsibility for integrating their health care? We believe 
that, as the VA, we need to take that responsibility, that when 
a veteran goes out to the private sector, we still have to own 
the responsibility for that health care--and the integrator 
tends to be the primary care doctor--and that if we do not do 
that, that it results in not very good care and also 
dysfunctional care because it is not integrated.
    It also results in higher-cost care because those doctors 
that they may go to, first of all, may not be qualified by us 
as being capable--being high-quality enough to be in that 
network, and, second, may not follow the standards of cost that 
are necessary to be part of that network.
    Senator Blumenthal. Do you want to comment?
    Dr. Shulkin. Well, I think the Secretary has said it very 
correctly, Senator, which is we really have differences here 
with the Commission on Care report on two counts.
    One is the quality of care, we believe, is going to be 
better with VA maintaining the care coordination and the 
integration role. We believe that we understand the needs of 
veterans best. And, we do support and we embrace working with 
the private sector. That is absolutely correct. But, we believe 
the VA needs to be the care coordinator.
    On the cost side, this would be, in my view, irresponsible 
just to turn people out with no deductibles, no cost-control 
mechanisms. This would be returning us to the late '80s, early 
'90s, where there were just runaway costs. So, we think the 
very best thing for veterans and the very best thing for the 
taxpayers is to do this carefully in an integrated network, the 
way that we proposed in October 2015.
    Senator Blumenthal. Speaking of costs, the Commission on 
Care report found that 98 percent of all clinical supplies were 
acquired using purchase cards, and that 75 percent of what the 
VHA spends on clinical supplies is made through this purchase 
mechanism. Only 38 percent of supply orders were made through 
standing vendor contracts, which presumably would be more 
effective and efficient. I have been told as well that this 
same issue may arise with respect to medical devices and 
perhaps other kinds of supplies.
    That is in stark contrast, as you probably know, to the 
private sector benchmark of 80 to 90 percent of supply 
purchases from already existing master contracts with 
negotiated price discounts, which the VA can do, unlike 
Medicare--and we are pushing for Medicare to have the same 
options of negotiation. What is preventing the VHA from using 
those kinds of master contracts?
    Secretary McDonald. Nothing. In fact, if you recall the 
hearing we had on the 12 breakthrough priorities, which you all 
kindly had here in the Senate--we did not get the same hearing 
in the House--one of those 12 breakthrough priorities is to set 
up a consolidated supply chain. Right now, every one of our 
medical centers has its own supply chain, which, as you have 
suggested, is nonsensical.
    What we can do--what we have seen from our consolidated 
mail-order pharmacy, where we do have a consolidated supply 
chain, is our cost advantage is tremendous because of the scale 
that we have. Also, our customer service is fantastic. We have 
been rated number 1 pharmacy in the country for six consecutive 
years by J.D. Power because of that scale advantage.
    What we are in the process of doing is building a 
consolidated supply chain for all of our medical centers. So 
far, we have avoided about $35 million of cost. Our commitment 
to you was to avoid $75 million of cost by December. I think we 
will beat that.
    Senator Blumenthal. Thank you.
    Thanks, Mr. Chairman.
    Chairman Isakson. As a courtesy to everybody in the 
audience and the Members of the Committee, we are going to take 
a little bit of a different order in terms of questions and 
testimony, because--to pay Senator Brown back for doing me a 
great courtesy by being here on time, given he has got a tough 
schedule, I am going to let him do the next question, followed 
by Senator Boozman, followed by Senator Manchin. Then, we will 
take everybody else as they arrive when they come, which will 
keep the hearing moving as fast as we can.

           HON. SHERROD BROWN, U.S. SENATOR FROM OHIO

    Senator Brown. Thank you, Mr. Chairman.
    Chairman Isakson. Senator Boozman is being gracious to let 
me do that.
    Senator Brown. Thank you, Senator Boozman, and for the work 
that we have done together on all kinds of issues. Thank you. I 
will ask two brief questions.
    Secretary McDonald, first to you, you correctly note in 
your testimony that implementation of Veterans Choice went 
through some initial growing pains, as we all expected. Your 
meetings with veterans and providers and health experts and 
others, lay out briefly the challenges and opportunities that 
you see for Veterans Choice, where we are going.
    Secretary McDonald. Well, Veterans Choice, as you know, we 
have made tremendous progress. When you recognize we set up a 
program in 90 days that affected roughly--and sent out cards to 
9 million veterans, we have made tremendous progress. We have 
also made changes along the way. Since the original bill, we 
have now changed the way we define distance, the 40-mile limit. 
We have changed it from geodesic distance to driving distance. 
That virtually doubled the number of veterans of being able to 
avail of Veterans Choice.
    We also have made efforts--originally the program was 
designed where we would simply give a phone number to a veteran 
and say, go call your third-party administrator. My belief, and 
I know David's, is you cannot outsource your customer service. 
So, we are pulling that responsibility back in, the 
integration-coordination responsibility, and we are now taking 
responsibility for customer service. We have taken third-party 
administrator employees and put them into our buildings as a 
test in order to make that easier for the veteran.
    Where are we headed? About 22 percent of our appointments 
every day now are in the community. There are about a million 
veterans that rely on the Choice program. There are about 5,000 
veterans that only use the Choice program, which is really a 
strikingly low number, but it demonstrates that most veterans 
really want the hybrid. Even if they have the Choice program, 
they want the hybrid of----
    Senator Brown. They really want to know they have the 
choice. They are generally mostly satisfied with Cincinnati VA 
or Dayton VA or Cleveland, but they want to know they have that 
choice, which I think is so important.
    Secretary McDonald. Thank you.
    Senator Brown. Dr. Shulkin, quickly, are there bureaucratic 
or legislative hurdles that impede VHA from routinely updating 
individual facilities' IT infrastructure that is providing VA 
medical staff and veterans the best care possible? Talk that 
through with us, if you would, for a moment.
    Dr. Shulkin. I do think that if you ask most of our field 
hospital directors, they would say that there are challenges. I 
also think we have seen a really strong direction toward being 
more responsive to the hospital leaders. Under LaVerne 
Council's leadership, she has established account executives 
who now work with VHA, and we are working together to break 
down some of those barriers.
    Just as the Secretary said, and as Nancy said in her 
hearing last week, this does take time because we are breaking 
down years and years of barriers, but I think we are headed in 
the right direction.
    Senator Brown. Thank you.
    Thank you, Mr. Chairman.
    Chairman Isakson. Thank you, Senator Brown.
    Senator Boozman.

         HON. JOHN BOOZMAN, U.S. SENATOR FROM ARKANSAS

    Senator Boozman. Thank you, Mr. Chairman, and thank you all 
for being here. We really do appreciate your hard work.
    The Choice program has over a million people participating 
in it, which I think is a good thing.
    Secretary McDonald. We do, too.
    Senator Boozman. You do not list that as a legislative 
priority as far as reauthorization. Is it a priority or is it 
not a priority, or am I--have I misunderstood?
    Secretary McDonald. We look at reauthorization as part of 
our program to consolidate care. We believe we did request 
reauthorization in that October 2015 package that we submitted 
on the consolidation of care.
    Senator Boozman. Good. Well, that is good.
    Secretary McDonald. So, we do want reauthorization.
    Dr. Shulkin. I would just add--I am sure this is why you 
are asking, Senator--the program ends August 7, 2017. Without 
reauthorization, we are going to see us actually go backwards 
because we have now reached 5 million Choice appointments. That 
is fantastic and this program should be congratulated.
    Senator Boozman. Right.
    Dr. Shulkin. We are just getting it to work. If we could 
get Veterans First passed through, it is even going to work a 
lot better. So, reauthorization is absolutely a priority for 
us.
    Secretary McDonald. Sorry to take more time on this.
    Senator Boozman. No, no, go ahead.
    Secretary McDonald. Sorry, if you do not mind, but----
    Senator Boozman. It is important.
    Secretary McDonald. August 7 is an important date, but if a 
woman is pregnant, you know, we really need to know 9 months in 
advance----
    Senator Boozman. Right.
    Secretary McDonald [continuing]. Of August 7 whether or 
not--how we are going to care for her. The sooner the better.
    Senator Boozman. Right. I guess that was my follow up. It 
is good to know that you have cleared that up and that it is 
important. You all truly have done a great job; it has been a 
momentous task.
    Do you have any contingency plans, you know, in regard to 
August 2017, if the reauthorization--and then also, I think you 
can really help us at this hearing and in future hearings by 
helping members understand--not on this Committee but 
throughout Congress--how important it is to get the 
reauthorization done.
    Secretary McDonald. Yeah. We are in the midst right now of 
renewing our strategies for 2017. Most of our leaders are at 
the National Training Center right now. One of the things we 
have brought up is the importance of communicating that August 
7 date, but also the 9 months in advance of that. I do think 
that is critically important.
    Dr. Shulkin. Just to quantify this, we spend about $13 
billion a year in the community. As the Secretary said, 22 
percent of our care goes out in the community; $4 billion of 
that is the Choice program. We would have to reduce access to 
care by about one-third in the community, and that would hurt 
veterans.
    Our contingency plan--we are here to help veterans with the 
resources that you provide us. We are going to continue that 
mission, and we will do the very best job possible, but there 
is no substitute for what you have provided in the Choice 
program.
    Senator Boozman. Good.
    Thank you, Mr. Chairman. I do think that is something we 
really need to work on, to make it clear how important that 
reauthorization is going to be.
    Chairman Isakson. That was a terrific question and I 
appreciate the answer. It gives us our homework to do before 
that August date next year.
    We are going to stand in recess for a moment. Senator Moran 
is on his way and will continue the hearing. Senator Boozman 
and I will be back as quick as we can go cast our two votes. We 
will stand in recess until Senator Moran gets here.
    Thank you, Mr. Secretary. [Recess.]

                STATEMENT OF HON. JERRY MORAN, 
                    U.S. SENATOR FROM KANSAS

    Senator Moran [presiding]. The Committee will come back to 
order. I appreciate the courtesy extended to me by the Chairman 
to be here in between votes.
    Mr. Secretary, it is a pleasure that you are here with us 
as well.
    I have a specific set of circumstances that I have 
addressed to you in a letter and want to follow up in this 
setting today. I have no doubt but what you and other officials 
at the VA are sympathetic and concerned and want to resolve the 
circumstances we find ourselves in with a particular employee 
at a particular VA hospital in our State.
    We have the circumstance--just to set the background for my 
questions, we face one of the worst examples, in my view, of 
lack of accountability at the VA with the case of a physician 
assistant who abused Kansas veterans at the Leavenworth VA 
hospital and potentially other veterans at other facilities 
within our State.
    He has been criminally charged with multiple counts of 
sexual assault and abuse on numerous veterans who sought his 
care and his counsel. He had a criminal record, admitted on his 
application for State licensure when he was hired. The VA hired 
him anyway. Clearly, he should never have been hired and should 
have never been retained as an employee of the VA.
    He is a physician assistant. An explanation that I received 
is that physician assistants are not considered significant 
risks, or they are a lower risk than other health care 
professionals at the VA, and so the vetting that should take 
place did not. What he did in his capacity as a physician 
assistant is to target veterans who were suffering from post-
traumatic stress syndrome, and he used his position at the VA 
to add to the wounds of war of those who served our country 
instead of healing them. There are a number of witnesses. Many 
of them wish to remain anonymous. Criminal, as I said, 
proceedings have been filed.
    Just to give you a flavor, we had--there are two Army 
veteran brothers who were patients of this individual who felt 
they had no choice but to go back to this physician assistant 
for their care and treatment. The quote was, ``The fear of 
losing what I earned versus the fear of being sexually 
assaulted again, I do not know which one was more important.'' 
What an amazing statement for a veteran to reach a conclusion: 
I do not know whether to go back because I might not get the 
care I need if I do not.
    A victim who asked to remain anonymous in an interview in 
July 2014, when these charges were filed, said,``It certainly 
violates veterans' trust. We are dealing with a number of 
issues, and to have to come back to the agency tasked with 
caring for our Nation's veterans is now adding further wounds 
to the Nation's veterans.''
    Mr. Secretary, I want to focus in on two aspects of this. 
Again, I know that your staff has reached out to mine, I assume 
in response to a letter that I wrote you a few days ago, a few 
weeks ago. This goes to accountability, something that you and 
I have had conversations about for a very long time. I want to 
go to how does somebody get hired with this background? Perhaps 
even more important, it is troublesome to me that this 
individual was never fired. After the Inspector General's 
report, he voluntarily left the VA.
    One of the conversations that we have had for a long time 
is about the ability to fire people at the VA. Of all the 
circumstances I can think of, I cannot figure out why this 
would not be one in which a person was fired, as compared to 
voluntarily retiring, which I assume, among other things, I 
mean, has a different connotation, a different aura to being 
fired versus retiring, but I assume it also has different 
consequences in regard to benefits and this individual's 
future.
    If we could--you had VA officials, leadership here in front 
of our Committee last week. I got what you would expect for me 
to hear from them. I am not discounting what they said, but 
they want a zero tolerance. The VA is committed to a zero 
tolerance of assault--sexual assault on veterans, staff, or 
others at the VA. I know that is the case. We want a zero 
tolerance. But, we have specific instances here in which the 
hiring process was faulty and the discharge process really did 
not take place.
    Mr. Secretary?
    Secretary McDonald. Senator, first of all, any accusation 
of sexual assault, sexual molestation is unacceptable.
    As soon as I heard about this, I went to Leavenworth. I was 
there. I dug through the data. I have different data than you 
have, so we need to get together and compare our data, because 
what I understand from my visit and the documents I reviewed is 
when this individual--when there was an accusation of this 
individual's potential of having done this, we immediately 
removed him from caring for patients. We immediately started 
the procedure to do an investigation and to fire him. He 
resigned.
    Then, we went back and we looked at our hiring process. 
What I was told at the time--and, again, you have got different 
data, so I have got to find out why I did not see the data you 
may have or where you got your data--there was nothing in his 
file that suggested that this was a risk, that this occurred.
    Obviously, you have got different data than I have, because 
this is not something we would tolerate. Obviously, if this 
showed up in a person's hiring process, we would not hire them.
    Maybe David--do you have different data than I have?
    Dr. Shulkin. No, I think I have the same information you 
have, Mr. Secretary.
    Senator Moran. Secretary McDonald and Dr. Shulkin, you 
know, our information comes from the Inspector General--the VA 
Inspector General, and a significant number of press accounts, 
I suppose, as well.
    A criminal proceeding is now pending in the District Court 
of Leavenworth County, KS. But, I have seen the application for 
his licensure in the State of Kansas and he voluntarily 
indicated on the form that he has a criminal history, which 
unfortunately the licensure folks did not pick up on either, 
but that--I assume that was reviewed when this individual, Mr. 
Wisner, was hired by the VA.
    In addition to that, would you tell--are you telling me 
that when someone resigns you lose your ability to fire them? 
Are you telling me that he beat you to the punch?
    Secretary McDonald. If somebody resigns, they are no longer 
an employee. That is true in the private sector or the public 
sector. If someone resigns, they have resigned. Now, obviously 
you have judicial options, which is what is occurring right now 
with this individual.
    Senator Moran. Well, I think, without--I have no doubt that 
the facts as I described them are accurate. We would continue 
to ask you to use this as a learning experience, not only to 
help prosecute, but so that we send a message to veterans about 
how careful we are; yet again, it, in my view, goes back to 
hiring practices and discharge procedure.
    Again, I would ask you to respond to my letter in writing 
so that we can see your response, and then we can have a 
conversation again.
    Secretary McDonald. We will certainly respond to your 
letter in writing. Obviously, we are a learning organization. 
We do want to learn from mistakes. We want to learn from what 
is going right. You had the Best Practices Diffusion hearing 
last week. We will get back to you.
    Again, I want to be careful not to use media reports as 
proof of accusation. Let us let the judicial process play out. 
We will share with you what we know and we would appreciate 
seeing the documents that you have.
    Senator Moran. My information--I met with Inspector General 
Missal. We have had conversations, extensive, about this topic. 
I can assure you that what I am reporting is not anything but 
what I was told in that setting.
    Secretary McDonald. I have not met with Mike on this, so I 
will----
    Senator Moran. I would ask you if you would ask the VA 
professionals, the leadership in Kansas, both Leavenworth and 
the VISN--would you instruct them to have a dialog with me and 
fully lay out the scenario as they see it to me?
    Secretary McDonald. Absolutely. I mean, that is their 
responsibility. We ask each one of our medical center directors 
to work with their Members of Congress.
    Senator Moran. I thank you, Mr. Secretary.
    Secretary McDonald. Thank you, sir.
    Senator Moran. The senator from Montana.

           HON. JON TESTER, U.S. SENATOR FROM MONTANA

    Senator Tester. Thank you, Mr. Chairman. I want to thank 
both the Secretary and Under Secretary for being here today.
    This Committee has placed a priority on VA accountability, 
as I know you have. When we hear stories like Senator Moran 
just put forth, I know the hair on the back of my neck raises, 
as it does on yours. Once we get to the facts, I think it is 
important that the driftwood goes, quite frankly. That is 
probably complimentary to that person.
    It is really important to acknowledge, though, that there 
are millions of veterans in this country who rely on the VA and 
Congress needs to be held accountable too. You submit budgets, 
you submit legislative priorities that allow you to do your 
job: serve the veterans. It is our responsibilities as Members 
of this Committee and the members of the U.S. Senate--and the 
same thing on the House side--to carefully consider those 
requests and to deal with them as an elected representative, is 
to do what is best for the veterans of this country.
    When that does not happen, it impairs your work and, quite 
frankly, it hurts the folks who are sitting here in the 
audience who are veterans. Before you know it, the entire VA 
system is called into question.
    Mr. Secretary, you are the front of the attack, when, in 
fact, we share more than our share of the responsibility. Do 
you believe that accountability is a two-way street?
    Secretary McDonald. I certainly do. I provided, today, one 
of the most hard-hitting, I think, opening statements I could, 
saying that we are in the process of transforming the VA. We 
are seeing effective results. But if we are to continue this, 
we simply have to get a budget and we have to get the 
legislation that we have been asking for, for, you know, years.
    Senator Tester. Yeah. We passed the Veterans First Act out 
of the Committee unanimously 125 days ago. We have yet to deal 
with it on the floor. It sounds to me like we are going to be 
leaving town next week, which is crazy--I will just tell you, 
crazy--that this is something we can get to the floor within 2 
days. I would bet we get a unanimous vote out of the U.S. 
Senate on this bill. But, we are where we are.
    I talk to veterans all the time. I know you talk to even 
more of them. Some of them love the VA, some of them not so 
much. Would you agree that we have some work to do to get the 
faith and trust back of many of our veterans out there?
    Secretary McDonald. We do. In fact, we measure it. In fact, 
I just got the measure this morning. One of the things we 
measure--and this is very common in hospitals or people who 
provide customer service, or veteran services--we measure the 
effectiveness of the experience, the ease of getting the 
experience, and the emotion of having it.
    I have a chart here that shows that we have made progress. 
Obviously these are lower numbers than we would like, but we 
have gone from 47 percent trust in December 2015 to 59 percent 
in the April-through-June quarter. We are measuring this every 
quarter. I am not happy. Nobody is happy with 59 percent.
    Senator Tester. Right.
    Secretary McDonald. But that shows that at least we are 
making some progress. We have a lot more to make.
    Senator Tester. In terms of greatest concerns identified by 
the Commission, things like leadership vacancies, staff 
shortages, a culture of risk aversion, really what are some of 
the ways that the VA can improve those issue areas?
    Secretary McDonald. Of our five transformation strategies, 
the second strategy of improving the employee experience--
training employees, giving them the tools they need--right now 
we have our top leaders offsite in our national training 
facility, where we are training them. We are training them in 
tools like human-centered design. We are training them in 
leadership. We are moving to one consolidated leadership model 
across the enterprise, which is what great organizations do. We 
are training them in Lean Six Sigma. We are providing them the 
training they need.
    Then we give them training packets that they take back to 
their locations and they train their subordinates, and we 
cascade that training through the organization. That is how you 
change a culture, and that is what we are in the midst of right 
now.
    Senator Tester. OK. As you well know, we have talked about 
staff shortages, we have talked about leadership vacancies. In 
fact, right now Montana has a temporary director--we do not 
call her temporary, we call her something else, acting--that is 
it, acting--VA Montana director, who, by the way, I like very 
much. I think she is doing a marvelous job.
    When I had a conversation with her--oh, it has been 2 or 3 
weeks ago, and she holds people accountable very well--one of 
the things she talked about was that if we are going to get 
good people into the VA, due process has to be upheld. This is 
a management person that understands that if people look at the 
VA and say, I have got no due process rights, somebody can make 
any accusation at me they want and I can be gone without any 
argument--that does not help us fill not only leadership 
positions but also staffing positions, whether it is a nurse, a 
doc, administrative personnel, appeals person, whatever it is.
    Could you talk a little bit about--when we talk about 
accountability--because I am telling you--you come from the 
private sector. You understand that if you have got deadwood on 
your staff, it costs you twice as much money as you are paying 
for them. Can you talk about how we hit that sweet spot so that 
people who want to work for the VA, because it is a pretty good 
outfit----
    Secretary McDonald. Right.
    Senator Tester [continuing]. Yet understand that if 
something--if they make a call--if they go against that culture 
of risk aversion and make a call, somebody has got their back.
    Secretary McDonald. We are training the organization in 
what we call values-based leadership rather than rule-based 
leadership, and we are trying to inspire them. I think we are 
being somewhat successful, given the quality of the people we 
are getting on board.
    I have changed 14 of my 17 leaders. So, in 2 years, 14 of 
17 of the top leaders have changed, and I think we have brought 
in better-quality people. But, part of this--and I have done a 
lot of the recruiting myself as you know. You and I went to the 
University of Montana recruiting, and I have been to over two 
dozen medical schools recruiting, but our applications are down 
about 78 percent versus what they were before.
    So, the kind of environment and context you are talking 
about does have a real impact on the quality of the people we 
get. But--go ahead.
    Senator Tester. Well, I mean, I think that is important to 
note because, like I said, the issue that Senator Moran brought 
up is totally unacceptable. I mean, if that is the way it is, 
it is totally unacceptable.
    On the same token, I do know from past life experiences 
that when you have got somebody out there that is trying to 
make the right call and somebody can accuse them of something 
and they do not have any rights, it just goes counter to the 
whole accountability issue.
    Secretary McDonald. In my opening statement, Senator 
Tester, I mentioned that we have terminated 3,755 people in the 
last 2 years. I also said 14 of my 17 direct reports are new.
    In my opinion, the only issues we had around accountability 
have been the accountability of getting the legislation that we 
need, which you mentioned, but also the interactions we have 
had with the Merit Systems Protection Board, which, frankly, we 
have all agreed that Veterans First would fix.
    So, the answer here--I think we already have the answer in 
front of us. It is, how do we get Veterans First on the floor 
and passed, because we have all agreed that that is a potential 
solution.
    Senator Tester. Thank you, Mr. Secretary.
    Mr. Chairman, I appreciate your leadership on this 
Committee a lot, which you know. I have told you that, and I 
have told you that publicly. You are a class guy. But, damn, we 
have got to get the Veterans First Act passed. We just do.
    Chairman Isakson [presiding]. Since we are talking about 
that subject--and I want to go back to Senator Moran for a 
follow up in just a second, but let me just comment on that.
    For everybody's knowledge and edification in the room, this 
Committee did outstanding work for over a year-and-a-half on a 
Veterans First bill that is comprehensive in its nature and, I 
think, complete in its nature.
    Two questions have been asked today. One is about what 
happens with Choice after August of next year. The other 
question is how you deal with the Merit Systems Protection 
Board and accountability in the VA. There are those people in 
the news media, and some in my party and other places, that 
have criticized our bill for not being strong enough on the 
Merit Systems Protection Board and not making Choice permanent.
    First of all, we deal with the leadership of the VA in 
terms of the ability to hire and fire and take them out from 
under the Merit Systems Protection Board, which is the right 
thing to do, number 1. Number 2 is the accountability. Because 
you have that accountability, it will flow from the bottom up 
because the top is being held accountable. We have been able to 
get the buy-in necessary to do that.
    All of us want to make sure that Choice endures and Choice 
becomes permanent; none of us want it to run out of funds and 
go out of business next August, but not passing the Veterans 
First bill today, which provides for provider agreements in the 
States with the VA, would be a serious mistake.
    People are saying they do not want to do that--some people 
are saying they do not want to do that because they want to go 
ahead and get Choice fixed first. When they come up with the 
$51.4 billion we need to fix Choice first, I am happy to do it. 
In the meantime, let's expand the opportunity to make the 
contract agreements on provider agreements, and let's work at 
the beginning of next year to fix the Choice program so it does 
not sunset in August but instead is perpetuated around the 
country, improved and perfected.
    I apologize for horning in on that. When I heard my two 
favorite subjects come up, I just had to make a comment.
    Senator Moran.
    Senator Moran. Mr. Chairman, thank you. Thank you for your 
kindness and consideration of me today and always, and please 
consider me an ally in your efforts on Veterans Choice first, 
and particularly the legislation that we would like to see 
passed.
    Mr. Secretary, I am going to run to vote. This is not a--I 
will not leave this as an open-ended question. I am not trying 
to get you, but as I thought further about your response to my 
comments and question, one of the things that I think is true, 
which you could look into, is you indicated that Mr. Wisner 
was--as soon as we found out--as soon as the VA found out about 
him, he was taken away from patient care.
    Secretary McDonald. Yes.
    Senator Moran. As I understand the facts, he continued to 
be an employee after that. He was removed from patient care but 
he continued to work at the VA. The day that he was removed 
from patient care is the same day that he admitted the 
allegations, admitted he had a problem, admitted that he dealt 
with patients in the way that he did. My point would be, that 
is a moment in which somebody could be discharged, fired, and 
yet the VA just removed him from patient care and kept him on 
the payroll. To me, that again highlights this difficulty in 
getting rid of, in this case, not just bad actors but terrible 
actors.
    Secretary McDonald. Well, it sounds to me, Senator Moran, 
like you have better information than I do, and that you have 
met with the Inspector General and he has not yet met with me 
on this issue. I need to find out what he discovered in his 
investigation. Obviously, if you have the case, you fire them. 
That is why we fired 3,755 people. You do not tolerate that 
kind of behavior.
    Senator Moran. Thank you.
    Chairman Isakson. Thank you, Senator Moran.
    I thank the Members of the Committee for being so 
cooperative to move the hearing forward. I think we will go to 
our second panel.
    Before you leave, Secretary McDonald, I want to thank you 
and Dr. Shulkin not just for your input today but for your 
leadership over the last 2 years. I think amazing progress has 
been made. We have a lot of progress yet to obtain, but I 
appreciate the leadership by both of you very much. We are here 
and stand ready to help you anytime we can.
    Secretary McDonald. Thank you, Mr. Chairman.
 Response to Posthearing Questions Submitted by Hon. Johnny Isakson to 
  Hon. Robert McDonald, Secretary, U.S. Department of Veterans Affairs
    In your testimony, you mentioned that ``VA is badly in need of 
statutory structural changes'' to the appeals process. In prior 
communications to the Committee, VA provided this information 
concerning how long after enactment a new appeals system should take 
effect: ``The new system should take effect 18 months after enactment. 
An 18-month delayed effective date would provide VA with the time 
needed to draft new regulations addressing the new system, update forms 
and guidance documents, and train staff.''

    Question 1.  Please outline what impact it would have on VA's 
ability to successfully implement a new appeals system, to process 
existing pending appeals, and to process new incoming appeals if 
comprehensive changes to the appeals system were to take effect on the 
date of enactment. Please include an explanation of how VA would 
address appeals received after enactment but before VA has had time to 
draft regulations, update forms, update guidance documents, and train 
staff.
    Response. VA has worked extensively with stakeholders to design a 
comprehensive new process for early resolution of Veterans' 
disagreement with VA decisions on their benefit claims. The proposed 
re-design would impact VA's claim and appeal processing activities and 
stops the flow of Veterans' appeals into an inefficient system that has 
been in place throughout much of VA's long history. Moreover, with more 
than 460,000 appeals in its current inventory, the change in law will 
require VA to temporarily administer two appeal systems for several 
years. Recognizing the scope and complexity of this task, and the 
significant impact that it will have on a large number of Veterans with 
appeals, VA and its stakeholders have consistently stressed the 
importance of having an 18-month delayed effective date for purposes of 
implementing the law without undue risk to the Veterans it is intended 
to serve. Although the proposed legislation was drafted to address as 
many of VA's and stakeholders' design features as possible, proper 
implementation will nonetheless require rulemaking to fill gaps. This 
is particularly important in the context of implementing a new appeal 
process that current and future Veterans will use to protect their due 
process and other rights. In addition to promulgating regulations 
during the 18-month period following enactment, VA must update its 
forms and decision notice letters, develop and issue guidance 
documents, update information technology systems, implement an outreach 
and communications plan, and hire and train staff. Veterans Service 
Organizations and other representatives must have time to adapt their 
operations to these significant changes.
    It is imperative that Congress allow VA the time it needs to 
properly implement the change in law. While VA would attempt to come 
into compliance with the legislation as quickly as possible if Congress 
instead made the changes effective on the date of enactment, VA would 
be faced with the untenable position of doing the work required to 
implement the law at the same time that is receiving new appeals under 
the law. Without the opportunity for preparation, the resources that VA 
would have to expend to come into rapid compliance with the new 
legislation would have to be shifted from other necessary tasks, which 
could negatively affect VA's ability to provide services to Veterans. 
Additionally, if the new framework were to take effect on the date of 
enactment, it is possible that cases in which the Agency of Original 
Jurisdiction decision is issued on or after the date of enactment may 
have to be stayed until basic forms can be drafted and updated and 
basic processes can be put in place. Also, if there is not adequate 
time to draft and publish regulations, VA would be forced to implement 
the new framework based on the statutory language and purpose. There 
are also significant litigation risks associated with processing 
appeals in an environment in which there would be questions regarding 
whether and how some existing regulations apply. These numerous and 
significant disadvantages to the new framework being effective on the 
date of enactment, as opposed to 18 months after enactment, would be 
complicated by VA's continuing obligation to process its legacy appeals 
inventory. VA does not have unused resources that it can re-allocate to 
such an effort, and the result would likely be several years of poor 
service to Veterans in both the legacy and new appeals framework.
    The language quoted in Chairman Isakson's question is from VA's 
response to a question for the record in April 2016. VA provided the 
Committee with draft legislative language reflecting the 18-month 
delayed effective date in May and June 2016. The delayed effective date 
provision is included in S. 3328, which states that the amendments made 
by that legislation shall apply to all claims for which notice of a 
decision under 38 U.S.C. Sec. 5104 is provided on or after a date that 
is 540 days after the date of enactment.
                                 ______
                                 
  Response to Posthearing Questions Submitted by Hon. John Boozman to 
  Hon. Robert McDonald, Secretary, U.S. Department of Veterans Affairs

    Question 2.  I remain concerned that the VA seems committed to 
pursuing proprietary software solutions and massive IT overhauls that 
seem cost prohibitive and will be under development for many, many 
years. Is the VA considering any commercial off the shelf solutions, to 
include cloud-based solutions--to bridge the gap until comprehensive 
software can come on line? Can you provide an update on the status of 
your self-scheduling app and whether you will compare its effectiveness 
with proven, commercial solutions?
    Response. VA's self-scheduling app, named the Veteran Appointment 
Request app (VAR app), has completed initial development and is 
currently in field-testing. National deployment is targeted for the end 
of 2016. VA has conducted an in-depth evaluation of this app with 
Veterans. The majority of Veterans that were interviewed about this app 
reported that they were satisfied or very satisfied with the app; and 
100 percent reported that they would recommend the app to other 
Veterans. VA will continue to monitor user feedback on the app as it is 
deployed nationally.
    At the time development of VAR commenced, there was no available 
commercial off the shelf (COTS) direct consumer scheduling solution 
that integrated with Veterans Information Systems and Technology 
Architecture (VistA), VA's current scheduling package. Accordingly, 
VA's choice to build our own self-scheduling app was the best option at 
that time. In the future, should VA replace VistA as its core 
enterprise scheduling application with a COTS product, VA would, at 
that time, re-evaluate the requirement to retain the VAR app as our 
self-scheduling solution. VA is implementing an Enterprise Cloud 
Brokerage concept to improve interoperability, modernize VA's network, 
improve security, and enable a more flexible and scalable 
infrastructure to accommodate future demand.

    Question 3.  The Commission's report called the VHA's supply chain 
for clinical supplies, medical devices and related services 
``inadequate.'' The report also contrasted it with the success of the 
VHA Pharmacy Benefits Management Service (PBM), which has taken a 
systems approach to managing pharmaceutical supplies, logistics, and 
prescribing. It is my understanding that PBM's success is due in large 
part to a well-planned and thorough process that includes all affected 
departments, including the end point of care. Is the VHA looking at 
lessons learned from the PBM to improve supply chain management in 
other areas? Is consideration being given to establishing a systems 
driven, clinically led process for the management of clinical supplies 
and medical devices (to include surgical instruments)?
    Response. The Veterans Health Administration (VHA) Pharmacy 
Benefits Management (PBM) Program has been successful due to a well 
planned and executed strategy that involves clinical input at all 
levels, and has evolved over the past 15 years. The VHA Procurement & 
Logistics Office (P&LO) is modeling much of its strategy after the PBM 
program to ensure that clinical input drives the determination of 
requirements, and management of the supply chain. There are several 
programs employing this strategy, including the P&LOs Healthcare 
Commodity Program, Equipment Lifecycle Management Program, and the VHA 
Healthcare Supply Chain Systems Program. The Procurement & Logistics 
Office focus is squarely on support for the clinician caring for the 
Veteran patient.
                                 ______
                                 
 Response to Posthearing Questions Submitted by Hon. Sherrod Brown to 
  Hon. Robert McDonald, Secretary, U.S. Department of Veterans Affairs
    Secretary McDonald, in Commissioner Schlichting's testimony she 
discussed that the VA faces ongoing ``leadership crisis, confusion 
about strategic direction, significant variation in performance across 
the VA health system, and a culture of risk aversion and distrust.'' 
You, and Dr. Shulkin have worked hard to restore veteran's trust in the 
VA through the MyVA and Diffusion of Excellent initiatives. How do you 
ensure that these initiatives continue in a new Administration?

    Question 4.  This seems to be a critical time for the VA, do you 
have processes in place to ensure that the progress achieved thus far 
will be sustained?
    Response. VA designed the Diffusion of Excellence Initiative to 
drive long-term, systematic and cultural changes across VHA that will 
be responsive to specific changes in Administration or political 
leadership. In fact, the initiative is designed to conform to the 
priorities of leadership as they change, promoting and driving 
consistency in best practices along existing or new priorities. VA has 
also made system-level changes in incentives that will ensure 
continuous work in this area as the Administration changes. To enable 
this continuity, VA and VHA senior leaders have put a number of 
mechanisms in place.
    As part of the Diffusion of Excellence Initiative, the Office of 
the Under Secretary for Health spearheaded changes to the Senior 
Executive Service (SES) performance framework to incentivize senior 
leaders at medical centers and regional field networks to identify and 
replicate best practices locally and regionally. These incentives have 
resulted in numerous local competitions to identify and spread best 
practices within different VHA regions. The Under Secretary for Health 
is also sponsoring a national competition to solicit innovative best 
practices that improve Veterans' access to, quality of, or experience 
of health care. The clinicians and staff serving Veterans on the front 
lines who developed these practices receive support to spread the 
process improvements to medical centers who need similar solutions. 
This framework drives leaders to proactively identify best practices at 
their facilities and promote their replication in other locations. VHA 
rewards leaders for their ongoing participation in the Initiative. This 
is just one way the Diffusion of Excellence Initiative is 
institutionalizing the process throughout the enterprise--and doing so 
in a way that the will incentivize local leadership to support front-
line innovations and best practices. We fully expect these incentives 
to carry forward into a new Administration.
    The Diffusion of Excellence Initiative has also convened a council 
of senior leaders (both political and career civil service leaders), 
program office staff, and front line leaders and innovators across VHA 
to advise on the selection and dissemination of best practices. This 
engagement of multi-disciplinary and multi-level leaders and staff is 
one way that the Initiative is enabling `change champions' who will 
preserve institutional knowledge, drive culture change, and sustain 
results despite Administration transitions. The Diffusion Council is 
highly adaptable, embracing and engaging new leaders and staff as they 
emerge, and ensuring continual participation from new and relevant 
stakeholders. The Diffusion of Excellence Initiative is demonstrating 
this by soliciting a new round of best practices meant to support 
fiscal year (FY) 2017 MyVA Breakthrough Priorities. This solicitation 
will be released shortly.
    The Initiative has also fostered a number of strategic 
relationships both within and outside VA that provide support and allow 
the Diffusion of Excellence Initiative to leverage the scale and 
expertise of existing entities. These relationships will help sustain 
the Initiative and provide continuity through Administration changes. 
External strategic relationships forged through the Initiative include 
the American College of Physicians, private sector leaders who form the 
Special Medical Advisory Group Best Practices Identification Working 
Group, and several Veterans Service Organizations.
    By design, the Initiative includes partnerships across VHA and VA. 
These partners include:

     Office of Rural Health;
     Office of Strategic Integration;
     Department of Veterans Affairs Center for Innovation;
     Office of Patient Centered Care and Cultural 
Transformation;
     Primary Care Operations;
     Quality Enhancement Research Initiative;
     VHA Systems Redesign;
     Veterans Engineering Resource Center;
     MyVA;
     VA Veterans' Experience Office; and
     Employee Education System and the National Simulation 
Center.

    Finally, the Initiative will be co-run by the Office of the 
Principal Deputy Under Secretary for Health and the Office of 
Organizational Excellence. The Initiative is one of the MyVA FY 2017 
Initiatives which overlap with the beginning of the new Administration.
    The MyVA FY 2017 Initiatives build on VA's successes and lessons 
learned in FY 2016, and are designed to accelerate the Department's 
transformation. The Initiatives are aligned around the five MyVA 
Strategies:

     Improving the Veterans Experience;
     Improving the Employee Experience;
     Improving Internal Support Services;
     Establishing a culture of Continuous Performance 
Improvement; and
     Enhancing Strategic Partnerships.

    These strategies were shaped by the advice of the President, 
Members of Congress, thousands of Veterans, the MyVA Advisory 
Committee, leaders of our Veterans Service Organizations, our 
employees, and many other stakeholders. They have been supportive and 
will continue to be supportive of transformational change that improves 
the Veteran experience.
    Improving the Veteran experience means making every contact between 
Veterans and VA predictable, consistent, and easy. That kind of 
customer service experience begins with respectfully receiving our 
Veteran-clients; but it is also based on science. VA has been heavily 
focused on human-centered design, process mapping, and working with 
world-class design firms and companies to help make every interaction 
with Veterans better.
    Improving the employee experience is focused on empowering VA 
employees to serve Veterans, and each other, well. Better service for 
Veterans is inextricably linked to improving our employees' work 
environment. The best private-sector customer-service organizations are 
also among the best places to work and VA has studied their practices 
to tailor them to our environment.
    Improving internal support services means leveraging VA's scope and 
scale to provide cost-effective and higher quality service to employees 
and leaders. VA is bringing its Information Technology (IT) 
infrastructure and financial systems into the 21st century. Our 
scheduling system dates to 1985. Our Financial Management System is 
written in Common Business Oriented Language (COBOL), a dead computer 
language dating back to the late 1950s. This has impeded VA's efforts 
to serve Veterans. VA is improving its Human Resource Management 
processes and systems as well.
    Establishing a culture of continuous improvement means applying 
lean strategies and other performance improvement capabilities to help 
employees improve processes and build VA into a learning organization 
marked by a culture of continuous improvement.
    Enhancing strategic partnerships means continuing to expand 
partnerships that extend the reach of benefits and services available 
for Veterans and their families.
    VA has chosen Breakthrough and Management Initiatives designed to 
implement these transformational strategies. A single dashboard is 
maintained for each Initiative--displaying resources, schedule, 
dependencies, and the senior leader's assessment and recommendations. A 
composite dashboard is used to monitor all initiatives as a group--
highlighting status for resources, dependencies and schedule. In 
addition, the composite dashboard displays progress on each 
Initiative's top-level metric.
    Each Initiative is sponsored by executive leaders at VA; they meet 
bi-weekly with each Breakthrough Initiative's team of accountable and 
responsible leaders. Progress on Management Initiative is assessed 
through Monthly Management Reviews, which is an enduring management 
forum chaired by the Deputy Secretary. In addition, the Secretary or 
the Deputy Secretary chair a weekly MyVA Senior Leader Meeting during 
which the Department's and Administrations' leaders review progress, 
discuss accomplishments, share best practices, and gain broader 
situational awareness.
    These strategies are helping VA become the high-performing 
organization Veterans deserve and taxpayers expect: an organization 
with sound strategies, innovative leaders and employees designing 
systems and processes that anticipate and respond to Veterans' evolving 
needs and expectations. They are timeless, business-savvy principles 
that will be effective over the long term: the strategies will be as 
relevant in the next Administration as they have been in this one. 
Initiatives such as the Diffusion of Excellence will provide benefits, 
both in FY 2017 and in future years, eventually becoming part of ``how 
VA does business.''
                                 ______
                                 
Response to Posthearing Questions Submitted by Hon. Mazie K. Hirono to 
  Hon. Robert McDonald, Secretary, U.S. Department of Veterans Affairs
    Secretary McDonald, I am pleased to see the Commission's 17th 
recommendation is to amend VA's current health care eligibility 
regulation and provide VA health care and benefits to veterans with 
other than honorable (OTH) discharges, if their overall service is 
deemed honorable. This issue is critical to ending veteran homelessness 
given the significant population of veterans with PTSD, and 
experiencing homelessness also experiencing barriers because of other 
than honorable discharges. This is why I have cosponsored the Homeless 
Veterans Services Protection Act with Sen. Murray to exempt homeless 
veterans from disqualification for related benefits from VA. You state 
in your August 2, 2016 letter to President Obama on the Commission's 
report that VA finds recommendation #17 neither feasible nor advisable 
due to cost ($864 million in fiscal year 2019), due to VA is currently 
drafting regulations on this issue and that many of this population 
qualify for care under other authorities.

    Question 5.  Could you elaborate on when the proposed regulations 
will be finalized and to what extent it would expand eligibility to 
this population?
    Response. VA's proposed health care regulations regarding tentative 
eligibility and enrollment for Veterans with other than honorable 
discharges are still under review within the Department and we 
regrettably cannot provide a timeline for completion.
    Secretary McDonald, in your testimony, you mention that ``At 
present, VA is served by 25 advisory committees, including a newly 
reconstituted Special Medical Advisory Group, which consists of leading 
medical practitioners and administrators, and a newly established MyVA 
Advisory Committee, which brings together business leaders, medical 
professionals, government executives, and Veteran advocates. These 
advisory committees advise VA on strategic direction, facilitate 
decisionmaking, and introduce innovative business approaches from the 
public and private sectors'' (p. 10).

    Question 6.  Could you elaborate on the internal process VA uses to 
determine which recommendations are implemented and how they are 
implemented?
    Response. The subject matter experts for each recommendation made 
by any of VA's advisory committees will review the recommendation and 
make an initial determination of whether or not VA should concur with 
the recommendation. If the subject matter experts agree with the 
recommendation, they then articulate a plan for implementation. These 
initial determinations and plans for implementation are reviewed by 
senior VA leadership prior to submitting the Department's formal 
response to the advisory committee.

    Chairman Isakson. We will call our second panel.
    Our second panel are representatives from the Commission on 
Care. When I got the Commission's report a few weeks ago on my 
desk, I took it home for early reading, for lots of reasons. I 
knew there was a lot of thoughtful input and progress made. I 
wanted to see what the Commission had to say.
    I want to commend the Chairman and the Commissioner present 
and the other members on the work that you did. A lot of people 
do not give those private citizens, who volunteer their time to 
give us good advice, the credit they deserve, but we appreciate 
very much what you have done.
    We are going to hear from both of you today. Our witness to 
testify first is Ms. Nancy M. Schlichting. Is that the correct 
pronunciation? OK--the Chairman of the Commission on Care, and 
Hon. Thomas E. Harvey, Esq., who must be an attorney if he has 
got ``esquire'' behind it. Is that right? [Laughter.]
    Mr. Harvey. You nailed that one, Mr. Chairman.
    Chairman Isakson. We appreciate both of you being here 
today. We appreciate the work that you did. You will both be 
recognized for up to 5 minutes each. If you have any printed 
testimony you want to submit for the record, it will be 
accepted and printed as is.
    Ms. Schlichting.

 STATEMENT OF NANCY M. SCHLICHTING, CHAIRPERSON, COMMISSION ON 
                              CARE

    Ms. Schlichting. Chairman Isakson, Ranking Member 
Blumenthal, and Members of the Committee, thank you for the 
invitation to discuss the report of the Commission on Care, for 
your support of the Commission, and for the extension of time 
that you gave us to complete our work.
    It has been a privilege and an honor to serve as the Chair 
of the Commission charged with creating the roadmap to improve 
veterans' health care over the next 20 years. For the last 35 
years I have served in senior leadership roles in large 
hospitals and health systems, and for the last 18 years I have 
been in Detroit, MI, at Henry Ford Health Systems, serving for 
13 years as the President and CEO.
    My experience in leading Henry Ford, which is a $5 billion, 
27,000-employee health system, through a major financial 
turnaround and navigating our organization through the years of 
massive job loss in Michigan, population decline, the 
bankruptcies of our city and major employers while still 
growing substantially, making major capital investments in our 
communities, and winning the 2011 Malcolm Baldridge National 
Quality Award, have prepared me very well for the demands and 
complexity of the Commission's work.
    Our Commission was composed of 15 talented and diverse 
leaders. We developed several principles to guide our work, 
including creating consensus and being data-driven, creating 
actionable and sustainable recommendations, and most 
importantly, our focus on veterans receiving health care that 
provides optimal quality, access, and choice.
    The independent assessment report you commissioned was 
invaluable as a foundation for our work. It is a comprehensive, 
systems-focused, detailed report that revealed significant and 
troubling weaknesses in VHA's performance and capabilities.
    Our work took place over 10 months, with 12 public meetings 
over 26 days. We sought the broadest input possible, had 
intense debate and dialog, yet had a unified focus at all 
times: what is best for veterans.
    I believe we have produced a very good report that is 
strategic, comprehensive, actionable, and transformative. 
Twelve of the 15 Commissioners signed the report, signaling 
bipartisan support, and the three who did not sign had 
divergent views. One thought we had done too much and two 
thought we had too little transformation.
    The VHA requires transformation, which is the focus of our 
recommendations. There are many glaring problems, including 
staffing, facilities, IT, operational processes, supply chain, 
and health disparities, that threaten the long-term viability 
of the system. Perhaps even more importantly, the lack of 
leadership continuity, strategic focus, and a culture of fear 
and risk aversion threaten the ability to successfully make the 
transformation happen over the next 20 years.
    Transformation is not simple or easy. It requires stable 
leadership, expert governance, major strategic investments, and 
a capacity to reengineer and drive high performance.
    Some of our Commissioners believed in moving VA to a payer-
only model. Some believe that government simply cannot run a 
complex health system and that veterans should have the same 
choice that Medicare beneficiaries have. Yet we believe VA and 
VHA, under current leadership, Secretary McDonald and Under 
Secretary Dr. David Shulkin, are making progress, are aligned 
with most of our recommendations, and we believe that VHA 
should be invested in, for several reasons.
    One is the model of integrated care delivery; second, the 
clinical quality, which is comparable or better than the 
private sector in most metrics; third, the history of clinical 
innovation, veterans-focused research, medical education, and 
emergency capacity; fourth, the specialty programs; and fifth, 
the role as a safety net provider for millions of complex and 
low-income veterans that may not or could not be filled by the 
private sector in many markets. As we know, even with the 
Affordable Care Act access to primary care and mental health 
professionals across the country, it is still very challenging.
    Our recommendations fall into four major categories:
    First, creating a VHA care system which fully integrates 
VHA, private sector, and other Federal providers, including the 
DOD and other providers, and that VHA continue to provide care 
coordination and vet all of the providers in the networks.
    Second is the leadership system and governance, and a 
particular emphasis on continuity of leadership, leadership 
development, and creating oversight through a board of 
directors.
    Third is the operational infrastructure, focusing on IT, 
facilities, performance management, H.R. and workforce, supply 
chain, and diversity and health care equity.
    Finally, fourth, eligibility--focusing on other-than-
honorable discharge eligibility for health care benefits and 
eligibility design.
    We clearly do not want this report to sit on a shelf, and 
we ask for your help to make our report come to life through 
enabling legislation that was included that does require your 
action.
    We are mindful that some of our recommendations have cost 
implications and we worked with health economists in modeling 
different options. We do not suggest that Congress has not 
already made very substantial investments in the system. 
Rather, we call for strategic investments in a much more 
streamlined system that aligns VA care with the community.
    I would be very pleased to be a resource for the Committee 
as you continue your work on these issues. I would also look 
forward to your questions. Thank you very much.
    [The prepared statement of Ms. Schlichting follows:]
       Prepared Statement of Nancy M. Schlichting, Chairperson, 
                           Commission on Care
    Chairman Isakson, Ranking Member Blumenthal, and Members of the 
Committee: I am pleased to appear this afternoon to discuss the 
workings, deliberations, findings, and recommendations of the 
Commission on Care, which I was privileged to chair. And I am delighted 
to be accompanied by my colleague, Dr. Delos (Toby) Cosgrove, the 
Commission Vice Chairperson, and the Chief Executive Officer (CEO) of 
the Cleveland Clinic. I also want to take this opportunity to thank you 
for your support of the Commission, and your assistance in providing us 
an extension of time to complete our work.
    For the last 13 years, I have served as the CEO of the Henry Ford 
Health System (Henry Ford), a Detroit-based $5 billion, 27,000-employee 
organization, which I joined after many years of senior-level executive 
positions in health care administration. I believe my experience in 
leading Henry Ford through a dramatic turnaround of its finances and 
culture and in winning a Malcolm Baldridge National Quality Award and 
national awards for customer service, patient safety, and diversity 
initiatives played a role in the President's selecting me to chair this 
important body. I accepted this position not only because I was honored 
to be selected, but because I hoped that this commission could make a 
difference. I believe our report offers that promise.
    As you well know, Mr. Chairman, just a little more than two years 
ago, Congress and the Administration faced a real crisis of confidence 
in a health system some had once seen as providing the best care 
anywhere. In 2014, alarming delays in providing needed care, and the 
scandal surrounding deceptive reporting on patient-scheduling, led to 
the enactment of a far-reaching omnibus law that established the 
Commission on Care.
    Congress is to be commended for including in that law provisions 
that commissioned an independent assessment of VA health delivery and 
that charged our commission to assess access to care and critical 
strategic issues. I was privileged to work with a group of 
commissioners who brought a diverse, rich breadth of experiences and 
perspectives while sharing a strong commitment to our veterans.
               the commission's veteran-centered approach
    The Independent Assessment, released in September 2015, was 
invaluable in providing the Commission a comprehensive, carefully-
researched, system-focused analysis that both informed our work and 
provided an invaluable integrated framework for our examination and 
deliberations.
    As we explained in our interim report, early on the Commission 
adopted a set of principles to guide our work; that identified both how 
we would proceed and the core values we would honor. Our adherence to 
those principles proved critical, in my view, to the development of a 
final report that is value-based and centered on our veterans.
    While each of those principles was meaningful and important to our 
work, let me highlight just a few I think are particularly relevant to 
our dialog this morning:

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

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

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

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

        ``Fragmentation of care is of concern because it diminishes 
        continuity and coordination of care resulting in more emergency 
        department use, hospitalizations, diagnostic interventions, and 
        adverse events. The VA serves an especially large number of 
        persons with chronic medical conditions or behavioral health 
        diagnoses--populations especially vulnerable to untoward 
        consequences resulting from fragmented care.'' \2\

    \2\ Kenneth W. Kizer, MD, MPH, ``Veterans and the Affordable Care 
Act,'' JAMA, vol. 307, no. 8 (Feb. 22/29, 2012) accessed at https://
commissiononcare.sites.usa.gov/files/2016/01/20151116-02-
Veterans_and_the_Affordable_Care_Act_JAMA_Feb2012_Vol307-No8.pdf
---------------------------------------------------------------------------
                      needed congressional action
    Importantly, our recommendations highlight the critical role we see 
for Congress. The Commission certainly recognizes that veterans' access 
to care has long been a high congressional priority. Congress has 
strengthened the foundation of care-delivery through legislation, 
provided needed medical-care funding, and conducted important 
oversight. In creating our Commission, you asked the important 
question, how can the Nation best deliver veterans' care in the years 
ahead? Let me highlight some of the critical steps we recommend 
Congress take:

     Provide VA needed authority to establish integrated care 
networks through which enrolled veterans could elect to receive needed 
care from among credentialed providers without regard to geographic 
distance or wait time criteria;
     Address fundamental weaknesses in VHA governance;
     Provide VA more flexibility in meeting its capital asset 
and other needs, including--
        (1)  Establishing a capital asset realignment process modeled 
        on the DOD BRAC process;
        (2)  Waiving or suspending the authorization and scorekeeping 
        requirements governing major VA medical facility leases;
        (3)  Lifting the statutory threshold of what constitutes a VA 
        major medical facility project;
        (4)  Reinstating broad authority for VHA to enter into 
        enhanced-use leases; and
        (5)  Easing, for a time-limited period, otherwise applicable 
        constraints on divestiture of unused VHA buildings.
        (6)  Establishing a line item for VHA IT funding and authorize 
        advanced appropriations for that account.

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

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

    I would be pleased to be a resource to this Committee as you 
continue to work on these issues. I would also be happy to respond to 
your questions.

    Chairman Isakson. Thank you very much.
    Tom Harvey?

    STATEMENT OF HON. THOMAS E. HARVEY, ESQ., COMMISSIONER, 
                       COMMISSION ON CARE

    Mr. Harvey. Chairman Isakson and Members of the Committee, 
Ranking Member Blumenthal, it is a pleasure for me to be here 
with you today to address the work of the Commission on Care. 
It is a particular pleasure because for 5 years I sat where Tom 
Bowman is sitting behind you as Staff Director of the Committee 
under Senator Alan K. Simpson.
    In my personal experience, the vast majority of VA staff at 
all levels are professional and highly committed to the 
veterans they serve. Like many of us, I was concerned to learn 
of the issues that came to light regarding the manipulation of 
wait times for appointments at the Phoenix VA medical center. I 
am happy to have been a part of the effort to better understand 
what had gone awry and to find a solution to those problems for 
today and into the future.
    Service on the Commission has been an interesting 
experience. The Commissioners brought their varied backgrounds 
to this venture with one characteristic in common: all of us 
were committed to assuring that this country's commitment to 
its veterans was well met. We may have differed on just how 
best to do that, but the good faith of the Commissioners was 
palpable. Under the leadership of our very competent Chair, 
Nancy Schlichting, each Commissioner had an opportunity to 
express his or her priorities and to defend those should they 
be challenged.
    The final report contains 18 recommendations. Some of these 
are good ideas. Others strike me as unrealistic. Some are 
included because one or more of the Commissioners felt very 
strongly about them. The White House made it clear to our Chair 
that they would like a consensus report. I signed off on the 
report in deference to that expectation, even though I had some 
reservations.
    I had had a full and fair opportunity to express my 
concerns in open session. Among the many things I learned from 
Senator Simpson was that in negotiations on matters such as 
these, after all of the give and take you have to be able to 
take what you can, hold your head high, and declare victory one 
more time. And that is what I would like to do here.
    Over nearly a year that the Commission met, we discussed a 
broad array of problems within the VA. Many of those were long-
standing. We discussed those with senior VA leadership, who 
themselves recognized that there were issues that were beyond 
their ability to address. I like to think that by shining the 
light of discussion on some of those, we may have provided the 
impetus to the professional staff of the VA to raise such 
issues.
    Some quick statistics regarding veterans and the VA. In 
2008, there were 26 million veterans. Today there are about 21 
million. In 2008, the budget of the VA was $68 billion. Today 
it is about $175 billion. In 2008, the VA had 240,000 
employees; today about 368,000. The number of veterans is in 
precipitous decline. We lose about 5 million a decade. Of the 
total number of veterans, about one-third use the VA for some 
or all of their health care, many just for prescriptions.
    In my written testimony, I highlight some of the specific 
issues in the report that I had problems with. I would, of 
course, be pleased to discuss those with the Committee.
    What I wish we had done: there are a number of very basic 
questions that I wish the Commission had addressed. Some of 
these are things that no one wants to touch, such as why do we 
have a VA health care system at all? This is something that a 
number of people ask me.
    We need to do something for those who are injured in 
training or in combat, but the fact is, most of those being 
treated in the VA system are suffering the same illnesses most 
of us can expect to experience with the passage of time. There 
is nothing uniquely veteran about those injuries or diseases, 
and in most communities there is ample surplus base to treat 
them in the community hospital.
    Some say there are some veteran-specific medical 
conditions, such as spinal cord injury, blind rehab, Post 
Traumatic Stress Disorder, and Traumatic Brain Injury. In fact, 
annually, automobile and diving accidents create more SCI 
patients than the VA treats. And most of the veterans using the 
VA system are Medicare-eligible. If they use the community 
hospital, it can just bill Medicare.
    If we are committed to having a VA health care system, who 
should be eligible to use it? Some people assume that once an 
individual puts on a uniform they are entitled to free health 
care for the rest of their lives--no need to worry about health 
insurance ever again. I do not think this is what we want.
    A system was established a few years ago which said that 
for those with service-connected disabilities, treatment of 
those disabilities was the first priority of the VA system. 
Priorities also included veterans of very low income. Is there 
a better way to articulate eligibility so that the veteran--
and, as importantly, the American taxpayer--can better 
understand what the VA health care system is trying to do, who 
it is obligated to provide care for?
    In reviewing the materials relating to patient scheduling, 
I was struck by the fact that the gatekeeper for most VA care 
is a primary care physician. The medical education 
establishment is just not turning out a lot of primary care 
physicians, so that is a bottleneck that is only going to get 
worse. And over the past several years there have been 
significant changes in the way health care has been delivered 
in the United States. That, too, will continue over the next 
several years.
    Was the Commission a success? Several of my colleagues 
believed that we could only count it a success if the 
Administration and the Congress adopted the entire document as 
we presented it. I personally am willing to declare victory 
with the changes that VA Secretary McDonald, Deputy Secretary 
Gibson, and Under Secretary for Health Dr. David Shulkin, and 
their staffs, are now making.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Harvey follows:]
      Prepared Statement of Hon. Thomas E. Harvey, Esq., Member, 
                           Commission on Care
    Chairman Isakson, Ranking Member Blumenthal, and Members of the 
Committee. It is a pleasure for me to be here before you today to 
address the work of the Commission on Care. That pleasure is heightened 
by the fact that, for five years I sat on the other side of the table 
as Chief Counsel and Staff Director of the Committee then Chaired by 
Senator Alan K. Simpson (R, WY). I have also been on this side of the 
table twice when the Committee considered my nomination to be Deputy 
Administrator of the Veterans Administration and, in 2005, to be 
Assistant Secretary of the Department of Veterans Affairs for 
Congressional Relations.
    Mr. Chairman, I particularly want to thank you for placing my name 
in consideration for appointment by the Majority Leader to serve as a 
member of the Commission on Care.
    In my personal experience, the vast majority of VA staff at all 
levels have been professional and highly committed to the veterans they 
serve. Like many of us, I was concerned to learn of the issues that 
came to light regarding, among other things, the manipulation of wait 
times for appointments at the Phoenix VA Medical Center. I am happy to 
have been a part of the effort to better understand what had gone awry 
and to find solutions to those problems for today and into the future.
    Service on that Commission has been an interesting experience. I 
have known some of the Commissioners for many years. Commissioner Dave 
Gorman, formerly Executive Director of the Disabled American Veterans, 
and I go back to my time on the Committee Staff in 1981. Commissioner 
Michael Blecker and I served as members of the Commission on 
Servicemembers and Veterans Transition Assistance in the 1990's. 
Commissioners Darin Selnick and Lucretia McLenny and I served in the 
Department during my stint there from 2005 to 2008.
    The Commissioners brought their varied backgrounds to this venture 
with one characteristic in common: All of us were committed to assuring 
that this country's commitment to its veterans was well met. We may 
have differed in just how best to do that, but the good faith of the 
Commissioners was palpable. Under the leadership of our very competent 
Chair, Nancy Schlicting, each Commissioner had an opportunity to 
express his or her priorities and defend those, should they be 
challenged.
    The final report, ably assembled by a very competent staff under 
the leadership of Executive Director Susan Webman, and John Goodrich, 
Executive Officer, contains 18 recommendations. I personally believe 
that some of these are good ideas. Others strike me as unrealistic. 
Some are included because one or more of the Commissioners felt very 
strongly about them. The White House made it clear to our Chair and 
Vice-Chair, Dr. Delos Cosgrove, that they would like a consensus 
report. I signed off on the report in deference to that expectation 
even though I had some reservations. I had had a full and fair 
opportunity to express my concerns in open session. Among the many 
things I learned from Senator Simpson was that in negotiation on 
matters such as these, following all of the give and take, you have to 
be able to take what you can, hold your head high, and declare victory 
one more time.
    And that is what I would like to do here.
    The Department of Veterans Affairs is an immense organization--a 
behemoth, so to speak. Making changes in such an organization has been 
described as comparable to making a change in direction of a naval 
carrier battle group. There are innumerable moving pieces, all of which 
have to move together in a choreographed fashion. Everything can't 
happen at once--although in our impatience, we would like that to be 
the case.
    Over nearly a year that the Commission met, aided by the very 
comprehensive Independent Assessment, we discussed a broad array of 
problems within the VA. Many of those were long standing. We discussed 
those with senior VA leadership, who themselves recognized that there 
were issues that were beyond their ability to address. I like to think 
that by shining the light of discussion on some of those, we may have 
provided the impetus to the professional staff of the VA to raise such 
issues--and the solutions that they may have been unable to raise 
previously.
                               background
    In 2014 there were problems at the Phoenix VAMC with regards to 
scheduling veterans for medical appointments. There have been 
significant demographic changes in the veteran population with a major 
migration from the snow belt and the rust belt to the sun belt. It was 
suggested that several veterans died while waiting for a medical 
appointment. VA IG found that the VAMC was gaming the scheduling 
process and keeping duplicate records attempting to show that 
appointments were scheduled within time guidelines. The IG did not find 
that the wait times for appointments were causative of the deaths that 
did occur.
    So, in 2014, Congress passed the Veterans Access, Choice and 
Accountability Act (The Choice Act) which provided, among other things, 
that if you couldn't get a VA appointment within 30 days, or if the VA 
was more than 40 miles from your home, you had the choice to get care 
in the community at VA expense. The Act also provided for a detailed 
study of many aspects of VA health care and its management and created 
a Commission on Care to review the study and make recommendations as to 
what the VA health care system should look like in 20 years. The 15 
member commission was bipartisan, with appointments from the leadership 
of the House and Senate and the President. The Commission's report was 
issued just after July 4th of this year
                             my background
    Much of my professional career has been in positions related to 
serving this country's veterans. I spent five years as Staff Director 
of this Committee (1981-83 and 1995-96), I also spent three years as 
Deputy Administrator of the Veterans Administration (1986-89), and for 
nearly three years was Assistant Secretary of Veterans Affairs for 
Congressional Relations under Secretary Jim Nicholson (2005-08).
    I also served as a member of the Congressional Commission on 
Servicemembers and Veterans Transition Assistance, then chaired by 
former VA Secretary Tony Principi.
    After law school at Notre Dame (BA, 1963; JD, 1966) I served for 
nearly five years in the U.S. Army (1966-71) as an infantry officer, 
two and a half of those in Vietnam. While there, I commanded a company 
with the 173rd Airborne Brigade and served as an advisor with the 
Vietnamese Airborne Division. My decorations include the Silver Star 
and Purple Heart and 12 others for valor and service. I am a Ranger, 
Senior Parachutist and have the Combat Infantryman's Badge.
    I have remained connected to many of the issues affecting veterans 
through the publications of the VA and of the VSO's. I am a life member 
of the VFW, DAV and AMVETS.
    Other aspects of my professional life include nearly five years 
with Milbank, Tweed, Hadley and McCloy, a major Wall Street law firm 
(1972-77), and my selection as a White House Fellow in 1977--and my 
service in that role as an assistant to Admiral Stansfield Turner, then 
the Director of the Central Intelligence Agency. Following that I also 
served in the Department of the Army and of the Navy at the Deputy 
Assistant Secretary level (1978-81), and as General Counsel of the 
United States Information Agency (1983-86).
             some statistics regarding veterans and the va
    In 2008, there were 26 million veterans, today there are about 21 
million. In 2008 the budget of the VA was $68 billion, today about $175 
billion. In 2008, VA had 240,000 employees, today about 368,000. The 
number of veterans is in precipitous decline--we lose about 5 million a 
decade. Of the total number of veterans, about a third use the VA for 
some or all of their health care. Many just for prescriptions.
           significant findings/recommendations in the report
    VHA Care System (recommendation #1): The Commission recommended 
that the VA partner with providers in the community so that health care 
could be available to veterans in the most efficient, cost effective 
way possible. If there is capacity in the community to offer major 
cardiac surgery, it doesn't make sense to send a veteran to a VA 
facility across the country for the same thing. While this seems to 
make sense, some in the veteran community think that this would be the 
death knell for the VA health care system which is important to many 
veterans.
    Board of Directors (recommendation #9): I think it is unlikely that 
Congress will relinquish the authority that it has over the VA and give 
that to an independent board of directors. Indeed, I would think that 
the President would not want to relinquish his Executive prerogatives 
to appoint or discharge individuals directly. Would that be a good 
idea? Perhaps, if the Veterans Health Administration was a business, 
but just as it was not adopted after being proposed in the 1999 
Commission report, I would expect that it would be rejected now.
    BRAC (recommendation #6): A Base Realignment and Closing Commission 
type of process would be a good idea to enable the VA to eliminate 
facilities that are under utilized so that resources could be 
concentrated where the veteran patients are. I understand that there 
are about 50 VA hospitals with less than a 30% occupancy rate. But, 
even though there may be very few eligible veterans in a particular 
hospital's catchment area, there are some. And there are hundreds 
individuals working at those hospitals. Two senators and one or more 
Members of Congress will fight to the death to protect those jobs.
    Underutilized facilities (recommendation #6): A problem VA has is 
that on many VA campuses, there are scattered buildings that are not 
used. Congress has made it virtually impossible to get rid of those, 
and even if you could, they are in the middle of a campus and would not 
lend themselves to easy disposal. Many have been designated as 
historically significant. VA has generally done the sensible thing and 
just used those for storage which is much less costly than trying to 
give the buildings to GSA or another government agency.
    Family Members (recommendation #18): One recommendation of the 
Commission is that the VA should allow family members of veterans--or 
others in the community--to access underutilized VA hospital 
facilities. They would do this and pay for the services received 
thereby creating a source of revenue to the facility to complement 
appropriations.
    This is a position particularly espoused by Commissioner Phillip 
Longman, the author of a 1995 book on VA health care entitled ``The 
Best Care Anywhere.'' He was recently interviewed for the Washington 
Monthly magazine and took that opportunity to state his support for 
aspects of the Commission report which he believed would bring us 
closer to a single payer health care system--true ``socialized 
medicine.'' Commissioner Longman was recommended for the Commission to 
the Minority Leader by Senator Bernie Sanders.
    Allowing family members to use the VHA system isn't realistic. Look 
at the patient population of VHA--almost all are male. Many are 
elderly. We wring our hands about the problem of providing appropriate 
care to women veterans--and about 9% of veterans are women. I have been 
faulted for the use of a sample size of one--my wife--in addressing 
this issue. She is not about to go to the VA for her health care. And 
don't even talk about pediatrics.
    And if we did have family members use the VA system, that would 
cannibalize the patient population of the community hospitals in the 
area. I have at times in the past seen the numbers of local hospitals 
that close each year because they can't operate efficiently. This would 
exacerbate that problem.
    Personnel (recommendation #15): The Commission recommends changing 
the personnel system so that VA could, among other things, offer 
salaries competitive with the private sector. A review of the IRS 990 
Forms of not-for-profit hospitals gives a sense of what those salaries 
are. In New York, for example, some hospital CEOs make in the range of 
$10 million annually. The President of the United States makes 
$400,000.
    Health Equity (recommendation #5): The Commission places an 
emphasis on ``Health Equity,'' a concept that I had never heard of 
prior to my service on the Commission. It focuses on the fact that 
minority veterans (indeed, any minorities) have less favorable health 
care outcomes than white veterans. This is much more of a social 
welfare issue than one of direct health care. The fact is, there is a 
maldistribution of health care resources in the country. Not many 
doctors want to go to rural areas, Indian reservations, poor inner city 
neighborhoods, etc. What are the responsibilities of VHA to try to 
rectify that situation? These seem to me to be societal problems, not a 
VA problem.
    Information Technology (recommendation #7): The VA generally lacks 
the skill sets to deal effectively with IT needs. It has to contract 
with consultants to tell it what it needs and then to draft the 
specifications to meet those needs and then provide the services to 
make the hardware and software respond to those needs. In the 
Commission report we are saying that VA should get a commercial off the 
shelf product that does an amazing range of things, to include 
electronic health records, scheduling, business applications to effect 
the payment of non-VA providers and coordinating data among the 
different VA administrations. The fact is, VHA has spent years trying 
to develop a scheduling system--and isn't there yet. I think it is 
really asking for something well beyond the capability of the VA to 
accomplish to suggest that it get the comprehensive--and very 
expensive--IT system we would like them to have.
    Veteran Voices: One of our Commissioners bemoans the fact that we 
haven't done a comprehensive survey of what veterans want. In fact, we 
have had extensive comment from the VSO community--the group that 
Congress looks to to articulate the concerns of veterans. The reality 
is, they claim to speak for veterans and are perceived to do so.
                        what i wish we had done
    There are a number of very basic questions that I wish the 
Commission had addressed. Some of these are things that no one wants to 
touch. Such as:
Why do we have a VA health care system at all?
    This is something that a number of people ask me. We need to do 
something for those who are injured in training or in combat, but the 
fact is, most of those being treated in the VA system are suffering the 
same illnesses most of us can be expected to experience with the 
passage of time. There is nothing uniquely ``veteran'' about those 
injuries or diseases. And in most communities, there is ample surplus 
space to treat them in a community hospital. Some say that there are 
some veteran specific medical conditions--such as spinal chord injury, 
blind rehabilitation, PTSD and Traumatic Brain Injury. In fact, 
annually automobile and diving accidents create more SCI patients than 
the VA treats. Very few VA SCI patients were injured in combat. They 
were in accidents like so many others.
    And most of the veterans using the VA system are Medicare eligible. 
If they use a community hospital, it can just bill Medicare. VA could 
consider paying for the Medicare supplement insurance, which would 
limit the veteran's out-of-pocket expense.
If we are committed to having a VA health care system, who should be 
        eligible to use it?
    Some people assume that, once an individual puts on a uniform, they 
are entitled to free health care for the rest of their lives--no need 
to worry about health insurance ever again.
    I don't think this is what we want. A system was established a few 
years ago which said that for those with service-connected 
disabilities, treatment of those disabilities was the first priority of 
the system. Priorities also included veterans who were just poor.
    Is there a better way to articulate eligibility so that the 
veteran--and, as importantly, the American taxpayer--can better 
understand what the VA health care system is trying to do, who it is 
obligated to provide care for?
Where are the VA hospitals? Where are the veterans?
    I think that if we look closely, we'll find a real disconnect here. 
Why is it that the issue of wait time delay first arose in Phoenix? 
Because a lot of veterans who used to live in the snow belt retired and 
moved there because of the weather. Thus the greater demand on the VA 
health care system there. Meanwhile in Canandaigua, NY, the VA 
maintains a hospital with a 1,700 bed capacity--within an hour driving 
distance of three other VA hospitals--with (when last I heard the 
numbers) about 70 patients and a hospital work force of more than 700. 
There was talk of closing Canandaigua at one time, but it was 
determined that it couldn't be done because it was the largest employer 
in the region.
                        va hospital construction
    Every Member of Congress would like a new VA hospital built in his 
or her Congressional district. The multi-billion dollar construction 
project will provide construction jobs for five years, and once 
completed, the hospital will have an annual operating budget of about 
$250 million. And the hospital will be perceived as a benefit to a 
number of constituents--a demonstration of the ability to ``bring home 
the bacon.''
    VA management of most recent new construction projects has been 
disastrous. With the predicted decline in the veteran population, I 
would suggest that no new construction be undertaken in the foreseeable 
future.
                               processes
    In reviewing the materials relating to patient scheduling, I was 
struck by the fact that the gatekeeper for most VA care is a primary 
care physician. The medical education establishment is just not turning 
out a lot of primary care physicians. So that is a bottle neck that is 
only going to get worse.
    There was an op-ed in the Wall Street Journal recently by a retired 
VA primary care doctor. He observed that many veterans do, in fact, get 
their primary health care elsewhere, but they want to utilize the VA 
for their prescriptions because of the very low co-pay. Yet to do that, 
they have to schedule an appointment with the VA primary care doctor, 
who then takes the prescriptions from the outside doctor and, assuming 
they are on the VA formulary, processes them to be filled by the VA 
pharmacy. He suggests that much of the scheduling problem could be 
eliminated if the prescriptions from the outside doctor could be 
processed directly.
    General changes coming to health care: Over the past several years, 
there have been significant changes to the way health care is delivered 
in the U.S. There is much more reliance on out-patient care rather than 
in-patient. The Affordable Care Act (Obama Care) and what follows that 
will mean many more changes to come in the future. In addition, if the 
decline in the number of veterans continues as it has, by 20 years 
hence, there will only be about 12 million veterans alive--with a 
physical plant that was designed to accommodate more than twice that 
number.
    Was the Commission a success? Several of my colleagues believed 
that we could only count it a success if the Administration and the 
Congress adopted the entire document as we presented it. I personally 
am willing to declare victory with the moves that VA Secretary 
McDonald, Deputy Secretary Gibson and Undersecretary for Health, Dr. 
David Shulkin, and their staff are now making.

    Thank you.

    Chairman Isakson. Thank you, Mr. Harvey.
    In light of the fact that the Committee Members have been 
so cooperative in shuttling back and forth with votes and other 
things that have been compromising our time, I am going to 
continue to deviate from my normal practice and go out of order 
by not recognizing myself but instead recognize Senator Manchin 
from West Virginia.
    Senator Manchin?

     HON. JOE MANCHIN III, U.S. SENATOR FROM WEST VIRGINIA

    Senator Manchin. Thank you, Mr. Chairman, for being so 
kind, as you always are.
    Thank you all for being here. I am so sorry I had to go and 
vote on the first, and missed the Secretary and Under 
Secretary.
    To either one of you, or to both of you, if you would, it 
is my understanding that the Commission on Care's 
recommendation include allowing the primary provider to be 
outside the VA. It was very clear, and I understand they aim to 
improve access. It worries me that the veteran could receive 
medical care completely outside the VA with little to no 
oversight. That is my concern.
    In West Virginia we have quite a number of veterans, as you 
know. Doctors outside the VA network can be trained in military 
and veteran culture. I am concerned that many are not equipped 
in dealing with the unique needs of veterans. Is a non-VA 
doctor able to spot a veteran with PTSD? Are they aware of 
certain symptoms of toxic exposure? Do they know that veterans 
may not disclose certain symptoms if they are uncomfortable?
    These are all valid concerns. I am speaking--because I go 
around to my clinics and I go around to the hospitals; I speak 
to a lot of the veterans. What has been done in the past to the 
veterans is unconscionable--the wait time and all the stress--
and I think everybody recognized that. But when I talk to the 
veterans, they still want veteran care. They demand it. I have 
asked them--I said, you know, if you cannot get it, we will 
get--they say, no, no, they take care of me here; they know 
what I need; they know how to treat me.
    That is my concern. In the future, how do you see VA 
striking a balance between making sure a veteran receives 
access to care in the community and the care received is high 
quality? How can you say that will happen in the private 
sector?
    Ms. Schlichting. Well, one of the things that is very 
important about our recommendations is that we are not 
proposing the current system of having a separation between the 
private sector and the VA. What we are proposing is a more 
integrated model.
    Senator Manchin. Who is going to coordinate that? I mean--
--
    Ms. Schlichting. VA is coordinating that. And VA----
    Senator Manchin. So, you want VA to be the gatekeeper?
    Ms. Schlichting. VA has to vet the network, select the 
providers that meet very strict criteria. In the report we 
include several elements of that, including not only their 
education and their experience, but also their military 
competency. Of course, about 70 percent of physicians in this 
country train in VA medical centers, so it is possible that we 
can create a very well-equipped set of primary care physicians 
when needed.
    We also suggested that every market should be carefully 
evaluated in terms of access needs. More primary care 
physicians in the community might be needed in some markets 
versus others. Where VA has adequate numbers to provide that 
for veterans, perhaps they would have none.
    So, the control of this VA care system that we are 
proposing is the VA, which includes vetting the networks. It 
includes having high criteria for participation. It could be 
different in different markets, based on need.
    Senator Manchin. Mr. Harvey, I have a question for you.
    Mr. Harvey. Senator, may I just add one other thing----
    Senator Manchin. Sure.
    Mr. Harvey [continuing]. To address a different part of 
your question, can people be trained to be sensitive to the 
veteran experience, and the answer is yes.
    I just turned around to Rick Weidman from the Vietnam 
Veterans of America. I know they have a card--a foldout card 
that has a number of questions they encourage doctors to ask a 
person who is a veteran, you know, about the experience----
    Senator Manchin. Sure.
    Mr. Harvey [continuing]. To elicit some of that----
    Senator Manchin. OK.
    Mr. Harvey[continuing]. Some of that. There is training avai
lable.
    Senator Manchin. I am sorry to hurry you up. Our clock is 
running here. [Laughter.]
    The Commission on Care's proposal that you all have 
characterized is a path that will move VA into being more like 
TRICARE.
    I have spoken to a lot of my veterans and everything, and 
they argue that when CHAMPUS, and then its predecessor TRICARE, 
started offering more low-cost insurance to military retirees, 
we started seeing the co-payments for TRICARE beneficiaries 
starting to rise. They were saying that, you know, it is a 
``gotcha.'' They pull you in and then they get you on the other 
end, making you pay.
    I understand that many of our veterans are concerned that 
shifting care to outside the VA is going to lead to less money 
going to the VA and less services offered, and more coming out 
of their pockets to get what we have committed to them. Ten or 
15 years down the road, I want us to be able to keep the 
promise we made to our veterans, especially those with unique 
injuries like polytrauma, Traumatic Brain Injury, spinal 
injury, and PTSD.
    So, my question to you, Mr. Harvey, do you think the 
characterization that the Commission on Care wants VA to be 
like TRICARE is true, and what do you suggest there? What would 
you suggest Congress consider when thinking about the future of 
the VA health care?
    Mr. Harvey. Actually, Senator, one of our Commission 
members dissented from the Commission report largely for these 
concerns, that if we do this, is this going to be draining 
money away from the VA, from the VA facilities that are needed? 
I do not, frankly, have an answer to that. You know, would it 
be likely that co-payments would increase?
    Senator Manchin. We can already base this on what has 
happened previously.
    Mr. Harvey. Yeah.
    Senator Manchin. If that is the case, I would say, yes, our 
veterans have, really, reason for concern. They truly should 
have reason for concern because it is very well we will go down 
that path.
    Ms. Schlichting. If I could comment on that. I do think 
that it is important to see the balance in the report. While we 
are suggesting primary care----
    Senator Manchin. Yeah.
    Ms. Schlichting [continuing]. Choice, when needed, within 
that VA care network, we are also suggesting significant 
improvements in the operations of the veterans health system.
    Senator Manchin. My State's biggest problem is opiates, OK? 
If you have a doctor over here suggesting some sort of opiates 
and you have the VA trying to wean them off of the opiates we 
are giving to them, how is that going to--who is going to 
coordinate that? Who is going to----
    Ms. Schlichting. The VA is going to coordinate that.
    Senator Manchin. Well, I----
    Ms. Schlichting. They have to.
    Senator Manchin. I am concerned about that. It is the 
biggest problem I have got in my State and it is the biggest 
problem we have with our veterans right now. You need a single 
source basically taking care in curing them. If you have a 
doctor that believes they should be treated by pain--with a 
pill versus alternate care, you have got serious problems. That 
is what I am afraid of. I really, truly am.
    Ms. Schlichting. Well, the VA needs to have clinical 
standards for the providers that are part of that VA care 
network, that are consistent.
    Senator Manchin. Mr. Chairman, I am so sorry to take a 
little bit more time than I should have, but I thank you.
    Chairman Isakson. You are always timely and to the point. 
Thank you, Senator Manchin.
    Chairman Isakson. I am going to just ask one question and 
make one observation.
    Recommendation Number 18, Ms. Schlichting, ``establish an 
expert body to develop recommendations for VA care eligibility 
and benefit design,'' tell me what that means.
    Ms. Schlichting. I think the feeling on the part of members 
of our Commission was we did not have the time or the focus on 
eligibility, but many people felt that it was time to do a 
comprehensive review to really evaluate it as a whole and take 
a look at eligibility standards today.
    There were members of the Commission that felt, for 
example, that some of the lower-priority categories were not 
necessary, that the focus should be on service-connected 
injury, on lower-income veterans. It was felt that that would 
be something that a separate body could take a look at.
    Chairman Isakson. So, when you say lower-level veterans, 
you mean bifurcate the veteran population as to some of them 
being eligible and some of them not?
    Ms. Schlichting. Well, there are several priority 
categories today, as you know, and the question was, are all 
those priorities as essential in today's environment?
    Chairman Isakson. Was there any discussion to expand 
eligibility beyond just veterans?
    Ms. Schlichting. There was some discussion about that as a 
way of helping to make some of the facilities more efficient.
    One example is that with some of the specialty programs 
that exist within VA, the volumes are very low and there is 
potentially a challenge of maintaining those programs, and 
potentially they could become a resource within a community. I 
think there were a number of thoughts about how to best utilize 
the capacity within VA facilities and maintain it, and at the 
same time really look at the total eligibility program.
    Chairman Isakson. Last, and very quickly, was the 
eligibility for VA health care for a non-honorably discharged 
veteran part of that discussion?
    Ms. Schlichting. Yes, that was one of the issues we raised 
as part of our eligibility.
    Chairman Isakson. Did you make a definitive recommendation 
on----
    Ms. Schlichting. Yes.
    Chairman Isakson. And that recommendation was what?
    Ms. Schlichting. Well, it is included in our findings. It 
basically outlines that, for other than honorable, they would 
be put in sort of a tentative category until it could be 
evaluated. But the idea was to provide the care for veterans 
that often have reasons for being put in that category that 
have nothing to do with their service and the honorable service 
they provided while in the military.
    Chairman Isakson. So, it would be a case-by-case basis.
    Mr. Harvey. Mr. Chairman, the concern was that if you have 
a veteran who has had multiple deployments, has served 
honorably for an extended period of time, comes back to the 
States and decides he has just had it and acts up and is given 
an other-than-honorable discharge--not a dishonorable discharge 
but one of the other categories--perhaps that was, in part, 
caused by his multiple deployments--maybe PTSD, maybe traumatic 
brain injury--so, it would be unfair to leave him out of the VA 
care system.
    Chairman Isakson. Thank you very much.
    Senator Sullivan.

          HON. DAN SULLIVAN, U.S. SENATOR FROM ALASKA

    Senator Sullivan. Thank you, Mr. Chairman. I want to thank 
the panel and all the great work that you have done and 
everybody who contributed to the report.
    I am going to begin by thanking Senator Manchin for his 
passion on this issue with regard to opiates. We are having 
similar challenges in Alaska. I actually want to thank Dr. 
Shulkin and Secretary McDonald. We had a big summit in Alaska 
on opioid challenges and heroin challenges this summer, and we 
had some very top, top doctors from the VA come up to Alaska 
for that, Dr. Lee and Dr. Drexler. So, I want to thank both of 
you.
    I want to focus on an area that I did not really see in a 
lot of the recommendations, but I know it is in there because 
it is a really important topic. When you talk about the 
delivery of care, the issue that of course I am very focused on 
in Alaska is delivery of care in rural communities--extreme 
rural communities.
    Mr. Chairman, I apologize. I know this is a little 
unorthodox. I am really sorry I missed hearing the Secretary 
and Dr. Shulkin. I know they are still here, but I would love 
to, gentlemen, be able to maybe chat at one of the breaks or 
something on the tribal sharing agreements that are a concern 
right now, but it relates to this issue.
    I was back home in my State, of course, over the summer, 
like all of us, and in a lot of the communities there just 
seemed to be a very different approach to delivery of health 
care in some of the real far-reaching communities in Alaska 
that are--you know, we do not have roads. We have real unique 
challenges, given the size and distance.
    Some of it relates to how the VA interacts with other 
health organizations--clinics, tribal organizations--in the 
far-reaching communities. One of the things that I saw, because 
I asked everywhere I went--I went to a number of my 
communities--is there seems to be a very different standard, 
depending on the community, even depending on, like, veterans 
sitting next to each other.
    I always meet with veterans no matter where I go in the 
State--try to. Some of them said, hey, no, I can go right down 
the road to the local clinic or the local Native health 
organization. Others say, no, I have to fly to Anchorage, or I 
have to fly to Seattle. That can cost thousands of dollars just 
to get to these--you know, from some of the different 
communities in Alaska. Some of them say, then the VA pays for 
all that and puts us up at a hospital. Others say, no, you are 
on your own, all literally in the same community.
    So, I am just wondering, on this issue, how much have you 
looked at it and what recommendations you have. Then, more 
broadly with regard to consistency on delivery, because it does 
seem very different even in the same communities. Different 
veterans have very different experiences.
    Ms. Schlichting. Well, first of all, I think that what you 
are describing is the challenge of a veterans health care 
system, that is so diverse and covers the entire country, to be 
able to provide meaningful access in every single part of where 
veterans live and work.
    We felt that that was one of the major driving forces for a 
more integrated model, so that in communities where VA 
facilities may not be available, that there is easier access to 
integrate with existing providers within that community. We 
also felt that there was a need for better integration with 
other Federal providers, which could apply certainly within the 
Native American community across the country.
    The consistency of care, frankly, that challenge you 
describe is true with veterans and non-veterans. You know, in 
northern Michigan we have access issues. In some areas we have 
no obstetric services within 200 miles for women who might be 
trying to deliver. It is a challenge, which is one of the 
reasons we feel that it is very important to take a local 
look----
    Senator Sullivan. Yeah.
    Ms. Schlichting [continuing]. In each market to try to 
provide better access.
    The question of why, you know, some veteran has VA pay for 
it, others do not, that might be an eligibility kind of 
determination, which I cannot respond to. Really looking at the 
diversity of markets and how to best provide the care, and 
particularly when veterans are moving, it is not as if that 
veteran population is stable.
    The facilities available in each market are quite variable 
as well. Some may have outpatient facilities that can 
accommodate a lot of needs. Some may not. You know, the need to 
move from more inpatient to outpatient care is something we are 
seeing across health care today. So, it is a challenge, but 
certainly something we had conversations about.
    Senator Sullivan. And are there recommendations that relate 
to this in the Commission report?
    Ms. Schlichting. The concept of the VHA care system really 
incorporates some of the questions that you asked.
    Senator Sullivan. Does it focus on kind of the extreme 
rural communities?
    Ms. Schlichting. Yes.
    Senator Sullivan. OK.
    Thank you, Mr. Chairman.
    Chairman Isakson. Thank you, Senator Sullivan.
    Are you OK on time, Thom?
    Senator Tillis. Yes.
    Chairman Isakson. You are OK on time too?
    Senator Boozman. Yes.
    Chairman Isakson. OK.
    I am going to go to Senator Blumenthal next.
    Senator Blumenthal?
    Senator Blumenthal. Thanks, Mr. Chairman. I want to thank 
you for all the time and energy that you devote into this very, 
very important work.
    To both of you--Mr. Harvey, I think you have raised, in 
passing, one of the central questions that faces us: why have a 
separate VA health care system? I think you have heard some 
answers here, which we see in our daily--literally our daily 
lives when we visit VA health care facilities. Not only do 
veterans want to be with fellow veterans, but there are ways 
that veterans' care is tremendously enhanced by professionals 
who see them literally daily, hourly, for the same kinds of 
wounds, injuries, and so forth.
    I might just add, in an area that is receiving more 
research--there was an article just, I think, yesterday or the 
day before in the New York Times about studies being done on 
hospitals and measures of their quality, and how, when 
consumers are better informed not only about the metrics of 
outcomes but also about how they are cared for, the actual 
outcomes are better when the emotional or social factor is part 
of the measurement.
    I think in all kinds of ways I see the VA health care 
system as not--and I think you share this point of view--why 
should we have it, but it offers the immense opportunity and 
potential to actually lead the Nation in terms of quality, 
because it provides that opportunity to really attract the best 
and the brightest, as it has at certain VA facilities.
    The challenges it faces, as I think one of you stated in 
your testimony, are the same challenges the rest of our health 
care system does. We need more primary care doctors, more 
psychiatrists, more equipment at more affordable prices, more 
pharmaceutical drugs. We can negotiate, but still, rising 
health care costs are a challenge, which mirrors the rest of 
our health care system.
    What I have not seen so far--and maybe, Madam Chairman, you 
can talk a little bit about it--consumer protection, making 
sure that there are policies and procedures designed to monitor 
the quality of care that veterans receive outside the VA health 
care system. The metrics and evaluation can be applied to the 
VA health care facilities, but what about the health care 
outside the VA walls when there are choices offered, when the 
Choice program comes into play, in whatever form it may?
    Ms. Schlichting. Well, a couple of comments in response to 
that.
    One is that the more unified and integrated the so-called 
outside providers are within the VA system, I think the greater 
the opportunity is to really evaluate performance, set clinical 
standards, and apply the same approach that is within VA to 
that care that is received in the community. That is a very 
important and different concept than the Choice program or the 
traditional ways that VA has paid for care in the community.
    Within our recommendations we also suggested that 
performance metrics need to be very comparable; that we should 
have, really, the same metrics of performance within the 
community as within VA, and that those metrics should be a 
requirement of participation really as a vetted provider within 
the VA care system.
    I think the more that that becomes the model, I think it 
begins to allay some of those fears about care being provided 
differently, whether it is the issue of pain management and 
opioid use or it is other elements of care that are provided.
    Senator Blumenthal. Mr. Harvey, did you want to add 
anything? And thank you for your service.
    Mr. Harvey. The only thing I would add, Senator, is you 
mentioned--and we addressed this in part of our report--that 
business of cultural competency of the health care provider 
understanding that this veteran has had a particular type of 
experience, and being sensitive to that.
    As I said, perhaps when you were out, I know the VVA has a 
little card that they suggest using, with various questions to 
ask the veteran patient to elicit some of the experience, so 
that as you are factoring this into the diagnosis and, you 
know, the analysis you are giving as a doctor, you have that as 
part of that.
    That cultural competency and understanding the military 
background is an important thing that you get through a system 
like the VA. You are not going to get it at Washington Hospital 
Center.
    Senator Blumenthal. Exactly. Thank you so much.
    Thanks, Mr. Chairman.
    Chairman Isakson. Thank you, Senator Blumenthal.
    We will have Senator Tillis, followed by Senator Boozman, 
and then we will go to panel three.

       HON. THOM TILLIS, U.S. SENATOR FROM NORTH CAROLINA

    Senator Tillis. Thank you, Mr. Chairman. Thank you all for 
being here and for your work on the Commission.
    Before I get started, I want to thank Secretary McDonald 
and his team. Mr. Chair, we had meetings last week. Secretary 
McDonald and a lot of the people that are here were in my 
office giving me an update on the transformation and the 
progress on the breakthrough priorities. I think it is great 
work and I have a lot of confidence in what they are doing.
    I have to give special thanks also to Secretary McDonald 
coming back to my office the following day to give me a report 
on the Camp Lejeune toxic substances program. I think we are 
making progress and I appreciate the continued work.
    Thank you both for being here. I am going to jump to three 
of the recommendations where I think the VA may have some 
concern. I may understand why, but--I am sorry, is it Ms. 
Schlichting?
    Ms. Schlichting. Yes.
    Senator Tillis. Good. I noticed in notes that my staff 
took--they had one note on discussion about privatization. I 
never miss an opportunity, when I see a word ``privatization'' 
ever mentioned, to mention that I do not believe that the VA 
should be completely privatized, period, end of story. I do not 
know of any U.S. Senator who feels like a full privatization is 
a good idea.
    I think that there is an opportunity for veterans to choose 
whatever--what we should do is create a system that lets a 
veteran choose whatever pathway is right and necessary to 
provide timely care, and I believe that we agree with that.
    I just say that because anytime I see ``privatization,'' 
there is somebody that is saying--there is some Senator here 
that wants to give it to the private sector. I think there is a 
therapeutic value to some VA presence, veterans being among 
high concentrations of veterans, and until I see evidence to 
the contrary I would never support it. On the other hand, I do 
think there are a lot of opportunities to use non-VA providers 
in Choice, and that is what we are getting at.
    Recommendation 4 has to do with an Engineering Resource 
Center. I used to work in management consulting. I think that 
the VA may have some concerns with this. It probably has less 
to do with the end result and more to do with the process.
    We have got a lot of Centers of Excellence that are sort of 
emerging. I visited Nashville, where there is a new ICU 
Liberation campaign. I did a surprise visit, actually--visited 
with them. They were very hospitable. I was very impressed with 
the results. It is one of two programs around the State.
    So, I think, as a management consultant, I would be less 
interested in creating other groups and organizations with 
managers and communications channels and ways to create a web 
of subject matter expertise and Centers of Excellence that we 
could leverage. That probably has less to do with the concept 
and more to do with the implementation, but I will get back 
with the Department.
    Do you have any comments on--either of you--comments on 
that particular recommendation?
    Ms. Schlichting. You know, we have heard, in terms of the 
response, that perhaps the Veterans Engineering Resource 
Center--which was the specific component of the VA that we 
recommended be the center of this performance improvement 
work--may not be the choice, which is--you know, that is not 
a--certainly not a big issue for me.
    Senator Tillis. Got you.
    Ms. Schlichting. I think the focus clearly is on how to 
drive a performance-improvement culture throughout VA----
    Senator Tillis. Absolutely.
    Ms. Schlichting [continuing]. And focus on clinical and 
business process improvement.
    Senator Tillis. Yeah, I think that is right.
    You know, in Salisbury, NC, there is a great project that 
they have done, which was Lean process design. That is in my 
State. I see an emerging number of best practices that we need 
to execute and proliferate, but in an orderly way to where we 
are not varying and suddenly creating a hairball of kind of 
good practices and best practices.
    I did want to move to--the board of directors 
recommendation is probably the one where you do not have me. 
The reason for that is I feel like that this Committee is the 
closest thing to a board of directors as we should have. If we 
add that other layer--I would be interested in your feedback 
and why you think it is different, but if we add that other 
layer, then I think we could have VA leadership that get 
monthly floggings from two different groups, potentially. I do 
not know that that is necessarily productive. I kind of enjoy 
our monthly floggings and----
    [Laughter.]
    Senator Tillis [continuing]. I would not want to share that 
with anybody.
    In all seriousness, I just think it is something that we 
should look at and maybe--I will drill down more in the 
recommendations, but I worry about--if we had that layer down, 
I think it could be another level of abstraction that could 
remove the members, particularly the Members of this Committee 
and maybe the members as a whole, from some of the details that 
are going on.
    I have invested, over the last year, a lot of time with the 
leadership in understanding the transformation, and I think the 
more we learn about it, the more we measure the week-to-week 
progress, the better off we are going to be. I would have to 
learn more in the--I have to read more into the recommendation 
to make sure that it is not putting us further away from that 
line of sight that I think is helpful. If you have any comment 
there, please share.
    I do not have any remaining time, but I will follow up on 
Recommendation 17. Let me just put it this way: on bad paper, I 
think no one--and Senator Blumenthal has been great on this 
issue--there is no doubt that there are veterans who should 
probably receive care because the nature of their separation 
was related to an injury or an event that occurred. Their 
behavior was actually driven by something that was either a 
short--maybe a temporary injury or a permanent injury that we 
just simply did not know. We have talked about it before--
shell-shocked, whatever we used to call it in the past.
    It is more a matter of the implementation and making sure 
that it does not disrupt the VA from the things that they are 
trying to get done with the people who are already in the 
system who unquestionably deserve care. So, I think we want to 
work to the same goal. It is more the means rather than the 
ends.
    Thank you, Mr. Chair.
    Chairman Isakson. Thank you, Senator Tillis.
    Senator Boozman.
    Senator Boozman. We appreciate you all very much, and 
really appreciate the ideas that you put forth. I think it is 
very, very helpful.
    Ms. Schlichting, in your testimony you talked about the 
ongoing leadership challenges facing the organization, 
including a culture of risk aversion, distrust. Separate from 
your recommendations regarding the board of directors and the 
Under Secretary's appointments process, I would like to get 
your thoughts on how VHA can get after the risk aversion and 
the distrust issues. That is really a very difficult problem.
    You might also, as you do that, comment about the--we have 
heard a lot about the senior leadership conferences and 
workshops. If you have any, you know, thoughts as to if those 
are working or not working, or if we need to change those a 
little bit or, you know, not--also, things like the Diffusion 
of Excellence. Is that getting down to the ``Shark Tank'' 
competitions? Is that getting down to the local level the way 
it should? Then again, you know, what other steps that we 
should be taking to try to improve the culture, which is so 
very important?
    Ms. Schlichting. Well, it is a very important question and 
something the Commission spent a lot of time on. I would just 
say first that I think Secretary McDonald and Under Secretary 
Shulkin are making really significant progress.
    I think the worry we have is not so much the leadership 
development work that is going on. It is having continuity at 
the top for more than a couple of years, because it is very 
hard to change culture when you do not have a consistent 
pattern of leadership at all levels, starting at the top.
    Our concern was, how do we have more stable leadership, 
have oversight with expertise? That was the reasoning behind 
the governing board, if you will, the board of directors, is to 
have health care expertise overseeing the transformation 
process with stable leadership in place. That is how culture 
begins to really happen in a positive way and people start to 
take a little bit more risk. There is a culture of safety 
around speaking up, which is critical, I think, in any 
transformation. Those were the ideas that we really tried to 
move forward in our recommendations.
    Senator Boozman. And the ``Shark Tank,'' the----
    Ms. Schlichting. Yeah, those things are great. I mean, and 
sometimes they can----
    Senator Boozman. The conferences.
    Ms. Schlichting. Right. I mean, I think they are fantastic. 
In fact, I know they are working with Professor Noel Tichy from 
the University of Michigan, who I know very well. In fact, I 
have taught in his class. He is terrific. And what Dr. Shulkin 
has done to really engage the teams I think is fantastic.
    Senator Boozman. Good.
    Mr. Harvey, you highlighted the long-term challenges the VA 
has had with IT solutions----
    Mr. Harvey. Yes, sir.
    Senator Boozman [continuing]. Particularly as it relates to 
scheduling. Can you talk a little bit about that? As you 
mentioned, we have spent, you know, many years trying to get a 
scheduling system, and spent lots of money. What is your sense 
regarding the VHA's future willingness to consider off-the-
shelf solutions? Again, how do we make progress on this front?
    Mr. Harvey. Well, let me start by saying that we met with 
the VA's Chief Information Officer, LaVerne Council, and I 
personally was very impressed. Others that I have spoken to 
within the VA, who know that part of the world, have been 
impressed by her competence, her experience. She brings a lot 
to this.
    My concern is that the VA, for reasons that are not 
entirely clear to me, seems to have just had a terrible time 
getting IT right. So, what we are now saying is you should do 
this very complex new system--commercial, off-the-shelf--that 
will do health records, that will do payment business practices 
with Choice doctors, it will do coordination with the Veterans 
Benefits Administration, and it will do scheduling. It will do 
all of these things.
    Proof of concept is something that I would like to see, 
because I really, honestly, do not think that they are--they 
would be able to do all of those things right now since, in 
fact, they have not been able to get the scheduling--just the 
scheduling, that one part--right.
    The VistA system, which is the electronic health records, 
is an old system. It was one of the newest when it came in. It 
was the best for a long time, and it has been replaced by other 
systems. Transitioning to some other system that can do these 
other things is going to be a huge jump, and you want to do it 
right because it is going to cost lots and lots of money.
    Senator Boozman. OK.
    Thank you, Mr. Chairman.
    Chairman Isakson. Thank you, Senator Boozman.
    Thanks to both of you for your testimony and for your 
months of hard work on the Commission. We are going to make 
sure this is not a dust-gatherer on a shelf, but as a thought-
provoker that results in the perfection we need to bring to the 
VA. We appreciate your service very much.
    Ms. Schlichting. Thank you.
    Mr. Harvey. Thank you very much, Mr. Chairman. Thank you, 
Members of the Committee.
Response to Posthearing Questions Submitted by Hon. Mazie K. Hirono to 
            Ms. Nancy Schlichting, Chair, Commission on Care
    Ms. Schlichting, in the Commission's final report (p. 243), it 
states that a key source for the Commission was the views of veterans 
themselves, although the Commission did not conduct its own survey for 
this report and instead relied on those conducted previously by VSOs 
and comments through the Commission website.

    Question 1.  Can you explain why the Commission believed the 
previous surveys and website comments were sufficient to capture the 
views of veterans, and explain whether and how their views are 
representative of all veterans?
    Response. We would have liked to have had more veteran input for 
the Commission's work, but the time necessary and required process for 
conducting a survey of all veterans made it impossible to complete in 
the timeframe we had for the Commission. We used what we had available, 
which included VSO surveys, website comments, and veteran testimony.

    Question 2.  Relatedly, did the Commission consider conducting its 
own surveys to capture the views of veterans? If the Committee had 
conducted these surveys, then how do you think it would have influenced 
the Commission's final recommendations?
    Response. We did consider this, but had to reject it for the 
reasons stated above. I can't speculate on how it may have changed our 
recommendations. However, our recommendations were based on the 
information provided by the Independent Assessment, expert input from 
the Commissioners, and more than 100 hours of testimony by all key 
stakeholders, including veterans, VHA employees, VHA physicians, VA 
leaders, Congressional leaders, healthcare experts, and VSO leaders, 
and others.

    Chairman Isakson. We will immediately welcome our third 
panel, our VSOs, and look forward to hearing from all of them. 
As our witnesses prepare to testify, let me make an 
observation, if I can.
    On behalf of all the Members of the Committee, and on 
behalf of the staff of the Committee, I want to tell the VSOs 
how invaluable your help and support has been over the last 2 
years and in the work leading up to Veterans First being 
developed. We have never had a situation where the VSOs were 
not ready to come forward with constructive suggestions, and we 
appreciate your input very much.
    Sometimes when you are third on the panel you might think 
you are an afterthought, but you are not an afterthought. Many 
of the things we develop here come directly from the testimony 
that you bring forward. Many of the things we learn that we 
should have done differently, we learn from you when you 
correct us. So, we want to thank all of you for being here and 
we look forward to your testimony.
    We will hear from the following individuals:
    Mr. Jeff Steele, The American Legion; Joy Ilem, the 
Disabled American Veterans--and, Joy, we were delighted to have 
you all in Atlanta, GA, for your annual convention about 3 
weeks ago. The Secretary and I both enjoyed being there, and 
the President was there as well. It was good attendance on the 
government's part anyway. [Laughter.]
    Lauren Augustine, the Iraq and Afghanistan Veterans of 
America; CDR Rene Campos, the Military Officers Association of 
America; Mr. Carlos Fuentes, Veterans of Foreign Wars; and Mr. 
Richard Weidman, Vietnam Veterans of America.
    We welcome all of you to be here, and we will start with 
Mr. Steele. Is that right that you are Mr. Steele? You are 
recognized for up to 5 minutes.

   STATEMENT OF JEFF STEELE, ASSISTANT DIRECTOR, LEGISLATIVE 
                 DIVISION, THE AMERICAN LEGION

    Mr. Steele. Chairman Isakson, Ranking Member Blumenthal, 
and distinguished Members of the Committee, on behalf of our 
National Commander, Charles E. Schmidt, and over 2 million 
members of The American Legion, we thank you and your 
colleagues for conducing this hearing today.
    Generally, The American Legion is an agreement with many of 
the Commission's recommendations. However, the report contains, 
at its heart, a fundamental flaw which must be recognized and 
addressed.
    Of the three Commissioners who refused to sign the final 
report, The American Legion is most closely aligned with 
Commissioner Blecker, who stated in his dissent that, ``the 
adoption of this proposal would threaten the survival of our 
Nation's veteran-centered health care system as a choice for 
the millions of veterans who rely on it,'' a sentiment we have 
heard today.
    The American Legion believes in a strong, robust veterans 
health care system that is designed to treat the unique needs 
of those men and women who have served their country. We also 
recognize that, even in the best of circumstances, there are 
situations where the system cannot keep up with the health care 
needs of the growing veteran population requiring VA services; 
therefore, veterans must seek care in the community.
    Thus, we support the creation of fully-integrated health 
care networks, with the VA maintaining responsibility for the 
care coordination. These networks must be developed and 
structured in a way that preserves VA's capacity. Without a 
critical mass of patients, VA cannot sustain the very 
infrastructure that supports and makes VA specialized services 
world class. Providing veterans unfettered choice as to their 
provider jeopardizes this critical mass.
    The American Legion also opposes allowing a complete option 
of primary care providers within the proposed VHA care system, 
because we believe the Commission's analysis is faulty. The 
Commission supports this recommendation based on a 
Congressional Budget Office (CBO) estimate that was calculated 
using Medicare rates. The Commission, however, gave no 
consideration to how Medicare rules would apply to the current 
quality of care provided to veterans through VHA primary care 
physicians.
    VHA physicians are not restricted as to the amount of time 
they are able to dedicate to each patient or the number of 
presentations per patient. Medicare, on the other hand, only 
provides payment based on 10- or 15-minute consultations, which 
would deny veterans the full complement and quality of care 
they are entitled to through their earned benefits. If scored 
by CBO properly, the cost of this recommendation would be at 
least triple, if not more, and is thus financially 
unsustainable.
    A better proposal is found in VA's plan to consolidate 
community care programs. The American Legion supports allowing 
VA setting up tiered networks. As we understand it, this 
structure would empower veterans to make informed choices, 
provide access to the highest possible quality care by 
identifying the best performing providers in the community and 
enabling better coordination of care for better outcomes. It 
rests on the principle of using community resources to 
supplement service gaps and better align VA resources, and we 
believe it has the potential to improve and expand veterans' 
access to health care.
    However, as the VA begins to involve more community 
providers, the issue of how medical malpractice claims are 
handled becomes increasingly important. As it stands now, if a 
veteran is injured by a VA doctor, they can file what is called 
an 1151 claim. One, it will either begin or increase their 
level of service-connected disability and the injury would be 
covered by VA for the veteran's lifetime. No such protection 
exists for contracted care. It is essential to ensure that the 
current processes under 38 U.S.C. 1151 treats malpractice 
claims the same regardless of where they receive their care.
    Finally, we recognize that the cost for these reforms 
remain a significant concern. The plan was presented to 
Congress in late 2015 and was well-received on both sides of 
the aisle. But, some Members of Congress balked at the costs. 
Ultimately, we strongly believe that this is a cost that must 
be met for VA to meet the needs of our veterans.
    Mr. Chairman, I cannot conclude without remarking on the 
broken appeals process. Modernizing VA's archaic appeals 
process is of the utmost priority and The American Legion's 
number-one priority.
    The House is voting today on Chairman Miller's reform bill. 
Senator Blumenthal has just come from a press conference where 
he introduced his reform bill. Senator Rubio also has a bill. 
There is wide bipartisan and bicameral consensus that the 
status quo is simply unacceptable and must be reformed. Mr. 
Chairman, we have worked with you personally and with the 
Committee. What are we going to do to get this done?
    With that, I am happy to answer any questions the Committee 
may have.
    [The prepared statement of Mr. Steele follows:]
    Prepared Statement of Jeff Steele, Assistant Director, National 
               Legislative Division, The American Legion
    Chairman Isakson, Ranking Member Blumenthal and distinguished 
Members of the Committee, On behalf of National Commander Charles E. 
Schmidt and The American Legion; the country's largest patriotic 
wartime service organization for veterans, comprising over 2 million 
members and serving every man and woman who has worn the uniform for 
this country; we thank you for the opportunity to comment regarding The 
American Legion's position on the Commission on Care and the future of 
the VA healthcare system.
    The American Legion has worked extensively on matters concerning 
veterans for nearly 100 years. Our work includes all business lines 
managed and operated by The Department of Veterans Affairs (VA) through 
sustained physical involvement, review of national policy, and 
donations of resources, funding, personnel, and experience.
    It is with the voice and support of the largest voting block of 
veterans in the country that The American Legion presents the following 
analysis and recommendations regarding the report offered by the 
Commission on Care dated June 30, 2016.
    The American Legion acknowledges the Commission relied heavily on 
the Independent Assessment as per congressional instructions, as well 
as some limited testimony from VA, Veteran Service Organizations (VSO), 
and media reports; but the primary foundation for discussion and 
findings were based on internal discussions among commissioners based 
on individual filters, experiences, and loyalties; and thus this report 
is reflective of those individual opinions.
    The American Legion will not address the entire report, rather we 
will highlight the parts we believe have merit for further study or 
implementation, and those areas where we believe implementation would 
be detrimental to all veterans seeking healthcare from the VA, whether 
directly, or through a managed community relationship.
    We are in general agreement with most of the Commission's 
recommendations and are pleased to see they are in line with 
transformation currently underway at VA through the MyVA initiative.
    As you know, three of 15 Commission members did not sign the final 
report, with two commissioners opposing the final report because they 
felt it didn't go far enough. Commissioner Michael Blecker also did not 
sign, saying the main recommendation, for the Veterans Health 
Administration (VHA) Care System, went too far.
    The American Legion's positioning on the report places us closer to 
Commissioner Blecker's. As he explained in his June 29 dissent:

          I cannot agree to the Commission's first and most significant 
        recommendation, establishment of a proposed ``VHA Care 
        System.'' Given the design of this proposed new delivery model, 
        the adoption of this proposal would threaten the survival of 
        our Nation's veteran-centered health care system as a choice 
        for the millions of veterans who rely on it. Although this is 
        only one of many recommendations in the Report, this single 
        recommendation risks undermining rather than strengthening our 
        veteran-centered health care system, and I cannot agree to 
        it.\1\
---------------------------------------------------------------------------
    \1\ http://www.prweb.com/releases/2016/07/prweb13535231.htm

    We also believe that recommendations of more privatization that 
some are trying to mask as ``Choice'' fail to take into consideration 
that veterans already have a myriad of choices, more so than most 
Americans. Choosing to see a contracted primary care physician as 
opposed to a VA primary care physician is a choice most veterans using 
VA health care already have through their private insurance, TRICARE, 
Medicare, Medicaid or several other options. These ``choices'' also 
come with additional expenses to the veteran. Converting VA health care 
to an insurance payer would increase out-of-pocket expenses for 
veterans who rely solely on VA for all of their health care needs, and 
who may not have alternate insurance options.
    That said, here are our initial comments on a few of the most 
important recommendations:
Recommendation #1: Across the United States, with local input and 
        knowledge, VHA should establish high-performing, integrated 
        community health care networks, to be known as the VHA Care 
        System, from which veterans will access high-quality health 
        care services.
    This recommendation includes several sub-recommendations. Here we 
will address two of the most salient ones separately because they each 
have separate and distinct implications and will require individualized 
policy and/or legislative modifications in order to accomplish. The 
overarching theme of this recommendation involves a robust and 
integrated community care network.

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

          The American Legion believes in a strong, robust veterans' 
        healthcare system that is designed to treat the unique needs of 
        those men and women who have served their country. However, 
        even in the best of circumstances there are situations where 
        the system cannot keep up with the health care needs of the 
        growing veteran population requiring VA services, and the 
        veteran must seek care in the community. Rather than treating 
        this situation as an afterthought, an add-on to the existing 
        system, The American Legion has called for the Department of 
        Veterans Affairs (VA) to ``develop a well-defined and 
        consistent non-VA care coordination program, policy and 
        procedure that includes a patient centered care strategy which 
        takes veterans' unique medical injuries and illnesses as well 
        as their travel and distance into account.\2\
---------------------------------------------------------------------------
    \2\ Resolution No. 46: (Oct 2012): Department of Veterans Affairs 
(VA) Non-VA Care Programs

    Over the years, VA has implemented a number of non-VA care programs 
to manage veterans' health care when such care is not available at a VA 
facility, could not be provided in a timely manner, or is more cost 
effective through contracting vehicles. Programs such as Fee-Basis, 
Project Access Received Closer to Home (ARCH), Patient-Centered 
Community Care (PC3), and the Veterans Choice Program (VCP) were 
enacted by Congress to ensure eligible veterans could be referred 
outside the VA for needed, and timely, health care services.
    Congress created the VCP after learning in 2014 that VA facilities 
were falsifying appointment logs to disguise delays in patient care. 
However, it quickly became apparent that layering yet another program 
on top of the numerous existing non-VA care programs, each with their 
own unique set of requirements, resulted in a complex and confusing 
landscape for veterans and community providers, as well as the VA 
employees that serve and support them.
    Therefore, Congress passed the Surface Transportation and Veterans 
Health Care Choice Improvement Act of 2015 (VA Budget and Choice 
Improvement Act) in July 2015 after VA sought the opportunity to 
consolidate its multiple care in the community authorities and 
programs. This legislation required VA to develop a plan to consolidate 
existing community care programs.
    On October 30, 2015, VA delivered to Congress the department's Plan 
to Consolidate Community Care Programs, its vision for the future 
outlining improvements for how VA will deliver health care to veterans. 
The plan seeks to consolidate and streamline existing community care 
programs into an integrated care delivery system and enhance the way VA 
partners with other Federal health care providers, academic affiliates 
and community providers. It promises to simplify community care and 
gives more veterans access to the best care anywhere through a high 
performing network that keeps veterans at the center of care.
    Generally, The American Legion supports the plan to consolidate 
VA's multiple and disparate purchased care programs into one New 
Veterans Choice Program (New VCP). We believe it has the potential to 
improve and expand veterans' access to health care.
            Network Structure
    The American Legion supports allowing VA to set up tiered networks. 
As we understand it, this structure is meant to empower veterans to 
make informed choices, provide access to the highest possible quality 
care by identifying the best performing providers in the community, and 
enabling better coordination of care for better outcomes. However, it 
does not dictate how veterans will use the network. The American Legion 
wants to make clear, though, that we do not support a wholesale option 
to circumvent the VA infrastructure or healthcare system entirely.
            Prompt Pay
    We support a provision mandating that all claims be made 
electronically by January 1, 2019 and an eligible provider should 
submit claims to Secretary within 180 days of furnishing care or 
services.
            Episode of Care
    Provisions ensuring that an eligible veteran receives such care and 
services through the completion of the episode of care, including all 
specialty and ancillary services deemed necessary as part of the 
treatment recommended in the course of such care and services.
            Emergency/Urgent Treatment
    The American Legion supports requiring VA to reimburse veterans for 
the reasonable value of emergency treatment or urgent care furnished in 
a non-Department facility in a final bill.
            Conclusion
    Ensuring veterans have access to appropriate, timely, high-quality 
care is critical. VA needs to overhaul its outside care reimbursement 
programs, consolidating them into a more efficient bureaucracy able to 
dynamically interact with the network of Federal, public, and private 
providers that are to supplement VA direct provided care.\3\
---------------------------------------------------------------------------
    \3\ http://www.legion.org/legislative/testimony/231623/pending-
veterans-affairs-legislation

---------------------------------------------------------------------------
B.  Choice of primary care provider

    The American Legion opposes allowing a complete option of primary 
care providers within the proposed VHA Care System based on the 
Commission's faulty analysis. The Commission supports this 
recommendation based on a Congressional Budget Office (CBO) estimate of 
cost that was calculated using Medicare rates. The Commission, however, 
gave no consideration to Medicare rules for billing structure and how 
those rules would apply to the current quality of care provided to 
veterans through VHA primary care physicians. VHA physicians are not 
restricted as to the amount of time they are able dedicate to each 
patient, or the number of presentations per patient. Medicare, on the 
other hand only provides payment based on a 10 or 15 minute 
consultation, which then denies veterans the full complement and 
quality of care they are entitled to through their earned benefits. If 
scored by CBO properly, the cost of this recommendation would be at 
least triple if not more, and is thus financially unsustainable. The 
American Legion finds the recommendation and subsequent analysis by the 
Commission to be in error and believe that it should not be considered 
by the Administration.
Recommendation #9: Establish a board of directors to provide overall 
        VHA Care System governance, set long-term strategy, and direct 
        and oversee the transformation process.
    The American Legion does not support the creation of a governing 
board. We do find value in the Commission's discussion and 
recommendations that point out inconsistent leadership due to rotating 
political appointments and a leadership vision with a lack of 
continuity. The American Legion supports appointing a Veterans Health 
Administration (VHA) leader for a minimum of a 5 year term, with an 
option for an additional 5 year reappointment. We could also support 
the same consistency for the Deputy Secretary position.
    Congress is also part of the problem here. When Representative Beto 
O'Rourke addressed the Commission on Care on March 22nd of this year, 
he noted that part of the problem with VA has been a severe lack of 
continuity in oversight due to an unwillingness of Members to serve on 
the VA committees: it's not glamorous, there are real problems to be 
addressed, and there are no ``mission accomplished'' banners. Members 
tend to leave the Committee as soon as they are able--to the point 
that, on day one as a new congressman assigned to the Committee, he 
found himself third in seniority on the Democratic side.
    The American Legion thinks consideration should also be given to 
proposals that the Secretary of Veterans Affairs develop and submit to 
Congress a Future-Years Veterans Program and a quadrennial veteran's 
review.\4\
---------------------------------------------------------------------------
    \4\ https://www.Congress.gov/bill/114th-congress/house-bill/216
---------------------------------------------------------------------------
Recommendation #15: Create a simple-to-administer alternative personnel 
        system, in law and regulation, which governs all VHA employees, 
        applies best practices from the private sector to human capital 
        management, and supports pay and benefits that are competitive 
        with the private sector.
    This proposal to shift all 300,000 VHA employees away from Title 
Five and onto Title 38 to provide the department with more flexibility 
in pay, benefits and recruiting is worth serious consideration. While 
the change would be designed to ease hiring and firing at the agency, 
the report says the new system should maintain due process appeal 
rights and merit system principles and we concur.
Recommendation #18: Establish an expert body to develop recommendations 
        for VA care eligibility and benefit design.
    Included in this recommendation is consideration of the feasibility 
of allowing veterans' family members and currently ineligible veterans 
to purchase VHA care through their health plans in areas where VHA 
hospitals and other facilities might otherwise need to close. In many 
parts of the country, VHA currently maintains hospitals and other 
health care facilities that are underutilized or in danger of becoming 
so. A related challenge is maintaining safe volume of care when patient 
loads decline.
    As the report notes, ``closing a low-volume hospital may be the 
answer in some instances. But closing VHA facilities reduces the 
choices available to veterans. Increasing the volume of patients 
treated by VHA in areas where it currently has excess capacity may 
ameliorate these challenges.''
    Appendix C of the report discusses the outline of developing pilot 
programs to test the feasibility of avoiding VA hospital closures by 
allowing veterans' spouses and currently ineligible veterans to 
purchase VA care in selected areas. The American Legion supports 
further investigation of this proposal.
    The American Legion appreciates the hard work from all of the 
commission members and we look forward to working with this 
administration and the incoming Congress and administration to ensure 
veterans are provided with the high level of expert health care that 
they have earned.
    Secretary McDonald's words on the report serve as a worthy stopping 
point for now: ``However, until all veterans say they are satisfied, I 
won't be satisfied. Nobody at VA will be satisfied, but our progress so 
far proves that VA's current leadership, direction and momentum can 
produce the necessary transformation.''
                               conclusion
    As always, The American Legion thanks this Committee for the 
opportunity to explain the position of the over 2 million veteran 
members of this organization. For additional information regarding this 
testimony, please contact Mr. Warren J. Goldstein at The American 
Legion's Legislative Division.

    Chairman Isakson. Ms. Ilem.

   STATEMENT OF JOY J. ILEM, NATIONAL LEGISLATIVE DIRECTOR, 
                   DISABLED AMERICAN VETERANS

    Ms. Ilem. Thank you, Mr. Chairman, Members of the 
Committee.
    Since the waiting-list scandal and access crisis of 2014, a 
vigorous debate has taken place about how to best provide 
timely, high-quality, comprehensive, and veteran-focused health 
care to our Nation's veterans.
    Over the past year, there have been dozens of congressional 
hearings, numerous investigations, stakeholder engagement, 
enactment of the Choice Act, a comprehensive independent 
assessment and, finally, the report from the Commission on 
Care. All of these efforts were undertaken with the goal of 
getting to the root of the crisis and transforming the VA so it 
can better serve our Nation's veterans.
    The Commission examined a wide range of ideas, including 
proposals to privatize and dismantle the VA health care system, 
but ultimately rejected such radical ideas, instead reaching a 
strong consensus on a comprehensive set of recommendations for 
the long-term transformation of VA. DAV supports the 
Commission's recommendations, as detailed in my written report, 
but I will focus on a few in my oral remarks that we have 
concerns with.
    We support the Commission's first recommendation calling 
for the establishment of high-performing, integrated, 
community-based health care networks, with the VA acting as the 
coordinator of care. VA and the independent-budget VSOs and the 
VSO community--many in the VSO community put forth similar 
plans for integrating community care into VA.
    The Commission plan, however, does differ in one crucial 
aspect, specifically--as mentioned previously--how it would 
manage the provision of care among VA and non-VA network 
providers. In order to reach consensus, the Commission 
recommended a compromise option to let veterans chose non-VA 
doctors within an established network, even in the cases were 
VA would have timely access and conveniently located options to 
meet their needs.
    This open-choice option would significantly increase costs, 
lessen care coordination and quality, and shift resources out 
of VA, likely resulting in the downsizing of the health care 
system. The problem is that if choice is elevated as the most 
important principle, you are likely to end up with two parallel 
systems and veterans will have to choose between--rather than 
an integrated system that is more likely to provide high-
quality care and be responsive to veterans' individual needs.
    The Commission's economist estimated the open-choice option 
would increase VA spending between $5 billion and $35 billion 
annually. Likewise, they noted that there was no clear 
evaluation of the potential impact that this choice option 
would have on VA's role as a whole, its ability to deliver 
comprehensive care and specialized services, or the impact on 
VA's research, education, and other critical missions.
    Additionally, this option, according to the Commission, 
could shift an estimated 40 percent of the medical care 
currently provided by VA into the private sector. This 
reduction in work volume would undoubtedly force VA to cut 
services and close facilities, thereby depriving many veterans, 
particularly disabled veterans, of the choice to use VA for all 
or most of their care.
    In order to ensure reliable access as well as high-quality 
and coordinated care for all enrolled veterans, VA must have 
the resources to address the many deficiencies identified in 
the independent assessment, including modernization of VA's IT 
and infrastructure needs, as well as the flexibility to 
organize and manage the networks and the care provided.
    We also have concern about the recommendations to establish 
a board of directors to govern the veterans health care system. 
While we support greater continuity of VA leadership to 
facilitate better long-range planning, creating a separate and 
independent governing board for VHA would hinder the ability of 
the Secretary to coordinate interrelated health care services 
and benefits programs. Instead, we recommend VA adopt a 
Quadrennial Review process for improved long-term planning and 
budgeting purposes, similar to that used by the Departments of 
Defense and Homeland Security.
    In closing, DAV concurs with the majority of proposals put 
forth in the Commission on Care report and we greatly 
appreciate the efforts of the Commissioners to find workable 
solutions to complex problems. We are also pleased that a 
number of recommendations are already underway, as noted by 
VA's Secretary in the MyVA initiative.
    After 2 years of intense discussion and debate, there is a 
clear path forward and it is now time to take action and start 
working toward creating a health care system our veterans need 
and deserve for the future.
    Thank you, Mr. Chairman. That completes my statement.
    [The prepared statement of Ms. Ilem follows:]
   Prepared Statement of Joy J. Ilem, National Legislative Director, 
                       Disabled American Veterans
    Chairman Isakson, Ranking Member Blumenthal, and Members of the 
Committee: Thank you for inviting DAV (Disabled American Veterans) to 
testify on the report and recommendations of the Commission on Care 
focused on improving veterans health care over the next twenty years. 
As you know, DAV is a non-profit veterans service organization 
comprised of 1.3 million wartime service-disabled veterans that is 
dedicated to a single purpose: empowering veterans to lead high-quality 
lives with respect and dignity. Virtually all of our members rely on 
the Department of Veterans Affairs (VA) health care system for some or 
all of their health care, particularly for specialized treatment 
related to injuries and illnesses they incurred in service to the 
Nation.
    Since the waiting list scandal and access crisis were uncovered by 
Congress and the national media in the spring of 2014, a vigorous 
debate has taken place about how best to provide timely, high-quality, 
comprehensive and veteran-focused health care to our Nation's veterans. 
There have been dozens of Congressional hearings, multiple internal 
reviews, numerous media investigations, enactment of temporary programs 
and laws, expert stakeholder input, an independent assessment, and 
recently a comprehensive report with recommendations from the 
Commission on Care. Yet despite having diverse perspectives, virtually 
all of the major stakeholders have coalesced around a common solution: 
creating an integrated network of VA and community providers, with VA 
serving as the coordinator and primary provider of care. This 
transformative approach has been endorsed by DAV, the Independent 
Budget veterans service organizations (IBVSOs) (DAV, the Veterans of 
Foreign Wars, and Paralyzed Veterans of America), VA Secretary 
McDonald, key Congressional leaders and the Congressionally-mandated 
Commission on Care.
    Mr. Chairman, with millions of America's veterans continuing to 
choose and rely on VA, and increasing numbers seeking care every day, 
it's time to move from debating VA's past problems and start taking 
actions to create the future VA health care system America's veterans 
deserve. With the current veterans' ``choice'' program expected to 
expire early next year, Congress must now decide whether to extend, 
expand or modify the current program or move beyond the ``choice'' 
paradigm by creating a new model of health care delivery based upon an 
integrated network of VA and community providers capable of providing 
care to veterans whenever and wherever needed.
    As this Committee is well aware, the Veterans Access, Choice, and 
Accountability Act (Public Law 113-146) was enacted in August 2014 in 
direct response to the access crisis and waiting list scandal at the 
Phoenix, Arizona VA Medical Center and other locations around the VA 
system. The primary purpose of the Choice Act was to address veterans' 
access barriers by creating a new temporary choice program that allowed 
certain veterans to choose community care if they would otherwise be 
forced to wait more than 30 days for requested care, or travel more 
than 40 miles to a VA facility to receive requested care. The act also 
required an outside, independent assessment of the VA health care 
system, and it established the Commission on Care to study and develop 
recommendations for VA to improve the delivery of health care to 
veterans on a longer term basis.
    Since its inception two years ago, the choice program has been 
beset with problems, some caused by the design of the law and others 
due to the urgent implementation schedule mandated by Congress. As the 
number of veterans using the choice program has risen, so have the 
number of problems they have encountered related to timely access, care 
coordination, appointment scheduling and provider payments. Although 
DAV and other VSOs supported passage of the choice program as an 
emergency response to the access crisis, it was neither intended to be 
nor supported as a permanent centerpiece of VA's health care delivery 
model. To address technical and implementation challenges with the 
choice program, Congress enacted two subsequent acts (Public Laws 113-
175 and 114-41) but has not made any further legislative changes while 
awaiting the Commission on Care's final report.
    The Independent Assessment mandated by Public Law 113-146, 
conducted primarily by the MITRE and Rand Corporations, produced 
voluminous data, information and recommendations about improving health 
care to veterans. The first and most important finding of the 
assessment was that the root cause of VA's access problems was a `` . . 
. misalignment of demand with available resources both overall and 
locally . . . '' leading to the conclusion that `` . . . increases in 
both resources and the productivity of resources will be necessary to 
meet increases in demand for health care . . . '' in the future.\1\ 
Further, despite these deficits, the assessment confirmed what DAV, 
other VSOs and dozens of independent studies have reported over the 
past two decades: VA quality of care, on average, is as good as or 
better than, care in the private sector.
---------------------------------------------------------------------------
    \1\ Independent Assessment of the Health Care Delivery Systems and 
Management Processes of the Department of Veterans Affairs, The MITRE 
Corporation, September 1, 2015, p. B-3.
---------------------------------------------------------------------------
    Last year, as mandated by Public Law 114-41, VA developed and 
submitted a plan to Congress to consolidate non-VA community care 
programs, including the choice program. VA's plan would create a high-
performing network comprised of both VA and certified community 
providers. Although VA has already begun taking steps to move forward 
with a consolidation plan, VA is awaiting Congress to enact enabling 
legislation to facilitate the new consolidated program that would bring 
VA's plan to fruition.
    Furthermore, the IBVSOs developed a joint Framework for Veterans 
Health Care Reform that proposed a similar concept of local veteran-
focused integrated health care networks. Notably, both the IB framework 
and the VA plan call for VA to remain the coordinator and primary 
provider of care, with community providers integrated when needed to 
guarantee veterans timely access to care. This integrated network 
approach has been publicly supported by dozens of other veterans and 
related organizations, reflecting the views and sentiments of millions 
of veterans they, and DAV, represent.
    The Commission on Care spent almost a year reviewing the 
Independent Assessment, hearing from stakeholders and other outside 
experts, and developing its recommendations to improve health care for 
veterans. While the Commission considered a wide range of ideas and 
options, including proposals to privatize VA, and one plan (the 
``strawman proposal'') that called for dismantling the VA health care 
system over the next two decades. Ultimately, the Commission rejected 
the radical ideas, instead reaching a consensus on recommendations that 
hold many similarities to the plans put forward by VA and mainstream 
veterans organizations. The first and foremost Commission 
recommendation calls for establishment of ``high-performing, integrated 
community-based health care networks'' with VA acting as the 
coordinator and primary provider of care. Although some important 
differences are apparent among the integrated network plan proposed by 
the Commission, the IBVSOs and VA, respectively, call for strengthening 
the existing VA health care system by incorporating community providers 
into integrated networks. Moreover, each proposal maintains VA as the 
coordinator and primary provider of care, and each views the use of 
community providers and choice as a limited means to expand access in 
circumstances in which VA is unable to meet local demand for care.
    After two years of spirited and passionate debate about the future 
of veterans health care, we envision a clear path forward that builds 
on the strengths of the existing VA system, while expanding access by 
seamlessly integrating the best of community care to ensure no veteran 
must travel too far or wait too long for care. Congress and VA must now 
begin the steps to finalize plans and move forward with the evolution 
of veterans health care. Equally important, both Congress and the next 
Administration must make a commitment to ensure that the resources 
necessary are provided to complete this transformation.
    While we agree with most of the Commission's recommendations to 
strengthen the leadership, management and operation of the VA health 
care system, some remain of concern to us, and are explained below.
Recommendation #1: Across the United States, with local input and 
        knowledge, VHA should establish high-performing, integrated 
        community-based health care networks, to be known as the VHA 
        Care System, from which veterans will access high-quality 
        health care services.
    Based on National Resolution No. 238 calling for reform of VA 
health care, adopted by delegates to our most recent National 
Convention, DAV supports the overall structure and intent of this 
recommendation to create an integrated care network model. However, DAV 
does not support the Commission's recommended option to allow veterans 
to choose any primary or specialty care provider in the network even 
when VA is able to provide the requested care. This open choice option 
would result in less coordinated care, worse health outcomes, lower the 
overall quality of care and result in significantly higher costs that 
could ultimately endanger the overall VA system of care that millions 
of veterans rely on, particularly veterans who were injured or made ill 
during military service.
    As the Commission report states, ``veterans who receive health care 
exclusively through VHA generally receive well-coordinated care . . . 
[whereas] . . . fragmentation often results in lower quality, threatens 
patient safety, and shifts cost among payers.'' \2\ While veterans' 
individual circumstances and personal preferences must be taken into 
consideration, decisions about access must first and foremost be based 
on clinical consideration, rather than on arbitrary distances or 
waiting times. However, in order to ensure consistently reliable access 
as well as high quality care for enrolled veterans, VA must retain the 
ability to coordinate and manage the networks. As the Commission's 
report states, ``Well-managed, narrow networks can maximize clinical 
quality . . . '' and, ``Achieving high quality and cost effectiveness 
may constrain consumer choice.'' \3\
---------------------------------------------------------------------------
    \2\ Commission on Care Final Report, June 30, 2016, p. 28.
    \3\ Commission on Care Final Report, June 30, 2016, p. 29.
---------------------------------------------------------------------------
    Furthermore, the Commission's recommended option to allow every 
individual veteran to determine which VA or non-VA providers in the 
network they would use could affect access for other veterans and would 
lead to increased costs. The Commission itself recognizes the 
likelihood of higher costs for networks under their recommended option, 
cautioning that, VA `` . . . must make critical tradeoffs regarding 
their size and scope. For example, establishing broad networks would 
expand veterans' choice, yet would also consume far more financial 
resources . . . '' \4\ In fact, the Commission's economists estimate 
that the recommended option could increase VA spending by at least $5 
billion in the first full year, and that it could be as high as $35 
billion per year without strong management control of the network. The 
Commission also considered a more expanded choice option to allow 
veterans the ability to choose any VA or non-VA provider without 
requiring them to be part of the VA network. Economists estimated such 
a plan could cost up to $2 trillion more than baseline projections over 
just the first ten years.
---------------------------------------------------------------------------
    \4\ Ibid.
---------------------------------------------------------------------------
    While we agree that the VA health care system must evolve by 
integrating community providers into its networks, VA must retain the 
ability to coordinate care and manage workload within the networks. In 
general, the networks must have the ability to expand to include 
community providers if veterans face access challenges or VA is unable 
to provide sufficiently high quality care. However, the size, scope and 
design of local networks, as well as clinical workflow, must be 
directed by VA based on a demand-capacity analysis in each market in 
order to assure quality and adequate access to care.
    DAV is particularly concerned about the Commission's projection 
that more than 40% of the medical care currently provided inside VA 
facilities could shift to non-VA network providers if this recommended 
option is implemented.\5\ (Note that the ``40% estimate is derived from 
the Commission's estimate that 60% of the 68% of care that is eligible 
for community care under the recommended option would shift.) If such a 
large transfer of patient care workload from VA facilities took place, 
it would have a dramatic impact on VA's ability to maintain a critical 
mass of patients necessary to safely and efficiently operate its 
current programs and facilities. An outflow of workload of this 
magnitude would undoubtedly lead to a number of facilities cutting 
services or closing, thereby depriving veterans of the option to 
receive all or even any of their care from VA providers in certain 
locations. Such downsizing or elimination of VA as an option would be 
particularly devastating for severely injured, ill and disabled 
veterans who rely on VA for comprehensive, integrated and specialized 
care.
---------------------------------------------------------------------------
    \5\ Ibid, p. 31.
---------------------------------------------------------------------------
    Furthermore, we are alarmed that the Commission report specifically 
states that no consideration was given to whether its recommended 
option would weaken or diminish VA's medical and prosthetic research, 
academic, and national emergency preparedness missions, which continue 
to be vital aspects of the VA health care system overall. In 
particular, the VA research program helps to ensure that veterans 
receive the most current, safest and most effective treatments 
available for service-related conditions, and help to advance the 
standard of health care both within VA and beyond. The report also 
explicitly states that the Commission did not consider whether a 
sufficient number of private providers would be willing to take on 
additional patient loads from VA at Medicare reimbursement rates, how 
such a shift from VA to private providers would affect underserved 
communities, or how reduced patient workload within VA facilities would 
affect the quality of care of veterans remaining in the VA system.\6\
---------------------------------------------------------------------------
    \6\ Commission on Care Final Report, June 30, 2016, pp. 32-33.
---------------------------------------------------------------------------
    In addition to these concerns, it is critical to emphasize that the 
creation of seamless integrated community networks cannot be 
accomplished quickly or without a significant infusion of new resources 
to develop and deploy a modern Information Technology (IT) and 
management infrastructure necessary to successfully operate the 
networks, particularly to achieve seamless scheduling, care 
coordination and provider payment functions. DAV and our IB partners 
have repeatedly documented the shortfall in appropriations for medical 
care, appropriate staffing levels, infrastructure, IT, and other 
critical elements of VA's health care programs over the past decade, 
all of which helped to precipitate the access crisis. Now that there is 
a consensus about how to move forward to reform, strengthen and sustain 
the VA health care system, it is imperative that Congress take decisive 
action to ensure that sufficient funding to accomplish this new mission 
be provided.
    We agree with the Commission that networks should be, `` . . . 
built out in a well-planned, phased approach . . . '' \7\ in order to 
ensure that the potential secondary impacts discussed above are avoided 
or reasonably mitigated. Furthermore, it is imperative that before and 
during the development of these networks, VA should regularly consult 
and collaborate with local and national veterans organizations and 
leaders, as well as other key stakeholders and community partners to 
gauge progress and properly address legitimate concerns.
---------------------------------------------------------------------------
    \7\ Ibid, p. 4.
---------------------------------------------------------------------------
Recommendation #6: Develop and implement a robust strategy for meeting 
        and managing VHA's facility and capital-asset needs.
    DAV agrees with the recommendation to streamline and strengthen 
VA's facility and capital asset program management and operations. We 
also agree with the recommendation to give VA greater budgetary 
flexibility to meet its facility and capital asset needs, particularly 
overcoming Congressional budget scoring rules that have complicated 
VA's ability to open new leased clinic space. We also agree that VA 
needs to have the ability to realign its health care resources to 
address changes in the veteran population, demographics, location and 
health care needs, as well as evolving health science and technology. 
However, we do not agree that it is necessary or advisable to create an 
inflexible process, similar to the BRAC process, which has been 
employed to close military bases. The development of integrated 
community networks must be based on dynamic demand and capacity 
analysis, which would include modeling of the need to expand, contract, 
or relocate VA facilities. Local stakeholder input would be essential 
to ensure that local health care coverage would not be negatively 
affected by any facility realignment. DAV and our IB partners also 
believe that expanded usage of public-private partnerships should be 
explored as another way to address VA's infrastructure needs.
    However, even with these reforms, significant increases in 
infrastructure funding will be necessary to address VA's access 
challenges. The Independent Assessment mandated by the Choice Act, 
found that the, `` . . . capital requirement for VHA to maintain 
facilities and meet projected growth needs over the next decade is two 
to three times higher than anticipated funding levels, and the gap 
between capital need and resources could continue to widen.'' \8\ 
Without change, the estimated gap will be between $26 and $36 billion 
over the next decade. For Fiscal Year (FY) 2017, DAV and our IB 
partners recommended $2.5 billion for all VA infrastructure programs; 
however, the Administration requested only $1 billion. Over the last 
several budget cycles, Congress also failed to address this growing 
problem or provide necessary resources for VA to meet all of its 
infrastructure maintenance and modernization plans. To complicate 
matters VA has lacked expertise to efficiently manage its Capital 
Assets Program resulting in significant cost overruns on several 
projects. While certainly a need exists to maximize savings from 
closing unused or underutilized facilities, the Commission's report 
points out that these savings are estimated at only $26 million per 
year, an amount that would not begin to make up for the shortfall in 
infrastructure spending required to maintain the remaining VA system. 
Also, under budget formulation policies, any such savings from closed 
or downsized facilities most likely would be lost to VA. Unless 
Congress and future Administrations begin to provide realistic funding 
levels to repair, maintain and replace existing VA health care 
infrastructure, these reforms will be significantly challenged.
---------------------------------------------------------------------------
    \8\ Independent Assessment of the Health Care Delivery Systems and 
Management Processes of the Department of Veterans Affairs, The MITRE 
Corporation, September 1, 2015, p. K-1.
---------------------------------------------------------------------------
Recommendation #9: Establish a board of directors to provide overall 
        VHA Care System governance, set long-term strategy, and direct 
        and oversee the transformation process.
    While a board of directors in commonplace in the private sector 
hospital setting, DAV does not support the recommendation that would 
eliminate the VA Secretary's control of the VA health care system and 
give it to an unelected, independent Board of Directors that would be 
less accountable to the President, Congress, veterans and the American 
people. Separating veterans health care services from other veterans 
benefits and services would result in a loss of comprehensive and 
coordinated support for veterans, particularly those injured or ill 
from their service. In our opinion, creating another layer of 
bureaucracy between veterans and the VA health care system would create 
more problems than solutions. We appreciate the Commission's interest 
in recommending greater stability and continuity of leadership; 
however; we believe better means are available to accomplish these 
goals without undercutting VA's uniquely integrated system of services 
and benefits.
    Rather than create an inherently political and bureaucratic layer 
between veterans and their health care system, these same purposes 
could be accomplished through the establishment of strategic planning 
mechanisms currently being used by the Departments of Defense and 
Homeland Security. Specifically, we propose that VA be required to 
undergo a Quadrennial Veterans Review (QVR), similar to the Quadrennial 
Defense Review (QDR) and Quadrennial Homeland Security Review (QHSR). 
The QVR, similar to its counterparts, would establish a national 
strategy to guide the creation of Federal policies and programs for 
veterans, and would be timed to overlap with Presidential 
administrations to provide continuity and insulation from political 
influence.
    In addition, similar to the Departments of Defense and Homeland 
Security, there should be established a Future Year Veterans Program 
(FYVP) that would establish five-year resource needs and projections 
that VA would need in order to implement the policies and programs set 
out in the QVR. VA should also fully convert its budgeting and spending 
systems to a Planning, Programming, Budgeting and Execution (PPBE) 
system also used by the Departments of Defense and Homeland Security in 
order to assure accountability in how VA allocates it resources to meet 
immediate, short-term and long-term strategic goals. Establishing new 
planning and budgeting functions could provide VA stability and 
continuity in a more practical, effective and feasible manner than 
trying to establish a semi-independent governance board.
    In addition, consideration should be given to overlapping the terms 
of the Under Secretary for Health and other senior VA leaders with 
Presidential elections, to provide additional stability and continuity, 
and to insulate these officials from political influence.
       additional comments on commission on care recommendations
Recommendation #2: Enhance clinical operations through more effective 
        use of providers and other health professionals, and improved 
        data collection and management.
    DAV generally supports the intent of this recommendation but notes 
that additional funding would be essential for VA to hire new support 
staff discussed by the Commission. We also note the recommendation to 
eliminate bed reporting requirements under the Millennium Act is 
unclear.
    We believe the oversight afforded by this Act is important; 
however, given changes in the veteran patient population, their health 
care needs, and the manner in which health care is delivered today, 
reinstating or maintaining the existing comparison year of 1998 [for 
bed levels] for a number of important programs would not produce 
information useful for Congressional oversight, veterans service 
organizations, and for others with interest in VA capacity.
Recommendation #3: Develop a process for appealing clinical decisions 
        that provides veterans protections at least comparable to those 
        afforded patients under other federally-funded programs.
    DAV supports the recommendation to create a fair, transparent and 
timely process to appeal clinical decisions, and we have testified 
before Congress on this concept. We would emphasize the importance of 
including veteran patients and veterans advocates during the 
development of this procedure.
Recommendation #4: Adopt a continuous improvement methodology to 
        support VHA transformation, and consolidate best practices and 
        continuous improvement efforts under the Veterans Engineering 
        Resource Center.
    DAV supports the recommendation for VHA to adopt a model of 
continuous improvement and to share and standardize best practices in 
accordance with our Resolution No. 244, which calls for VA to maintain 
a comprehensive health care system for enrolled veterans, endemic to 
which is continuous improvement and the advent of best practices. We 
also agree that the three Veterans Engineering Resource Centers should 
play a more prominent role in the maintenance and improvement of such a 
system. Currently, VA employs numerous clinical researchers and 
operates several centers of excellence, health services research and 
development centers, and other centers devoted to continuous 
improvement, quality enhancement, patient safety and other factors 
affecting the model of care for veterans' health. Each has its own 
history, mission and proven accomplishments that have and continue to 
serve veterans. In addition, because systems engineering, as with other 
systemic change approaches, has limitations particularly in complex 
network-based adaptive systems, such limitations should also be 
considered when implementing this recommendation.
Recommendation #5: Eliminate health care disparities among veterans 
        treated in the VHA Care System by committing adequate personnel 
        and monetary resources to address the causes of the problem and 
        ensuring the VHA Health Equity Action Plan is fully 
        implemented.
    DAV supports the recommendation to more effectively address health 
care equity issues in VA's ethnic and minority populations. We refer 
the Committee to DAV's 2014 report, Women Veterans: The Long Journey 
Home, which details the barriers and program inequities that women 
veterans face. Our report offered specific recommendations to remedy 
these challenges.
Recommendation #7: Modernize VA's IT systems and infrastructure to 
        improve veterans' health and well-being and provide the 
        foundation needed to transform VHA's clinical and business 
        processes.
    DAV supports the recommendation to modernize and give VHA 
functional control over its IT systems in accordance with our 
recommendations in the IB. To assure full coordination of the proposed 
integrated networks will require full implementation of new IT systems 
and complete interoperability across VA and network providers. We would 
again note that significant time and dedicated resources will be 
required to achieve this goal.
Recommendation #8: Transform the management of the supply chain in VHA.
    DAV generally agrees with this recommendation. We would note in 
consonance with our recommendations in the IB that some supply and 
acquisition programs and services are critically important to seriously 
disabled veterans, such as those affecting the procurement of certain 
types of prosthetics and sensory aids. Careful consideration must be 
given to balancing national standardization concepts with local 
flexibility to meet the unique needs and preferences of veterans who 
need these specialized services to address their disabilities.
Recommendation #10: Require leaders at all levels of the organization 
        to champion a focused, clear, benchmarked strategy to transform 
        VHA culture and sustain staff engagement.
    DAV supports this recommendation and we note our specific support 
for VA's MyVA initiative that is underway and already beginning to 
address these concerns.
Recommendation #11: Rebuild a system for leadership succession based on 
        a benchmarked health care competency model that is consistently 
        applied to recruitment, development, and advancement within the 
        leadership pipeline.
    DAV supports the intent of this recommendation on the basis of our 
recommendations in the IB dealing with the need for reforms in VA's 
human resources management programs, and again note that VA's MyVA 
initiative and other new leadership initiatives are beginning to 
address these issues.
Recommendation #12: Transform organizational structures and management 
        processes to ensure adherence to national VHA standards, while 
        also promoting decisionmaking at the lowest level of the 
        organization, eliminating waste and redundancy, promoting 
        innovation, and fostering the spread of best practices.
    DAV generally supports the intent of this recommendation; however, 
transformation of this size and scope impacting the entire VA health 
organizational structure will have far reaching effects and must be 
carefully evaluated to mitigate any adverse consequences while 
achieving the overall goal.
Recommendation #13: Streamline and focus organizational performance 
        measurement in VHA using core metrics that are identical to 
        those used in the private sector, and establish a personnel 
        performance management system for health care leaders in VHA 
        that is distinct from performance measurement, is based on the 
        leadership competency model, assesses leadership ability, and 
        measures the achievement of important organizational 
        strategies.
    DAV generally supports the intent of this recommendation, although 
we would emphasize that not all performance metrics could or should be 
identical to those used in the private sector due to the unique nature 
of the VA health care system and the significant differences between 
patient cases mix in VA facilities versus those in private care. Health 
care outcomes and patient satisfaction could be measured consistently 
between VA and private providers; however, metrics related to cost, 
value or efficiency are less likely to provide meaningful comparisons 
because of differences in how VA and private systems are funded, the 
role of private health insurance, the primary-preventative model of VA 
health care and the interconnection of VA's complementary psych-social 
services and benefits--none of which generally exist in private care. 
VA should continue to develop and optimize metrics that provide 
meaningful feedback about its unique health care model, as well as help 
develop new benchmarks that both VA and the private sector can use to 
strengthen health outcomes and performance measurement.
Recommendation #14: Foster cultural and military competence among all 
        VHA Care System leadership, providers, and staff to embrace 
        diversity, promote cultural sensitivity, and improve veteran 
        health outcomes.
    DAV generally agrees with this recommendation. In terms of 
providing military culture competency, VA providers are generally well-
trained, though there remains room for improvement. As networks are 
developed, ensuring some level of military/veteran cultural competency 
to non-VA providers will be critical, although they may never possess 
the same level of immersion or understanding about the impact of 
military service as VA providers who work full-time inside a veteran-
focused environment. We would also agree that non-VA providers should 
be expected to deliver the same level of veteran-focused care as VA 
providers. For example, all providers treating veteran patients need to 
ask about their military history and possible toxic exposures and be 
knowledgeable about medical conditions generally associated with 
certain wars or military conflicts.
Recommendation #15: Create a simple-to-administer alternative personnel 
        system, in law and regulation, which governs all VHA employees, 
        applies best practices from the private sector to human capital 
        management, and supports pay and benefits that are competitive 
        with the private sector.
    DAV recognizes that the current laws governing VA personnel issues 
are complex and may need to be amended. We also recognize the need to 
strengthen VA's ability to recruit, hire, retain and be competitive 
with the private sector. However, we do not have a formal position on 
whether the creation of an alternative personnel system would be the 
best way to accomplish these goals.
Recommendation #16: Require VA and VHA executives to lead the 
        transformation of HR, commit funds, and assign expert resources 
        to achieve an effective human capital management system.
    DAV fully supports this recommendation on the basis of our human 
resources management concerns expressed in the IB.
Recommendation #17: Provide a streamlined path to eligibility for 
        health care for those with other than honorable discharge who 
        have substantial honorable service.
    DAV supports this recommendation on the basis of our National 
Resolution No. 226, adopted by delegates to our most recent National 
Convention, which calls for a more liberal review of other than 
honorable discharges for purposes of receiving VA benefits and health 
care services in cases of former servicemembers whose post-traumatic 
stress disorder, Traumatic Brain Injury and military sexual trauma or 
other trauma contributed to their administrative discharges 
characterized as other than honorable.
Recommendation #18: Establish an expert body to develop recommendations 
        for VA care eligibility and benefit design.
    DAV does not believe a new commission or task force is needed to 
make adjustments to veterans health care eligibility or benefits 
design. The Secretary already possesses tools to control access through 
enrollment decisions, and Congress retains complete discretion to 
modify eligibility requirements, to adjust the health care benefits 
package or other benefits through the legislative process.

    Mr. Chairman, this concludes my testimony and I would be pleased to 
respond to any questions you and other Members of the Committee may 
have about the Commission's report and VA health care reform.

    Chairman Isakson. Thank you, Ms. Ilem.
    Ms. Augustine?

 STATEMENT OF LAUREN AUGUSTINE, SENIOR LEGISLATIVE ASSOCIATE, 
            IRAQ AND AFGHANISTAN VETERANS OF AMERICA

    Ms. Augustine. Chairman Isakson and Members of this 
Committee, on behalf of Iraq and Afghanistan Veterans of 
America and our more than 425,000 members and supporters, thank 
you for the opportunity to share our views on the Commission on 
Care Report.
    There are few issues more important to the healthy 
transition home for our generation of veterans than ensuring a 
veteran-centric, exceptional, and sustainable VA. We know from 
our member research that our members are increasingly turning 
to the VA for health care.
    In our most recent survey, 29 percent of our members 
reported using the VA exclusively, up 6 percentage points from 
the previous 23 percent. Those using the VA in combination with 
other insurance is currently 63 percent, up 5 percentage 
points. As more veterans return and as we face the challenges 
of physical and mental injuries, we need to know that the VA 
will deliver for us. We must get this right.
    The Commission on Care report was intended to map out a 
path to that VA, and in general is pointed in the right 
direction. IAVA agrees that we need to reform VHA. Our analysis 
of each recommendation is detailed in our testimony submitted 
for the record. Today's remarks will focus on IAVA's general 
analysis of the report as well as three of the 18 
recommendations. We have six general comments on the report.
    One, the report is presented as a series of independent 
recommendations. It fails to acknowledge that the success of 
implementing a single recommendation likely depends on the 
execution of others and will also require extensive time and 
resources to execute effectively.
    Two, the report fails to consider how these recommendations 
to VHA will impact the VA as a whole, particularly VHA's 
ability to continue coordinating with VBA and NCA.
    Three, the report fails to analyze the impact of 
recommended VHA reforms on VHA's ability to conduct research 
and train future clinicians.
    Four, the report does not acknowledge the challenges faced 
by VA due to the misalignment of demand, resourcing, and 
authorities.
    Five, the report failed to take into account reforms and 
programs that the current VA Secretary has already planned and/
or implemented.
    Finally, six, the report recommendations are broad and can 
be left somewhat open to interpretation.
    As for the specifics of the recommendation, IAVA broadly 
agrees with most of them and VA's response to the report, but 
we would like to focus the remainder of today's remarks on 
Recommendations 1, 9, and 17. Specifically, IAVA opposes 
external primary care providers, IAVA opposes the creation of a 
board of directors, and IAVA supports a streamlined path to 
eligibility for other than honorable discharges.
    On Recommendation 1, IAVA supports an integrated network of 
care that includes community providers, led by VA primary care 
providers, managing the veterans' care. However, Recommendation 
1 is too broad, lacking critical pieces of analysis and with a 
fatal flaw: the external primary care provider. It also assumes 
that community providers will be available and able to absorb 
the demand created by integrating such a network.
    On Recommendation 9, IAVA understands the reasoning behind 
the establishment of a board of directors and decrees that 
continuity in leadership is critical to long-term reform. 
However, we echo the concerns raised by many, including the VA, 
and do not support this recommendation in an already burdensome 
bureaucracy.
    On Recommendation 17, IAVA strongly agrees with the need to 
provide a streamlined path to health care eligibility for those 
with other than honorable discharges who have substantial 
honorable service.
    Those with other-than-honorable discharges can be among the 
most vulnerable in our veteran population. Awarding temporary 
eligibility to these individuals will allow for access to 
critical services without delay in health care, due to the 
current process for determining eligibility. However, it is 
important to stress that, with this change, will be a resource 
burden on the VA that will require Congress to support. With 
increased demand comes increased need for resources.
    To close remarks today, I would like to reiterate several 
key points. One, reforming VHA into a truly 21st century health 
care system will require significant coordination between the 
next president, VA, Congress, VSO partners, and the veterans we 
all serve. Two, these changes will also require a significant 
financial investment that should not come at the expense of 
cutting existing benefits. And, three, again, these changes 
cannot be siloed within themselves but must be part of a 
comprehensive plan to be effectively implemented.
    Thank you for your time and attention.
    [The prepared statement of Ms. Augustine follows:]
 Prepared Statement of Lauren Augustine, Senior Legislative Associate, 
                Iraq and Afghanistan Veterans of America
    Chairman Isakson, Ranking Member Blumenthal and Distinguished 
Members of the Committee: On behalf of Iraq and Afghanistan Veterans of 
America (IAVA) and our more than 425,000 members and supporters, thank 
you for the opportunity to share our views on the recently released 
Commission on Care Report. The Commission on Care was created by the 
Veterans Choice, Accountability and Access Law of 2014 and was charged 
with providing a framework for designing the Veterans Health 
Administration (VHA) for the next 20 years. IAVA appreciates the 
opportunity to have the voices of this Nation's newest veterans heard 
as we discuss the long term future of veteran health care.
    Overall the Commission on Care report has put forward thoughtful 
analyses and recommendations for reforming VHA. IAVA broadly agrees 
with many of the recommendations, but also has reservations with a few, 
which are outlined in detail in this testimony. Further, we have an 
overarching concern with the lack of consideration for how these 
recommended changes to VHA will impact the Department of Veterans 
Affairs (VA) as a whole, particularly VHA's ability to continue 
coordinating with the Veteran Benefits Administration (VBA) and 
National Cemetery Administration (NCA) as well as its ability to 
continue leading in health research and clinician training.
    Regardless of the specifics of each recommendation, one thing is 
certain: Reforming VHA into a truly 21st century healthcare system will 
require significant coordination between VA, the larger administration, 
Congress, VSO partners, and the veterans we all serve. This 
coordination must be done in a bipartisan, veteran-centric manner that 
understands transformative change requires resources. IAVA encourages 
Congress to listen to the needs of the VA and fund any necessary 
changes at adequate levels without cutting existing critical benefits, 
like the GI Bill.
                            general analyses
    1. The report fails to consider how these recommendations to VHA 
will impact the VA as a whole, particularly VHA's ability to continue 
coordinating with the the VBA and NCA. One of the most unique aspects 
of the VA is its ability to offer wrap-around services to the veterans 
in its care. VHA is not only responsible for health care, but also 
oversees critical programs like suicide prevention and veteran 
homelessness. Over the years, the necessary coordination between VHA, 
VBA and NCA has continually improved. While not perfect, the cross-
coordination of the these administrations is critical in maintaining 
VA's ability to provide these wrap-around services and fully support 
the veteran. This report does not address this critical need for 
coordination and how coordination would be impacted if these 
recommendations to VHA were implemented, but it must.
    2. The report fails to analyze the impact of recommended VHA 
reforms on VHA's ability to conduct research and train future 
clinicians. Seventy percent of physicians receive some level of 
professional training from the VA. VA also trains over 20,000 nurses 
and nearly 35,000 people in other health related fields annually. This, 
combined with the robust research program that has led to 
groundbreaking discoveries in prosthetic development, spinal cord 
injuries, mental health injuries and burn care, expands VHA's impact in 
the community beyond any simple health care provider. These additional 
roles are critical aspects of the VHA footprint that were not accounted 
for in the development of the Commission on Care report. The impact of 
implementing these recommendations on these additional critical VHA 
roles must be taken into account.
    3. The report does not acknowledge the challenges faced by VA due 
to the misalignment of demand, resourcing and authorities. The 
Independent Assessment of VA conducted by the Mitre Corporation found 
that a misalignment between demand, resourcing and authorities is one 
of the critical challenges of the VA to execute effectively on its 
mission. This report does not address this challenge. As the writers of 
the Independent Budget point out, at its current state VA is 
underfunded and cannot meet demand. Budget approval rests with 
Congress; only they can properly align demand and resources. And such 
substantial reform efforts, while needed, will require proper and 
realistic resourcing. IAVA would again echo our concern of recent 
Congressional efforts to pay for new services and benefits at the VA by 
cutting existing benefits and make a strong recommendation that this 
method not be used to fund transformative change within VHA.
    4. The report is presented as a series of independent 
recommendations; it fails to acknowledge that the success of 
implementing a single recommendation likely depends on the execution of 
others and will also require extensive time and resources to execute 
effectively. The Commission on Care report puts forward a number of 
recommendations that will require time and resources to implement, and 
yet the challenges inherent to such a long-term, resource-intensive 
process are not addressed. Further, the report outlines a series of 
independent recommendations, but does a poor job of showing their 
interconnectedness. For example, an integrated network of care cannot 
be built without an updated technology platform and infrastructure to 
support the network. Yet these, and the costs associated with them, are 
not mentioned in the recommendation to create an integrated network of 
care. This lack of integration gives a false sense of overall cost of 
implementing this plan. It also fails to emphasize that in many cases, 
if one recommendation is adopted without others, the overall plan to 
improve VHA will fail. It is critical to recognize that while these 
recommendations are presented as stand-alones, many will be intertwined 
and one cannot be fully achieved without others.
    5. The report failed to take into account reforms and programs that 
the current VA Secretary has already planned and/or implemented. The 
Secretary conducted an extensive internal assessment of the VA when he 
was initially appointed to the position in 2014. As a result, he has 
put into action the MyVA initiative, which addresses many of the points 
raised by the Commission on Care report. The report does not 
specifically address this initiative or take under consideration 
potential redundancies of the recommendations of the Commission report.
    6. The report recommendations are broad, contradictory at times, 
and can be left somewhat open to interpretation. This presents a 
challenge as leadership and the makeup of Congress changes. The broad 
and contradictory nature of the report does not provide clear and 
concise direction and the intent of the Commission in making these 
recommendations might be lost to political leanings.
                   analyses of report recommendations
Recommendation #1: Across the United States, with local input and 
        knowledge, VHA should establish high-performing, integrated 
        community-based health care networks, to be known as VHA Care 
        Systems, from which veterans will access high-quality health 
        services.
    IAVA Analysis: IAVA recognizes that the VA cannot fulfill its 
mission alone and a fully integrated network of care that includes 
community providers will be essential to achieving this mission. We 
also agree with the need for an integrated model that requires patients 
to consult with a primary care provider to receive specialty care 
services and removes the arbitrary eligibility criteria enacted by the 
Choice Program. However, we disagree with primary care services being 
available outside of the VA, even if it is limited to within the 
community network. While well-intentioned, IAVA is concerned that a 
broad interpretation of this recommendation creates a framework whereby 
VHA as an institution can slowly be phased out. Furthermore, IAVA is 
not convinced the primary care providers outside the VA could 
effectively treat the whole veteran and effectively help veterans 
navigate the VA. A veteran's primary care provider needs to be the 
quarterback of their care; they've got to be central and fully 
integrated into the team.
    Additionally, the budget assessment for this recommendation makes a 
number of assumptions that may or may not hold true. First, the 
economic analysis does not include cost assessments for upgrading the 
IT platforms to support a truly integrated network, costs associated 
with the needs of the physical infrastructure of facilities nor 
additional administrative costs to support this new model.
    Although not specifically addressed, this recommendation also 
assumes that community providers will be available and able to absorb 
the demand created by integrating this network. The model estimates as 
much as 60 percent of VA care shifting to the community network (from 
34 percent currently). This will likely create a large demand on a 
community medical system already struggling to meet the demand of 
existing civilian patients (a challenge already realized by VA Choice 
providers). Finally the implementation of such a system does not take 
into account the impact on research and training, and could have a 
severe negative economic impact if not mitigated.
    Overall, IAVA supports an integrated network of care that includes 
community providers, with integration of VA primary care providers 
managing the patient care and an overall resource estimate that 
considers additional costs needed for administrative support, IT 
systems and infrastructure required to support the network. We find 
this recommendation well intentioned, but too broad, lacking critical 
pieces of analysis, and with a fatal flaw: the external primary care 
provider.
Recommendation #2: Enhance clinical operations through more effective 
        use of providers and other health professionals, improved data 
        collection and management.
    IAVA Analysis: There is a growing shortage of physicians and the 
healthcare community will need to be open to expanding responsibilities 
for all health professionals. IAVA agrees with the need for VHA to more 
effectively engage its professional staff and ensure that clinicians 
have the support staff, both clerical and clinical, they need to use 
their time more efficiently and effectively to treat patients. We also 
agree that data integrity and collection must be a priority.
Recommendation #3: Develop a process for appealing clinical decisions 
        that provides the veterans protections at least comparable to 
        those afforded under other federally-supported programs.
    IAVA Analysis: IAVA has no strong opinion on this recommendation. 
IAVA does support the intent to convene an interdisciplinary panel to 
further assess and offer recommendations regarding revising the 
clinical appeals process to ensure the veteran is receiving a judicious 
and uniform process when appealing a clinical decision.
Recommendation #4: Adopt a continuous improvement methodology to 
        support VHA transformation, and consolidate best practices and 
        continuous improvement efforts under the Veterans Engineering 
        Resource Center.
    IAVA Analysis: IAVA has continually recognized that one of the 
challenges at VHA is sharing best practices across the VHA system of 
care. Under the leadership of Secretary McDonald and the Undersecretary 
for Health, Dr. Shulkin, VHA continues to try and identify innovative 
solutions at the local level and bring these to the greater VHA 
community. However, streamlining these practices has been a challenge. 
We concur with the intent of this recommendation, VHA must establish an 
effective way to identify these transformative programs and share them 
across the VA in a streamlined and efficient way. However, we are not 
confident that the Veterans Engineering Resource Center is the 
appropriate entity to meet this intent.
Recommendation #5: Eliminate health care disparities among veterans 
        treated in the VHA Care System by committing adequate personnel 
        and monetary resources to address the cause of the problem and 
        ensuring VHA Health Equity Action Plan is fully implemented.
    IAVA Analysis: IAVA agrees that VHA should adopt as a primary 
mission the elimination of health care disparities among the veterans 
it serves. As the report states, minority populations are growing in 
the U.S. as a whole, and also within the veteran community. For VA to 
fully recognize its mission to serve veterans, it must be focused on 
serving all veterans.
    IAVA has recently focused on improving services to women veterans. 
Women veterans are a minority group, but they are not homogeneous. 
Women veterans are a very diverse population. We agree with the 
report's findings that the VA prioritize and fully resource serving 
minority populations. Additionally, we agree that while VA has improved 
its focus on understanding these populations through research, more 
must be done. There is an overall lack of data on vulnerable 
populations and a lack of data on how VA is doing to support these 
populations. This data gap must be closed. In doing so, VA will have 
the tools to finally address the needs of these populations in a data-
informed way.
Recommendation #6: Develop and implement a robust strategy for meeting 
        and managing VHA's facility and capital-asset needs.
    IAVA Analysis: As the Commission on Care report recognizes, the VHA 
infrastructure is in dire need of attention. The average facility is 50 
years old, resources for updates are nowhere near adequate and the 
ability for VA to conduct needs assessments of its facilities and act 
on those assessments are hindered by Congressional oversight. IAVA 
agrees that the VA must have more flexibility to meet its facility 
needs. We also recognize the growing importance of ambulatory care 
needs, while balancing the availability of inpatient facilities
    Additionally, we feel it is imperative to recognize the current 
challenges for VA to enter into agreements with health care partners to 
share space, equipment or personnel. Current law makes it nearly 
impossible for these private-public partnerships to be entered into, 
and in order for VA to implement recommendation one of this report, an 
integrated network of care, this capability is essential.
    IAVA also agrees that there could be resources gained by empowering 
VA to make these critical facilities decisions. There are a number of 
legislative changes that can be made to address the critical 
infrastructure needs of the VA. It will be imperative that Congress 
work with the VA to make these needed changes a reality.
Recommendation #7: Modernize VA's IT systems and infrastructure to 
        improve veterans' health and well-being and provide the 
        foundation needed to transform VHA's clinical and business 
        practices.
    IAVA Analysis: IAVA recognizes the VA IT system will be a critical 
component of an integrated system of VA care. Currently, the IT system 
is woefully outdated and does not afford the possibility of this 
integrated system. The current care in the community programs and 
providers do not interface with VA in a streamlined manner, making care 
disjointed. Further, the report points out that a lack of standard 
clinical documentation and a standardized electronic health records 
(EHR) across all facilities makes record sharing across facilities and 
from facility to veteran very difficult. IAVA agrees with these 
findings. In order for VHA to provide a streamlined, high quality and 
timely level of care, the IT system must be brought into the 21st 
century. VHA must have a detailed strategy and roadmap to achieve this 
level of IT and it will require the support of Congress to fulfill its 
vision.
    IAVA has advocated not only for an update to the VHA IT system, but 
also the development of an interoperable EHR between Department of 
Defense (DOD) and VA and within VA. This is critical to providing 
patient service to the military/veteran population. It is is also 
required by law and past due. However, with an integrated network, the 
need for interoperability will go beyond the VA and DOD and include its 
community partners.
    We are concerned that the priorities of VHA's IT needs are getting 
lost in the Office of Information and Technology and agree VHA needs an 
IT advocate working to meet the IT needs of VHA. However, we believe 
this would also benefit VBA and NCA and they too should have IT 
advocates.
    Finally, we agree that the budget cycle as it stands now makes it 
very difficult for VHA to plan for and execute on IT needs, and concur 
that VHA's IT budget needs should also be on a two year cycle with 
VHA's advance appropriations cycle.
Recommendation #8: Transform the management of the supply change in 
        VHA.
    IAVA Analysis: This is beyond the scope of IAVA's expertise and 
therefore we take no position. However, we support any mechanisms that 
could improve efficiencies and allow for resources to be reallocated 
elsewhere in VHA with these improved efficiencies.
Recommendation #9: Establish a board of directors to provide overall 
        VHA Care System governance, set long-term strategy and direct 
        and oversee the transformation process.
    IAVA Analysis: IAVA understands the reasoning behind this 
recommendation and agrees that continuity in leadership is critical to 
long term reform. However, it can be very difficult to impose private 
sector practices (Board of Directors) on a public sector entity (VHA) 
because of the nature of that public sector entity.
    In an attempt to increase accountability in VHA, establishing a 
board runs the risk of the opposite effect. Particularly with the 
establishment of the board through various political appointees, the 
board risks becoming another entity where inaction becomes the norm 
because of opposing viewpoints. Additionally, as described the board 
has no fiduciary control; Congress will continue to be the final 
oversight authority. IAVA is concerned that the addition of the board 
adds another layer to the already burdensome bureaucracy. A board of 
directors without fiduciary responsibility effectively becomes an 
advisory board, and VA already has one, and arguably multiple, of those 
established through the MyVA Board and the VSO community.
    We understand the Commission's concerns over continuity of senior 
leadership roles such as the Undersecretary of Health and are willing 
to consider a longer term of appointment for the Undersecretary of 
Health, but believe that this requires further analysis on the impact 
on VBA and NCA. More generally, with a change in governance structure 
such as this recommendation, there must be considerations as to how 
this impacts the coordination between VHA, VBA and NCA.
    There is also further consideration to be made as to the role that 
VSOs, Congress and other informal advisors already play in this 
capacity.
Recommendation #10: Require leaders at all levels of the organization 
        to champion a focused, clear, benchmarked strategy to reform 
        VHA culture and sustain staff engagement.
    IAVA Analysis: As the report recognizes, the cultural and 
organizational health of VHA must be positively transformed before the 
VHA can function at its greatest potential. IAVA strongly agrees that 
in order to build a healthy culture, VHA must instil greater 
collaboration, ownership, and accountability among its employees. We 
applaud the strong dedication found among VHA employees and continue to 
advocate for policies and opportunities that best strengthen and 
support the VA's workforce.
    We agree with the report's recommendations that stress a systems-
oriented, leadership-supported, and flexible approach to cultural 
transformation. However, IAVA is concerned that this cultural 
transformation must be conducted throughout all of the VA and not 
exclusively siloed within VHA. Given the strong inter-agency 
cooperation at the VA and the need for VA leadership at its highest 
levels to support these goals, implementing the changes suggested by 
the report must be done across the whole VA.
    Additionally, the concept of the transformation office has the 
potential to help drive and focus the suggested cultural changes. 
However, we would need to understand the specifics of how the 
transformation office would function, how it would disseminate policies 
and training, and how it would be able to support local and national 
change to understand if such an office would be a more effective model 
of change than the current system. Since the report also directs this 
new transformation office to report directly to the suggested governing 
board, we would echo here our concerns detailed under the analysis of 
recommendation nine.
Recommendation #11: Rebuild a system for leadership succession based on 
        a benchmarked health care competency model that is consistently 
        applied to recruitment, development, and advancement within the 
        leadership pipeline.
    IAVA Analysis: IAVA overall agrees that VHA does not have a strong 
plan in place for leadership development and growth and this is 
critical for the continued success of VHA. Under Secretary McDonald, 
the need for leadership development has been recognized and is one of 
many areas where IAVA is excited to see progress already being made.
Recommendation #12: Transform organizational structures and management 
        processes to ensure adherence to national VHA standards, while 
        also promoting decisionmaking at the lowest level of the 
        organization, eliminating waste and redundancy, promoting 
        innovation, and fostering the spread of best practices.
    IAVA Analysis: IAVA supports streamlining VHA and empowering staff 
to make decisions, but in empowering the staff VA must ensure they have 
the right tools and metrics to make informed decisions. IAVA supports 
reducing redundancies and simplifying organizational structure, but 
also want to ensure that in simplifying vital processes are not lost.
    We have also supported the VA Secretary's request for more 
budgetary authority to make these critical decisions and route 
resources to where the need rests. We understand the need for a health 
care system to have that additional flexibility, but that must be 
carefully balanced with ensuring vital programs continue to be funded.
Recommendation #13: Streamline and focus organizational performance 
        measurement in VHA using core metrics that are identical to 
        those used in the private sector, and establish a personnel 
        performance management system for health care leaders in VHA 
        that is distinct from performance measurement, is based on the 
        leadership competency model, assesses leadership ability, and 
        measures the achievement of important organizational 
        strategies.
    IAVA Analysis: IAVA broadly agrees with the need for VHA to 
streamline and focus its organizational performance measures and 
establish the same in a personnel performance measure system. These 
metrics must be clearly defined, measurable, and speak more to the need 
for meaningful measures tied to safety, quality, patient experience, 
operational efficiency, finance and human resources (as indicated in 
the Independent Assessments). We also see value to tying these metrics 
to private sector measures given recommendation one to create and 
integrate the network of care, but hesitate to rely too much on the 
private sector measures given that VHA also has its own unique aspects 
that might warrant some measures outside of the private sector. 
Additionally, this is another area being addressed by the VA 
Secretary's MyVA transformation plan.
Recommendation #14: Foster cultural and military competence among all 
        VHA Care System leadership, providers and staff to embrace 
        Diversity, promote cultural sensitivity and improve veteran 
        health outcomes.
    IAVA Analysis: IAVA completely agrees that military cultural 
competence is critical for all who provide care to veterans. A recent 
RAND report that looked at military cultural competence among community 
mental health providers defined this not just as knowledge and comfort 
with the military culture, but also knowledge of evidence-based 
practices to treat mental health injuries and ability to practice these 
techniques. It's critical to recognize that competence applies at all 
levels, from the individual greeting as the veteran walks in the door, 
to the provider treating the patient. All VA staff must be trained in 
this. Additionally, providers and their support staff must understand 
the specific health indicators for this population to better serve 
them. IAVA supports all of the recommendations in this section specific 
to asking about military health history and awareness of all veteran 
groups, including providing quality care for women veterans and the 
LGBT community. This will be a critical requirement for any community 
providers that are adopted into the VHA network, whether it be the 
current care in the community programs, or some future iteration.
Recommendation #15: Create a simple to administer alternative personnel 
        system, in law and regulation, which governs all VHA employees, 
        applies best practices from the private sector to human capital 
        management and supports pay and benefits that are competitive 
        with the private sector.
    IAVA Analysis: IAVA is an active advocate for a dedicated focus on 
VA staffing. Specifically at VHA, we agree that attracting talent to 
VHA will be critical at all levels of the staffing hierarchy, and so 
competitive salaries and hiring incentives will be critical in doing 
this, as well as expediting the hiring process. We also recognize the 
tradeoff of moving from a Title 5 to a Title 38 hiring structure, 
including potential impacts on the diversity of the hiring pool. We 
recommend that should this recommendation be considered, this concern 
be addressed and then monitored if the recommendation is implemented. 
Given that VA serves a unique and diverse population, we want to be 
sure that the staff that serves this population maintains that same 
diversity.
    We also agree that VA H.R. should take a more proactive approach in 
developing leaders within VHA. We encourage VA to consider how VA H.R. 
can balance the needs to meet regulatory requirements, but more 
importantly emphasize professional development and fostering leaders 
among the VA ranks, as well as improving morale and hopefully as a 
result, retention.
    Any discussion on improving VA personnel systems must also include 
a discussion on increasing accountability at the VA. While a vast 
majority of VA employees serve veterans in an exemplary way, there are 
also those who discredit the VA through underperforming or plain 
negligent acts. Being able to jettison these employees in an expedited 
manner while also protecting whistleblowers and rewarding those that do 
serve in an exemplary way are the keys to restoring VA morale.
Recommendation #16: Require VA and VHA executives to lead the 
        transformation of HR, commit funds and assign expert resources 
        to achieve an effective human capital management system.
    IAVA Analysis: In order to achieve recommendation 15, 
recommendation 16 must also be a priority. To reform the personnel 
hiring and H.R. administrative systems, leadership must be in support 
and must prioritize it.
Recommendation #17: Provide a streamlined path to eligibility for 
        health care for those with an other-than-honorable discharge 
        who have substantial honorable service.
    IAVA Analysis: IAVA agrees with this recommendation. Those with 
Other-Than-Honorable (OTH) discharges can be among the most vulnerable 
in our veteran population. They are at a higher risk for suicide and 
homelessness, and often as a result of their discharge status may have 
no VA resources available to them. Community programs often mirror the 
eligibility criteria of the VA, and so even these resources may not be 
available to them. They become stuck in limbo, possibly needing help 
for an injury sustained while in service, but not able to obtain that 
help because they are not eligible due to their discharge status. For 
some, the injury obtained during service might have even contributed to 
the OTH discharge received.
    Awarding temporary eligibility to these individuals will allow for 
access to critical services without delay in health care due to the 
current process for determining eligibility. However, it's important to 
stress that with this change will be a resource burden on the VA that 
will require Congress to support. With increased demand comes increased 
need for resources.
Recommendation #18: Establish an expert body to develop recommendations 
        for VA care eligibility and benefit design.
    IAVA Analysis: This remains a critical issue within the veteran 
community and updates to VA eligibility have not been addressed in 20 
years. It is past time to do so. IAVA agrees with the recommendations 
to form a body to review these criteria and develop recommendations to 
meet the needs of all veterans.
    Again, IAVA appreciates the opportunity to outline our review of 
the Commission on Care. Change is necessary, and working together we 
know the VA and the health care it provides can be strengthened to 
provide the highest quality care for veterans in this Nation's history. 
IAVA looks forward to continuing to work alongside this Committee, 
Secretary McDonald and our fellow VSO partners to evaluate and 
implement changes necessary to best achieve this goal.

    Chairman Isakson. Thank you, Ms. Augustine.
    Ms. Campos.

STATEMENT OF CDR RENE A. CAMPOS, USN (RET.), DEPUTY DIRECTOR OF 
 GOVERNMENT RELATIONS, MILITARY OFFICERS ASSOCIATION OF AMERICA

    Commander Campos. Chairman Isakson, the Military Officers 
Association of America appreciates this opportunity to give our 
views on the Commission on Care report.
    MOAA was particularly grateful for the open and 
collaborative process Commissioners established in order to 
receive information and feedback from veterans themselves, as 
well as the VSOs and MSOs representing this constituency.
    Overall, MOAA supports most of the Commission's findings 
and we are pleased to see many of the report recommendations 
incorporate the changes that Secretary McDonald and VSOs have 
been advocating for since the implementation of the Commission 
on--since the Choice Act.
    In responding to the report, I would like to put right up 
front that we want to see the exhaustive work of the Commission 
and the critical legislation proposed by the Congress and 
Administration be enacted this year. The panels before us have 
already discussed that: the budget, the Veterans First Act, and 
appeals modernization, those particular ones. Let me focus on 
three specific recommendations, though.
    First of all, MOAA supports establishing high-performing, 
integrated, community-based health care networks. While VA 
alone cannot meet all the health care needs of veterans, the 
system does provide a foundational platform on which to build. 
And that is clearly stated up front in the report.
    MOAA believes a new system needs to preserve well-known 
programs and competencies in VHA's mission in the areas of 
clinical, education, research, and national emergency response. 
These are integrally related to the broader VA mission and 
American medical system.
    MOAA is pleased the Commission recognized VA's primary role 
in coordinating health care and helping veterans navigate the 
system. That said, though, VA must retain responsibility for 
managing VA's health--veterans' health information and patient 
outcomes to ensure quality and continuity of care services.
    Second, MOAA agrees with the Commission's recommendation to 
create an integrated and sustainable culture of transformation 
where all the programs and activities are aligned and leaders 
at all levels of the organization are responsible and 
accountable for improving organizational health and staff 
engagement. Such transformation requires modernizing VA's 
leadership and human capital management system across the 
enterprise. Such improvements will require the necessary 
funding and authorities to make that happen.
    As with many of our VSO partners, MOAA supports the concept 
of a longer-term appointment for the Under Secretary of Health. 
We, however, are not supportive of establishing a board of 
directors. MOAA believes Congress' role of oversight is 
essential and adequate in holding VA accountable, and Congress 
must continue to be the veterans' strongest advocate.
    Finally, MOAA aggress with the Commission's proposal to 
establish an expert body to develop recommendations for VA care 
eligibility and benefits design. The Commission recommends that 
VA revise its regulations to provide tentative health care 
eligibility for those with other than honorable discharge. The 
Commission believes that VBA's adjudication process in 
determining characterization of discharges takes far too long 
and is very strictly interpreted, preventing veterans from 
getting the care they need sooner rather than later.
    Instead, MOAA recommends that Congress direct VA to provide 
more information on the current scope of the problem--what the 
process is, what the potential costs, and the impact of--and 
what the impact would be on VHA if this recommendation was 
implemented.
    In conclusion, MOAA appreciates the Senate and the House 
Committees on Veterans' Affairs' unwavering leadership and 
focus on improving health care for our veterans.
    In closing, I would like to just share a quote from one of 
our veterans in the field, who articulates what MOAA's 
perspective is on VA health care. I quote,``I will tell you 
that our VA has a very solid reputation. And despite what is 
heard in the national press, I know, from both personal 
experiences and from experiences I have heard from others who 
use the VA in Durham, we are very fortunate. The VA medical 
center works well and the staff is committed to its mission.''
    When I walk through the VA medical center in Durham, I am 
struck with two things. The first is how complex it must be to 
manage such a facility. The second is what I see in the faces 
where nowhere--faces of people who have nowhere else to go. The 
VA is there for them.
    MOAA believes this VA medical center is the rule rather 
than the exception in VHA. It is our view that we must leverage 
these best practices and invest in this type of culture across 
the system. Our veterans and their families deserve no less.
    I thank you for this opportunity and look forward to your 
questions.
    [The prepared statement of Commander Campos follows:]
Prepared Statement of CDR Rene A. Campos, USN (Ret.), Deputy Director, 
     Government Relations, Military Officers Association of America
    Chairman Isakson, Ranking Member Blumenthal, and Members of the 
Committee, the Military Officers Association of America (MOAA) is 
pleased to present its views on the Department of Veterans Affairs (VA) 
Commission on Care Report under consideration by the Committee today, 
September 14, 2016.
    MOAA does not receive any grants or contracts from the Federal 
Government.
                           executive summary
    On behalf of our 390,000 members, MOAA appreciates the Congress' 
vision in establishing an independent commission to look at how best to 
organize and deliver health care in the VA Health Administration (VHA) 
in the 21st Century.
    After reports of secret waiting lists at the VA medical center in 
Phoenix, Arizona, MOAA urged President Obama to establish an 
independent commission in order to make immediate and long-range 
systemic changes necessary to provide the best quality care and support 
services to our Nation's servicemembers, veterans and their families.
    After 10 months of intense deliberations, public meetings, 
testimony, and extensive inputs from experts across the country, 
including MOAA, the federally-directed Commission on Care issued its 
final report on June 30, 2016.
    MOAA was particularly grateful for the open and collaborative 
process commissioners established in order to receive information, 
feedback and viewpoints from veterans themselves, as well as from 
veteran and military service organizations representing this 
constituency.
    Overall, MOAA supports most of the Commission's findings, and we 
are pleased to see many of the report recommendations incorporate the 
changes Secretary McDonald and veterans service organizations (VSOs) 
have been advocating for since the implementation of the Veterans 
Access, Choice and Accountability Act of 2014 (Choice Act).
    While much more remains to be done, we appreciate the Commission's 
sincere effort to strike a balance of sustaining and improving VA 
health care delivery while enhancing civilian care opportunities.
    Along with our VSO partners, we look forward to working with the 
President, Congress and the VA to translate the Commission's 
recommendations into effective action.
    The following section provides MOAA's views and concerns on 
selective issues and recommendations for your consideration.
         commission on care report analysis and recommendations
    MOAA believes Chairperson Nancy Schlichting's statement on the 
final report released on July 5, 2016, is an excellent characterization 
of the current system and provides a compelling reason for why 
immediate reform is needed.
    ``The system problems in staffing, information technology, 
procurement and other core functions threaten the long term viability 
of VA health care system and that key VA systems do not adequately 
support the needs of 21st century health care,'' stated Schlichting, 
CEO of the Henry Ford Health System. ``The Commission found that no 
single factor can explain the multiple systemic problems that have 
frustrated VA efforts to provide veterans consistent timely access to 
care. Governance challenges, failures of leadership, and statutory and 
funding constraints all have played a role. As the Final Report states, 
however, 'VHA has begun to make some of the most urgently needed 
changes outlined in the Independent Assessment Report (Independent 
Assessment of the Health Care Delivery Systems and Management Processes 
of the Department of Veterans Affairs Report, published January 1, 
2015), and we support this important work.''
    MOAA supports the following key elements of the report 
recommendations:

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

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

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

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

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

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

    Chairman Isakson. Thank you, Ms. Campos.
    Mr. Fuentes, welcome back.

   STATEMENT OF CARLOS FUENTES, DEPUTY DIRECTOR OF NATIONAL 
         LEGISLATIVE SERVICE, VETERANS OF FOREIGN WARS

    Mr. Fuentes. Thank you, Mr. Chairman. On behalf of the men 
and women of the VFW and our Auxiliary, I would like to thank 
you for the opportunity to present our views on the Commission 
on Care's final report.
    The VFW thanks the Commission. I would like to echo our 
friend, Rene here on their willingness to involve us in the 
process. The VFW believes that the Commission has made some 
meaningful suggestions on how to improve the health care VA 
provides veterans. The VFW urges Congress and VA to consider 
the recommendations we have supported and alternatives to the 
ones that we oppose.
    We strongly support the Commission's recommendation to 
improve the VA clinical appeals process. Due to the lack of 
system-wide processes, veterans have experienced vast 
differences when appealing clinical decisions, often delaying 
the care that they have earned and deserve.
    The VFW members have firsthand experience with the pitfalls 
of the fragmented VA clinical appeals process and believe it 
must be reformed to ensure veterans receive an appropriate 
response to their grievances. This includes the ability to 
provide evidence to support their appeals, which many VISNs do 
not permit.
    The VFW also supports amending VA's current health care 
eligibility recommendations to ensure veterans with other than 
honorable discharges have access to the lifesaving care they 
need and deserve.
    The VFW also supports the Commission's recommendation to 
establish high-performing, integrated, community-based networks 
which leverage the capabilities of the private sector and the 
public sector to meet the needs of veterans in each community.
    The VFW is glad to see the Commission also agrees that VA 
must remain the coordinator of care for veterans. It must 
develop systems and processes to help veterans make informed 
health care decisions. Doing so is vital to ensuring veterans 
receive high-quality and coordinated care rather than 
fragmented care which leads to lower quality and threatens 
patients' safety.
    That is why the VFW opposes the Commission's proposal to 
give veterans a list of primary care providers and hope that 
they are able to find one willing to see them. Veterans in need 
of primary care must be offered the opportunity to discuss 
their preferences and health care conditions with a nurse 
navigator, who can help them find a provider who fits their 
preferences and clinical needs.
    The VFW also opposes the Commission's recommendation to 
establish a governance board of political appointees to 
determine when and where veterans receive their health care. VA 
needs strong leadership, not more bureaucracy.
    However, we do agree that an exemplary Under Secretary of 
Health should continue to lead VHA regardless of political 
changes in Congress and in the White House. But instead of 
precluding the President from replacing an Under Secretary for 
Health, Congress and VA must evaluate ways to make the position 
more attractive to executives with experience running 
successful health care systems.
    That is why we were pleased with Dr. Shulkin accepted the 
nomination. But he is not the typical person who has occupied 
that role. Dr. Shulkin is the first non-career VA employee to 
be confirmed as Under Secretary for Health since Dr. Ken 
Kaiser, who led the largest and most successful health care 
transformation in VA's history. Congress and VA must ensure 
that the position of Under Secretary for Health attracts more 
candidates like Dr. Kaiser and Dr. Shulkin, not career VA 
employees who seek to protect the status quo.
    The VFW also supports most of the Commission's 
recommendation regarding capital infrastructure. We agree that 
waiving budgetary rules and improving VA's enhanced-use 
authority will enable VA to expand access.
    However, the VFW cannot support a BRAC Commission. The VA 
SCIP process already addresses the issues of unused property. 
It is Congress who has failed to remove these properties. The 
reason Congress has failed to act is the same reason it would 
fail to act under a BRAC-style process: local pressure from the 
veterans community.
    The solution is to develop the better communication plan 
with the impacted veterans and develop a replacement plan that 
ensures veterans do not experience a lapse in access to care. 
Veterans' fear of losing VA care drives Congress's inaction, 
and no commission or board will fix that.
    Mr. Chairman, thank you for the opportunity to testify, and 
I am happy to answer any questions you may have.
    [The prepared statement of Mr. Fuentes follows:]
    Prepared Statement of Carlos Fuentes, Deputy Director, National 
   Legislative Service, Veterans of Foreign Wars of the United States
    Mr. Chairman and Members of the Committee: On behalf of the men and 
women of the Veterans of Foreign Wars of the United States (VFW) and 
our Auxiliary, thank you for the opportunity to offer our thoughts on 
the Commission on Care's final report.
    The VFW thanks the Commission on Care for their hard work and 
extensive deliberations on how to improve the health care and services 
a grateful Nation provides its veterans. In particular, we thank 
Chairperson Nancy Schlichting for her work to build consensus among the 
commissioners and for her willingness to work with the major Veterans 
Service Organizations (VSOs) in order to gain an understanding of what 
veterans like and want to see improved in their health care system.
    While the VFW does not support every recommendation made by the 
Commission, we certainly believe the Commission accomplished its 
mission to propose bold transformation that can improve access to high 
quality care for our Nation's veterans. The VFW urges Congress and VA 
to act on the recommendations we support and consider alternatives to 
the ones we oppose.
Recommendation #1: Across the United States, with local input and 
        knowledge, VHA should establish high-performing, integrated 
        community health care networks, to be known as the VHA Care 
        System, from which veterans will access high-quality health 
        care services.
    Similar to the Independent Budget's ``Framework for Veterans Health 
Care Reform,'' the Commission recommends developing high performing, 
integrated and community based health care networks that leverage the 
capabilities of private and public health care systems to meet the 
health care needs of veterans in each community. The VFW is glad to see 
the Commission also agrees that VA must remain the coordinator of care 
for veterans and must develop systems and processes to help veterans 
make informed health care decisions. Doing so is vital to ensuring 
veterans receive high quality and coordinated care, rather than 
fragmented care which the Commission agrees results in lower quality 
and threatens patient safety.
    That is why the VFW opposes the Commission's proposal to give 
veterans a list of primary care providers and then find one willing to 
see them. The VFW does not believe it is necessary to trade quality 
care coordination for choice. Veterans in need of a primary care 
provider must be offered the opportunity to discuss their preferences 
and clinical needs with a VA health care professional to determine 
which provider (including private sector, VA and other public health 
care providers) best fits their preferences and clinical needs. This 
would ensure veterans make informed choices and receive care tailored 
them.
    The VFW is also concerned that the Commission's recommendation on 
how veterans would navigate its proposed community delivered service 
(CDS) within the Veterans Health Administration (VHA) care system 
ignores the Commission's key findings regarding care coordination. 
Instead of fully leveraging the nurse navigators ``to help veterans 
coordinate their care in VA and in the community,'' as the Commission 
describes as a possible supplement to its CDS recommendation, it calls 
for private sector primary care providers to coordinate the care 
veterans receive and leaves veterans to fend for themselves when 
scheduling appointments with community specialty care providers.
    While we agree that a veteran's primary care provider must have 
visibility of all the care a veteran receives at VA and in the 
community, we strongly believe VA, not the primary care provider, must 
serve as veteran's medical home. This includes helping veterans 
schedule appointments with specialty providers when they receive a 
referral from their primary care provider, which would ensure veterans 
receive care that fits their preferences and clinical needs. This also 
includes consolidating a veteran's medical history into one electronic 
health care record that is accessible by the veteran's VA and community 
health care providers.
    In an effort to alleviate demand on its primary care providers, VA 
is moving toward direct scheduling for certain specialty care, such as 
optometry and audiology. The VFW agrees with VA that certain types of 
care may not require a primary care consult and believes VA must have 
the ability to waive primary care referral requirements for such 
specialties. Such waivers must also apply to veterans who receive care 
through community care networks, which further exemplifies the need for 
VA to serve as the medical home for enrolled veterans.
    Counter to the Commission's recommendation, the VFW does not 
believe that the majority of eligible care would shift from VA 
facilities to the community care networks. VFW surveys and direct 
feedback from veterans indicate that veterans would like to receive 
more of their care from VA health care professionals who know how to 
care for their service-connected conditions. In the VFW's ``Our Care'' 
report from September 2015, we found that 53 percent of veterans prefer 
to receive their care from VA providers, which is higher than VA's 
reported reliance rate of 34 percent. VFW surveys of veterans who are 
eligible for the Choice Program under the 40-mile rule, which affords 
them the option to receive private sector care without a referral from 
a VA provider, also indicate that the majority of veterans continue to 
prefer VA providers despite having unfettered choice.
    However, the VFW is very concerned that open networks could lead to 
veterans receiving care from providers that are available instead of 
the ones they prefer. The VFW has heard from veterans who use the 
Choice Program that they would prefer to go to VA, but their local VA 
facilities do not provide the services they need, or they would have to 
wait too long for an appointment.
    The VFW fears that VA and Congress would interpret such veterans' 
use of private sector care as their preference for private sector care, 
when in reality they would have preferred to receive VA care, but 
private sector care was their only option. Doing so could lead to more 
resources being directed to community care networks and further 
depleting resources VA is given to expand access to the care veterans 
prefer. That is why the VFW believes continuous evaluation and 
adjustments to community care networks, as recommended by the 
Commission, must be based on veterans' preference, not simply 
utilization of networks.
    Regardless if care is delivered through community providers or VA 
medical facilities, VA must remain the guarantor of care to ensure such 
care is high quality, veteran-centric and accessible. That is why the 
VFW strongly supports the Commission's recommendation that VA require 
community care network providers to report quality, service and access 
metrics. The VFW also believes veterans who receive care through 
community care networks must be afforded the same patient rights and 
protections they receive at VA medical facilities.
    The VFW also supports a phased implementation of integrated 
networks with ongoing management and evaluation, national strategy and 
local flexibility to ensure veterans' needs are met. However, the VFW 
opposes the Commission's recommendation of establishing a board of 
directors, as discussed in our views of recommendation number nine, and 
believe management and implementation of integrated networks must be 
overseen by a multidisciplinary team of VA subject matter experts with 
direct and consistent guidance from local VA health care professionals 
and VSOs, similar to the approach VA used to develop its plan to 
consolidate community care programs and authorities.
                          clinical operations
Recommendation #2: Enhance clinical operations through more effective 
        use of providers and other health professionals, and improved 
        data collection and management.
    The VFW supports the recommendation to develop training programs 
for medical support assistants (MSA) to ensure VA health care providers 
devote more time to treating veterans rather than administrative tasks.
    While training is important, VA must also address the high turnover 
in MSA and entry level positions at the local level. VA has developed 
an expedited hiring process for MSAs as part of the MyVA 
transformation. The VFW fully supports this initiative, but believes VA 
must have statutory authority similar to the VA Canteen Service, which 
is exempt from title 5 hiring requirements and can directly hire entry 
level employees to fill high turnover positions.
    The VFW does not take a position on the recommendation to grant 
full practice authority to advance practice registered nurses. The VFW 
defers to VA in determining the most efficient and effective scope of 
practice of its providers. However, we will hold VA accountable for 
providing timely access to high quality health care, regardless if such 
care is provided by an advance practice registered nurse or a 
physician.
Recommendation #3: Develop a process for appealing clinical decisions 
        that provides veterans protections at least comparable to those 
        afforded patients under other federally supported programs.
    VFW members have experienced firsthand the pitfalls of VA's 
clinical appeals process. The VFW agrees with the Commission that a 
well implemented clinical appeals process is necessary to improve 
patient satisfaction, ensure veterans obtain medically necessary care, 
and mitigate disagreements between veterans and their health care 
providers. Currently, veterans who disagree with clinical decisions by 
their health care provider can appeal to the medical center's chief 
medical officer, who is reluctant to overturn a decision made by VA 
health care providers. A veteran is then able to appeal to the Veterans 
Integrated Service Network (VISN) director, who rarely overturns a 
decision made by a medical center chief medical officer. The VISN level 
decision is final, unless a veteran appeals to the Board of Veterans 
Appeals, which is not a viable option for veterans who require time 
sensitive medical treatments.
    Due to the lack of a system wide clinical appeals process with 
national oversight, veterans have experienced vast differences when 
appealing clinical decisions between multiple VISNs. That is why the 
VFW strongly agrees with the commission's recommendation to convene an 
interdisciplinary panel to revise VA's clinical appeals process. Such a 
panel must ensure veterans have the ability to provide justification or 
evidence to support their appeals, which many VISNs do not permit. 
Veterans must also have the ability to appeal clinical decisions above 
the VISN level.
Recommendation #4: Adopt a continuous improvement methodology to 
        support VHA transformation, and consolidate best practices and 
        continuous improvement efforts under the Veterans Engineering 
        Resource Center.
    The VFW agrees that improving employee experience is a vital aspect 
of reforming the VA health care system. The majority of VA employees 
take pride in their jobs and continuously identify ways to improve 
efficiency and productivity. However, such employees have not been 
given the tools or the processes to identify problems and make changes. 
That is why the VFW supports efforts to identify and disseminate best 
practices and recognize innovative employees who improve the care 
veterans receive.
                             health equity
Recommendation #5: Eliminate health care disparities among veterans 
        treated in the VHA Care System by committing adequate personnel 
        and monetary resources to address the causes of the problem and 
        ensuring the VHA Health Equity Action Plan is fully 
        implemented.
    The VFW supports this recommendation and agrees that health 
disparities based on social and economic differences have no place in 
the VA health care system. The VFW has heard directly from women 
veterans that VA employees have confused them for caregivers and 
spouses, or have challenged their veteran status because of their 
gender. Veterans of all races, backgrounds, and genders have sacrificed 
in defense of this Nation and must be treated with the respect and 
dignity they have earned and deserve.
    The VFW strongly supports building cultural and military competence 
among all community care network providers and employees. It is 
important that veterans receive care from providers who understand 
their health care needs and are familiar with the health conditions 
associated with their military service. This includes providers in VA 
medical facilities and private sector providers who participate in 
community care networks. By providing cultural competence training, VA 
would improve health care outcomes and ensure veterans receive care 
that is tailored to their unique needs.
                      facility and capital assets
Recommendation #6: Develop and implement a robust strategy for meeting 
        and managing VHA's facility and capital asset needs.
    The VFW agrees with most of the recommendations provided regarding 
capital infrastructure.
    We agree that waiving congressional rules requiring budgetary 
offsets for a period of time and expanding the enhanced-use lease 
authority will allow VA to enter into needed leases, without accounting 
for the cost of the entire lease in the first year. However, suspending 
this offset requirement for a few years will leave VA in the same 
position it finds itself in today if Congress does not find a long term 
solution to VA's leasing authority. VA also needs broader authority to 
enter into enhanced-use leases agreements. Public Law 112-154 reduced 
VA's authority to allow for only adaptive housing. Returning it to its 
prior authority will allow VA to lease more of its unused or 
underutilized property, while still contributing to the mission of VA.
    The VFW also agrees that reevaluating the total cost of minor 
construction projects is needed. Currently, VA will submit multiple 
minor construction projects that appear to be related for a single 
facility. This is evidence that either the $10 million cap on minor 
construction projects needs to be increased or VA needs the authority 
to bundle multiple minor contracts for the ease of planning and 
appropriating several minor projects at one time without violating the 
$10 million cap. Regardless of whether the cap amounts are adjusted, 
underfunding will continue to place much needed construction projects 
in competition with each other. Congress must fund VA construction 
accounts to a level where projects to expand access are not in 
competition for resources for new facilities or eliminating safety 
risks in facilities VA must maintain.
    The Commission recommends that a board analyze and make 
recommendations regarding VA's infrastructure needs and the CDS 
networks. The VFW believes that most of the functions of this proposed 
commission are already being carried out by either the Strategic 
Capital Infrastructure Plan (SCIP) or the Federal Real Property Council 
(FRPC). The VFW believes that the current roles of SCIP and the FRPC 
would need to be expanded to include the evaluation of community care 
on the overall capital planning process. SCIP analysis should be 
expanded to include the feasibility for public-private partnerships and 
sharing agreements with other public and community provides. This would 
fulfil the idea of better leveraging community resources to expand VA's 
capacity and capabilities.
    The VFW does not agree with the Commission on Care's BRAC 
realignment commission. The SCIP process already addresses the issue of 
under/unutilized property, and it is Congress that has failed to act to 
remove these properties. The reason they have failed to act is the same 
reason they would fail to act under a BRAC-style recommendation--local 
pressure from the veterans' community would cause them to vote ``no.'' 
The solution is to develop better communication with the local 
veterans' community and present the replacement plan that will occur 
when their VA hospital is closed. Veterans' fear of losing VA care 
drives Congress' inaction, and no commission or board will fix that 
without improved communications.
                         information technology
Recommendation #7: Modernize VA's IT systems and infrastructure to 
        improve veterans' health and well-being and provide the 
        foundation needed to transform VHA's clinical and business 
        processes.
    The VFW agrees that VHA must have a chief information officer (CIO) 
to focus on the strategic health care information technology (IT) needs 
of the VA health care system. VA Assistant Secretary for Information 
and Technology LaVerne Council has discussed the need for a senior 
level employee to oversee VHA IT projects. The VFW agrees that the VHA 
CIO must work closely with VHA clinical and operations staff to ensure 
IT systems meet the needs of their users, but continue to report to the 
Assistant Secretary for IT to ensure interoperability with Veterans 
Benefits Administration (VBA) and National Cemetery Administration 
(NCA) systems.
    The VFW agrees that the lack of advance appropriations for VA's IT 
accounts has hindered VA's ability to properly fund IT projects, 
specifically ones associated with VHA which is funded under advance 
appropriations. That is why the VFW has continuously called for 
Congress to provide advance appropriations for all of VA's budget 
accounts. We thank this Committee and the House Committee on Veterans' 
Affairs for enacting legislation to authorize advance appropriations 
for VA's medical services and mandatory accounts to ensure veterans can 
continue to receive care and benefits during a government shutdown, but 
it is vital that VA's remaining accounts, including IT, community care, 
research, NCA, VBA, Inspector General and VA's four construction 
accounts receive advance appropriations to ensure VA can fulfill its 
mission to veterans.
    The VFW does not have a position on whether VA should purchase a 
commercial off-the-shelf (COTS) electronic health care system. However, 
the VFW agrees that VA should turn to COTS products when such products 
are financially beneficial and lead to improved services for veterans, 
but VA must have the authority to develop homegrown products when 
necessary.
                              supply chain
Recommendation #8: Transform the management of supply chain in VHA.
    The VFW supports this recommendation to reorganize and standardize 
VA's supply chain to leverage economies of scale. This recommendation 
is similar to one of Secretary Robert McDonald's MyVA priority goals 
aimed at building an enterprise-wide integrated medical-surgical supply 
chain that leverages VA's scale to drive an increase in responsiveness 
and a reduction in operating costs, which the VFW fully supports.
    This transformation must rely on local level feedback and buy-in to 
succeed. While each medical facility cannot continue to dictate where 
their medical supplies are purchased, they must be given the 
opportunity to request specific supplies or products if needed in order 
to provide the best quality care. This is similar to non-formulary 
requests for prescriptions that are not on the VA's formulary. The 
transformation must also consider whether specific products are 
preferred or clinically needed by veterans, such as prosthetics 
equipment that may cost more, but lead to a better quality of life for 
veterans.
                           board of directors
Recommendation #9: Establish a board of directors to provide overall 
        VHA Care System governance, set long-term strategy, and direct 
        and oversee the transformation process.
    The VFW opposes this recommendation. The VFW believes VA needs 
leadership, not management by committee. Similar to the Commission on 
Care, the governance board would include political appointees, the 
majority of whom would be civilian health care executives and veterans 
who do not use the VA health care system. How, when and where veterans 
receive their health care cannot be determined by appointees who do not 
have a vested interest in improving the care and services veterans 
receive.
    Additionally, the VFW believes that a governance board would result 
in more bureaucracy. VHA's budget requests would still need to be 
approved by the Office of Management and Budget and appropriated by 
Congress. This recommendation also fails to resolve the misalignment 
between capacity to provide care and the demand on its programs that is 
highlighted in the Commission's report. The VFW recommends reforming 
the congressional appropriations process to ensure VA receives the 
resources it needs to meet veterans' health care needs, instead of 
creating more bureaucracy and further limiting how much care VA is able 
to provide.
    A number of reform ideas have been discussed to address this issue. 
One proposal is to make VA's health care accounts mandatory spending. 
Doing so would exempt VA health care accounts from discretionary budget 
caps which have limited VA's ability to expand access and implement 
needed reforms. Another proposal is to provide VA a true two-year 
budget by authorizing VA to transfer advance appropriations to its 
current year budget to cover budget shortfalls. However, such ideas 
have not been given proper consideration by Congress. The VFW believes 
it is time to consider innovative reforms to the VA health care 
appropriations process.
    This Committee, the House Committee on Veterans' Affairs, the 
Secretary of Veterans Affairs and the President must continue to 
provide oversight and management of the VA health care system with or 
without a governance board. Thus, a governance board would mean that 
VHA leadership would have additional management and reporting 
requirements which would only serve to further stymie the needed 
transformation process.
    Instead of creating more bureaucracy, Congress must build on 
Secretary of Veterans Affairs Secretary Robert A. McDonald's MyVA 
Advisory Committee, which has helped Secretary McDonald generate and 
improve the innovative programs VA is implementing under the MyVA 
Transformation Initiative. While VA has 24 other advisory committees, 
the MyVA Advisory Committee is unique because it serves a purpose 
similar to that of the proposed governance board. It is composed of 
leaders in health care, business, and the veterans' community, who 
review and comment on VA's operational, business, and organizational 
plans. The VFW urges Congress to make the MyVA Advisory Committee a 
permanent statutory committee to ensure future secretaries can benefit 
from the expertise of a board without impeding the Secretary of 
Veterans Affairs' authority to properly manage VA.
    The VFW agrees that VHA needs high quality and sustained 
leadership. We agree that an exemplary Under Secretary for Health 
should be allowed to continue to lead VHA despite political changes in 
Congress and the White House, but we do not believe the President 
should be precluded from replacing the Under Secretary. To ensure 
consistent leadership, Congress must evaluate ways to make the position 
of Under Secretary for Health more attractive to health care executives 
with extensive experience running successful health care systems. The 
VFW was pleased when Dr. David J. Shulkin accepted the nomination to 
replace Dr. Robert A. Petzel. That is why we intend to ask the next 
president to give Dr. Shulkin the opportunity to continue serving 
veterans, should he so desire. However, Dr. Shulkin is the exception. 
He is the first non-career VA employee to be appointed as Under 
Secretary for Health since Dr. Kenneth W. Kizer, who led the largest 
and most successful transformation of the VA health care system's 
history. Congress needs to make certain the position of Under Secretary 
for Health attracts more candidates like Dr. Kizer and Dr. Shulkin, not 
career VA employees who seek to continue the status quo.
                               leadership
Recommendation #10: Require leadership at all levels of the 
        organization to champion a focused, clear, benchmarked strategy 
        to transform VHA culture and sustain staff engagement.
    The VFW supports this recommendation. As discussed above, employee 
experience is vital to restoring veterans' trust and confidence in 
their health care system. Secretary McDonald is in the process of 
addressing this recommendation by transforming VA from a rules based 
culture to a principles based culture that empowers VA employees to do 
what is right, instead of fearing reprisal for not following every 
rule. Several veterans have reported improvements in the culture at VA 
medical facilities, but more work is still needed.
Recommendation #11: Rebuild a system for leadership succession based on 
        a benchmarked health care competency model that is consistently 
        applied to recruitment, development, and advancement within the 
        leadership pipeline.
    The VFW supports this recommendation. We agree with the importance 
of succession planning and the need for robust structured programs to 
recruit, retain, develop and promote responsible and high performing 
leaders. Specifically, the VFW strongly supports the recommendation to 
adopt and implement a comprehensive system for leadership development 
and management. VA employees must be prepared and willing to fill 
vacancies in leadership positions to ensure VA is not required to rely 
on temporary leadership to run its medical facilities.
Recommendation #12: Transform organizational structures and management 
        processes to ensure adherence to national VHA standards, while 
        also promoting decisionmaking at the lowest level of the 
        organization, eliminating waste and redundancy, promoting 
        innovation, and fostering the spread of best practices.
    The VFW generally supports this recommendation. We agree that the 
VA central office and VISN office staff have grown too rapidly and that 
fragmented authorities, lack of role clarity and overlapping 
responsibilities impacts VA's ability to deliver high quality and 
efficient health care. Specifically, the VFW agrees that VHA must 
consolidate program offices to create a flat organizational structure 
to streamline VHA's current cumbersome and duplicative organizational 
structure.
    The VFW understands the Commission's recommendation that Congress 
should reduce the number of VA appropriations accounts. While it is 
essential for Congress to use its power of the purse to influence VA 
programs, Congress must do so effectively and not impede VA from 
fulfilling its mission. For example, the Military Construction and VA 
Appropriations Act recently passed by the House and being considered by 
the Senate limits VA's VistaA Evolution project to $168 million, but 
requires VA to meet certain requirements before the funds become 
available. While the VFW understands the need for such reporting 
requirements, we believe VA must have the flexibility to use such funds 
immediately. Withholding such funds only serves to further delay VA's 
plans to modernize its electronic health care record.
Recommendation #13: Streamline and focus organizational performance 
        measurement in VHA using core metrics that are identical to 
        those used in the private sector, and establish a personnel 
        performance management system for health care leaders in VHA 
        that is distinct from performance measurement, is based on the 
        leadership competency model, assesses leadership ability, and 
        measures the achievement of important organizational 
        strategies.
    The VFW supports this recommendation. It is important to develop a 
performance management system that effectively measures outcomes and 
holds VA leaders accountable for improvements.
    However, the VFW does not believe such performance measures need to 
be identical to those used in the private sector. VA performance 
measures must adopt best practices from the private sector, but they 
must also acknowledge VA's unique mission and the fundamental 
differences between private and public health care systems.
                   diversity and cultural competence
Recommendation #14: Foster cultural and military competence among all 
        VHA Care System leadership, providers, and staff to embrace 
        diversity, promote cultural sensitivity, and improve veterans' 
        health outcomes.
    The VFW strongly supports this recommendation. As discussed above, 
cultural and military competence training of providers would ensure 
veterans receive care that is tailored to their unique needs.
    It is particularly important to build cultural competency among 
community care providers who do not have experience caring for veterans 
or may not be aware of best practices when caring for veterans with 
service-connected wounds and illnesses. A study by the RAND Corporation 
found that only 13 percent of private sector mental health care 
providers are ready and able to provide culturally competent and 
evidence based mental health care to veterans. The VFW believes VA must 
leverage the capacity of the private sector to provide mental health 
care to veterans, but it must also ensure veterans who use community 
care receive high quality and veteran-centric care by providing 
military competency training and sharing best practices with community 
care providers and ensuring such practices are adopted.
                               workforce
Recommendation #15: Create a simple-to-administer alternative personnel 
        system, in law and regulation, which governs all VHA employees, 
        applies best practices from the private sector to human capital 
        management, and supports pay and benefits that are competitive 
        with the private sector.
    The VFW supports this recommendation. VA must be able to recruit, 
train, retain and discipline a high performing workforce. The VFW 
agrees that civil service laws and regulations that govern how 
government employees are hired, how much they are paid, and how they 
are disciplined were not designed to support a high performing health 
care system. VA must have a personnel system that eliminates barriers 
to hiring and retaining high quality employees.
    We agree with the Commission that Congress must afford VA employees 
appropriate due process to appeal disciplinary actions. The VFW has 
also supported a number of accountability measures considered by this 
Committee, including S. 2921, the Veterans First Act, which would 
expand the Secretary's ability to remove or demote employees for poor 
performance or misconduct. Overall, the process that is taken to remove 
or demote VA employees who commit malfeasances must ensure such 
employees are no longer allowed to collect a paycheck or harm veterans, 
but protect good employees and whistleblowers from being wrongfully 
terminated or retaliated against.
    The VFW also agrees with the need to improve VA's student loans 
reimbursement programs. However, VA is already authorized to reimburse 
health care professionals up to $120,000 over five years of student 
debt, which is similar to the National Health Service Corps' loan 
repayment plan program. While the VFW would support increasing the 
amount VA health care professionals may receive, it would not make VA 
more competitive when hiring or retaining high quality employees, 
because local facilities are not given enough funds to fully utilize 
this program. For example, the VFW heard from a VA nurse that her 
medical center is given $80,000 per year for the education debt 
reduction program. These means the facility could reimburse three 
providers the maximum allowed amount of $25,000 or divide the $80,000 
amongst its dozens of providers and render the retention incentive 
ineffective. To properly utilize this incentive, Congress and VA must 
properly fund this program.
Recommendation #16: Require VA and VHA executives to lead the 
        transformation of HR, commit funds, and assign expert resources 
        to achieve an effective human capital management system.
    The VFW supports this recommendation. We often hear from VA medical 
facilities that they struggle to hire needed staff because of the 
cumbersome human resources (HR) process. Specifically, the outdated and 
ineffective rules and regulations that govern when and how VA can 
recruit possible candidates puts VA at a disadvantage when competing 
with the private sector to recruit high quality health care 
professionals.
    Secretary McDonald has made some progress in addressing this issue 
by deploying rapid process improvement workgroups which identify and 
resolve regulatory barriers that adversely impact the hiring process 
and improve an applicant's experience when applying for VA jobs. 
However, the VFW agrees with the Commission that VA H.R. systems and 
processes must be prioritized and improved. It is unacceptable for VA 
H.R. professionals to be required to operate 30 disparate IT systems. 
When H.R. is unable to do its job efficiently, VA medical facilities 
are not able to fill vacancies quickly, which leads to access problems 
that negatively impact veterans. It is also deplorable that VA's 
cumbersome H.R. rules and processes impede its ability to remove or 
demote wrongdoers.
                              eligibility
Recommendation #17: Provide a streamlined path to eligibility for 
        health care for those with an Other-Than-Honorable discharge 
        who have substantial honorable service.
    The VFW fully supports the recommendation to amend VA's current 
health care eligibility regulation and provide VA health care and 
benefits to veterans with other than honorable (OTH) discharges, if 
their overall service is deemed honorable. Under current law, a veteran 
who meets other eligibility criteria and has a discharge that is other 
than dishonorable is eligible for VA health care. However, VA's process 
for determining which veterans are considered to have an other than 
dishonorable discharge is flawed, and generally results in veterans who 
have anything less than an honorable discharge being denied benefits.
    This is a particular concern for veterans who served honorably in 
combat, but were administratively discharged upon returning home due to 
relatively small infractions, like missing formations or being charged 
with alcohol-related incidences. VA regulations do not consider 
discharges for minor offenses as dishonorable, if such veteran's 
service was otherwise honest, faithful and meritorious.
    Unfortunately, VA's process for determining eligibility is not 
consistent and often fails to properly account for a veteran's entire 
service. In their recent report, ``Underserved: How the VA Wrongfully 
Excludes Veterans with Bad Paper,'' Swords to Plowshares, the National 
Veterans Legal Service Program and the Veterans Legal Clinic at the 
Legal Service Center of Harvard Law School found that instead of 
granting OTH veterans the health care and benefits they have earned, VA 
has lumped them in with bad conduct and dishonorable discharges, which 
are reserved for servicemembers convicted of wrongdoing at a court 
martial--thus resulting in 90 percent of OTH veterans being denied the 
benefits and services they have earned.
    Without access to VA health care, those suffering from service-
related mental health injuries are left on their own to deal with their 
mental health symptoms, making recovery nearly impossible. The VFW 
supports amending VA's regulation to ensure veterans with OTH 
discharges who committed minor infractions but otherwise completed 
honorable service, receive full eligibility for health care and 
benefits. Additionally, VA must also ensure veterans who present to a 
VA medical facility with a medical condition that requires urgent or 
emergent medical attention, such as a veterans who shows signs of 
suicidal ideation, are not required to undergo a cumbersome character 
of discharge review before receiving lifesaving care. Veterans who are 
later determined to be ineligible for VA health care must be 
transitioned to other health care options, but veterans cannot be 
denied lifesaving care simply because VA rules require a flawed and 
time consuming character of discharge review process.
Recommendation #18: Establish an expert body to develop recommendations 
        for VA care eligibility and benefits design.
    In every past evaluation and change to the eligibility criteria for 
health care, access to care was increased to unserved populations of 
veterans, or eligibility was realigned to conform with an updated 
delivery model. With those two facts in mind, and understanding that 
the development of an integrated health care system will deliver care 
under a different model, the VFW supports the idea of studying access 
barriers based on current eligibility criteria while ensuring service-
connected, homebound and catastrophically disabled veterans do not 
incur barriers or delays in services or care. Additionally, the VFW 
would oppose any proposal to increase the health care cost shares for 
veterans.

    Mr. Chairman, this concludes my testimony. I will be happy to 
answer any questions you or the Committee members may have.

    Chairman Isakson. Thank you, Mr. Fuentes. We appreciate it.
    Last, but certainly not least, Vietnam Veterans of America, 
Mr. Weidman.

STATEMENT OF RICHARD WEIDMAN, EXECUTIVE DIRECTOR FOR POLICY AND 
        GOVERNMENT AFFAIRS, VIETNAM VETERANS OF AMERICA

    Mr. Weidman. Thank you very much, Mr. Chairman, for 
allowing us to be here today. I will deviate because much of 
the material I might have covered in a summary has already been 
covered by my distinguished colleagues to my right. So, I will 
concentrate just on a couple of things that we consider to be 
really important.
    The first has to do with Recommendation Number 17 and the 
Administration's non-concurrence with it. We understand their 
position, but it is really up to the Congress, at the first 
opportunity, to get emergency appropriation so we can move 
ahead to those people who have an OTH, or other-than-honorable 
discharge, most of them as a result of administrative 
procedures--never had access to counsel, never had a full 
record of court-martial, but rather were just pushed out as 
they were seen no longer to be useful.
    Vietnam veterans, we have a long history with that because 
that happened to many people at the end of the Vietnam War and 
even as it was going on. For kids--and I say ``kids''--who 
enlisted at 18 and got sent to Vietnam at 18\1/2\ or 19 and 
came home--they were on a 3-year enlistment, and the military 
service did not want them when they came home. They did not 
want to be there and they copped an attitude because of the 
experience in the boonies in Vietnam, so they got in trouble: 
sign here, son, and you can go home. So, they did, which has 
ruined many of their lives.
    Unfortunately, that pattern is still going on today from 
Fort Carson to bases in Texas to right here at Fort Belvoir, 
where people are being unfairly pushed out and labeled as 
``other than honorable'' simply because there is somebody in 
either NCO Corps or in the Officer Corps who has taken an 
active dislike to them.
    VVA has been very concerned about this ever since our 
inception. Many of us have been active in discharge upgrade 
services before VVA was founded, and we continue to be 
concerned with this thing. It has become more difficult over 
the years to get discharges upgraded, even when an objective 
person looking at it agrees absolutely that that discharge 
should be upgraded and they should have their benefits 
restored.
    We have filed several class action suits against DOD, and 
we certainly were assisted by former Senator and Secretary of 
Defense Chuck Hagel's memo. That has opened the door. With the 
lawsuit pressing, instead of a success rate of 4 percent, it 
has gone up to 45 percent before the Army Board.
    In terms of separation, the Secretary of the Navy, 
Secretary Mabus, has issued a directive that has helped 
dramatically in having Marines who should have their 
eligibility restored, and as well as Navy people. What we need 
is for Secretary Fanning and the Secretary of the Air Force to 
do the same thing.
    What is needed is to make sure that we have the money that 
is added into the budget as these things take hold. This is a 
group of people who are most at risk for suicide, particularly 
the younger ones; the older ones have already done so. It is 
something that the passage of the final DPAA, to make sure that 
the Fairness to Veterans Act is included in that, would be a 
huge step. I would stress that the leadership of this 
Committee, which we--on so many issues we greatly appreciate, 
Mr. Chairman, you and your colleagues and the Ranking Member's 
efforts, needs to be turned to getting an emergency 
appropriation so VA can be ready to handle it.
    The last, which is really merit--the thing I would just 
touch on, instead of going into detail because of limits of 
time, is the whole procurement recommendation. Given the 8 to 0 
Supreme Court decision handed out at the end of June in 
Kingdomware v. VA, it is--I cannot--everybody in this room 
knows how rare it is to have an 8-0 Supreme Court decision.
    They were absolutely clear about what must be done. The 
question is whether VA does it. Instead of concentrating on 
rearranging the structure, we need to look at what they are 
doing and how they are doing it, including the excessive 
reliance on the delegated authority for the Federal Supply 
Schedule.
    I will close there, Mr. Chairman. Once again, I deeply 
appreciate, on behalf of all of us at VVA, the sound leadership 
from this Committee, of both you and Senator Blumenthal. Thank 
you.
    [The prepared statement of Mr. Weidman follows:]
 Prepared Statement of Rick Weidman, Executive Director For Policy and 
            Government Affairs, Vietnam Veterans of America
    Good afternoon, Chairman Isakson, Ranking Member Blumenthal, and 
other Senators of this distinguished Committee. On behalf of VVA 
National President, as well as the members of Vietnam Veterans of 
America (VVA) and our families, I thank you for affording VVA the 
opportunity to testify today regarding the recommendations of the 
Commission on Care, and what the Department of Veterans Affairs has 
been doing to improve access for eligible veterans to avail themselves 
of the generally excellent health care that the VA provides.
    Let us begin with some facts:
     The Veterans Health Administration, the VHA, is an 
integrated managed care network, the largest in the Nation. Long before 
the ``scandal'' that led Congress to enact the Choice Act, a provision 
of which established the Commission on Care, the VHA availed veterans 
of care by community providers, when necessary or appropriate.
     VA medical centers provide for the most part ``one-stop 
shopping'' for primary and specialty care, something that is not 
afforded at most private-sector hospitals and healthcare facilities.
     The commission, you should note, acknowledges that the 
quality of care in VHA facilities is good to excellent and is in many 
areas superior to care from private hospitals or medical centers.

    Certainly, however, VVA does not quibble with the mission of the 
commission: to enhance and improve a healthcare delivery system that 
will ``provide eligible veterans prompt access to quality health 
care.''
    To the commission's credit, commissioners rejected the idea of 
privatizing VA healthcare. They nixed the idea of unfettered 
``choice,'' of giving eligible veterans the option of going to any 
private-sector healthcare providers of their choosing, with the VA 
footing the bills and being transformed, in effect, into a source of 
income. They would scrap the time and distance criteria for access to 
community care (30 days and 40 miles), one of the provisions of VACAA, 
the Veterans Access, Choice, and Accountability Act.
    The commissioners tripped up, however, in conceptualizing an 
entirely new governance structure, and in sublimating VA, healthcare 
facilities into an expansive community context dubbed the ``VHA Care 
System.'' Yes, VA clinicians should refer veterans to outside providers 
when and where appropriate to improve access as well as to provide care 
that VA clinicians are unable to deliver. However, no, the VA should 
not cede, as the commission recommends, the role of primary care 
clinician to non-VA personnel; this would be a critical misstep, 
undermining the integrity and managed care the VA offers.
    ``Foundational among the changes'' the commission seeks is 
``forming a governing board to set long-term strategy and oversee the 
implementation of the transformation process, and building a strong, 
competency-based leadership system.'' This concept is mistaken. The 
governing board that the commission envisions as necessary to achieving 
a ``bold transformation'' ignores reality. Their ``Board of Directors'' 
would be a paper tiger that, without the power of the purse, can only 
recommend, not appoint or institute, thus making it a board of 
advisors. And veteran service organizations and veteran leaders in 
effect already function as an informal board of advisors on both the 
national and local levels--consider the Independent Budget, for 
instance. The VA would have far fewer perceptional problems if it 
acknowledged this and worked in concert with VSOs as a matter of 
course, seeking and embracing our input at the beginning of a process, 
not pro forma near its conclusion.
    Not all of the commission's recommendations veer away from logic 
and viability. There is, certainly, a need for strong, sustainable 
leadership at the top, locally as well as nationally. In fact, it has 
been the failure of leadership that has gotten the VA into hot water 
with you in Congress and in the media, with individual veterans and the 
public, in the first place.
    In addition, as you are aware, the commission's recommendations for 
transformative change in healthcare delivery are not intended as an 
immediate palliative; rather, the charge of the commission was to 
envision what the VA healthcare delivery system should look like in 20 
years, and to provide a blueprint on how to get there.
    Before I offer VVA's analysis of each of the commission's 18 
recommendations, I do want to publicly praise the efforts of the 
commissioners for the sense of purpose they brought to the task. In 
addition, I want to particularly applaud the strong and steady 
leadership of commission chair Nancy Schlichting, and the commitment 
and expertise of the staff who I know labored long and hard to produce 
the commission's final report.
         redesigning the veterans' health care delivery system
The VHA Care System/Recommendation #1
    The fundamental problem with the commission's conceptualization for 
the future of VA healthcare delivery commences in the language of this 
initial recommendation, which calls for `` . . . community-based health 
care networks'' that will ``integrate health care within communities.'' 
This would essentially fold VA-provided health care into a wider 
community-oriented network of providers.
    The Veterans Health Administration already is an integrated managed 
care network that does in fact avail veterans of care by community 
providers when called for. Individual failures in medical practice as 
well as access to care, when they occur, have been highlighted in the 
media which, for the most part, do precious little investigative 
reporting on systemic problems in VA health care delivery. (Nor do they 
cover many of the positives in VA health care, e.g., making every 
veteran patient afflicted with hepatitis C eligible to receive the 
medication that can now cure this potentially fatal disease.) Now, the 
illumination of issues revolving around management and medical practice 
fulfills the oversight and investigations responsibility of Congress. 
Many times, however, the glare of the spotlight focuses on specific 
problems, enlarging them, undermining the basic integrity of the VA 
healthcare system and the clinicians, administrative and housekeeping 
personnel who are its essence. Problems in other healthcare facilities 
throughout the Nation are not subjected to partisan political punditry, 
are far less transparent, and do not trigger the same public scrutiny 
and condemnation as VA health care does.
    Perhaps more basic to the relationship between clinician and 
patient is the assumption that most veterans want to choose their 
primary and specialty healthcare providers. This precept is 
fundamentally flawed. If a veteran needs to see a specialist, s/he 
often has little ability to divine on their own who to go to and must 
rely on the recommendation of their primary care provider. In the brave 
new world envisioned by the commission, the veteran can ``choose'' to 
see the ``credentialed'' specialist of his/her choice. Does anybody 
really think that this will enable a veteran to get same-day service 
from a busy clinician? Alternatively, provide better care than s/he can 
receive at a VA medical center or community-based outpatient clinic? On 
the other hand, save the system money?
    In addition, consider the potential for this: if a patient who is 
covered by private health insurance chooses to be treated by a 
physician not in the network assembled by her health insurer, she has 
to pay that doctor out of pocket and fill out a claim form to receive 
some reimbursement from her insurer. Yet what if that veteran wants to 
go to a clinician whom the VA has not credentialed? Will he have to 
shell out his own money, even if he has a disability rated at, say, 70 
percent? Will that veteran complain to his Member of Congress, who will 
then demand from the local VHA Care System why Dr. X has not been 
``credentialed?'' It is not difficult to foresee a bureaucratic 
headache of major proportions.
Clinical Operations/Recommendation #2
    This recommendation negates the acknowledged quality of VA health 
care. To ``enhance clinical operations through more effective use of 
providers and other health professionals'' in effect charges the VA 
with clinical mismanagement. The core of the problem, which the 
commission acknowledges, ``starts with inadequate numbers of 
providers.'' This, however, is a problem not limited to VA health care. 
There is something like a 90,000-clinician shortage across the country, 
a situation that is particularly acute in rural and remote areas as 
well as inner cities.
    The report nitpicks, e.g., ``[f]or example, doctors and nurses 
often escort patients; clean examination rooms; take vital signs; 
schedule; document care; and place the orders for consultations, 
prescriptions, or other necessary care that could be done more cost 
effectively by support staff.'' Just who do the commissioners foresee 
writing prescriptions? Alternatively, ordering consultations? While it 
is true that if you have seen one VA medical center, you have seen one 
VA medical center, but . . . doctors escorting patients? Alternatively, 
cleaning exam rooms? (Attempts to locate these allegations through the 
report's footnotes proved well nigh impossible, e.g., there is no page 
95 in the cited document.)
    The commission does, however, offer some sensible, and well-
considered concepts, e.g., that VHA adopt policies to allow health 
professionals ``to make full use of their skills;'' and that ``VHA 
continue to hire clinical managers and move forward on initiatives to 
increase the supply of medical support assistants.''
Recommendation #3
    Citing uncertainties among VA patients and clinicians alike as to 
just what VHA's policy for resolving clinical disputes is--there 
appears to be not one but 18 different policies, one in each Veterans 
Integrated Service Network, or VISN--it is hard to disagree with the 
commission that VHA ought to ``convene an interdisciplinary panel to 
assist in developing a revised clinical-appeals process.'' Achieving 
this, however, requires neither a whole new system of governance nor a 
revamped ``care system.''
Recommendation #4
    Here is another sensible and potentially viable recommendation: 
consolidating idea and innovation portals, and best practices and 
continuous improvement efforts, in the currently underutilized Veterans 
Engineering Resource Center. The commission imagines the VERC as having 
considerable input in properly aligning ``system wide activities [that] 
require substantial change''--human resource management, contracting, 
purchasing, information technology.
Recommendation #5
    Ever since President Harry Truman issued the Executive Order in 
1948 that integrated the military services, the Armed Forces have been, 
for the most part, a meritocracy that has gradually decreased if not 
fully eliminated racial, ethnic, and religious disparities in 
assignments and promotions. As a result, veterans today are perhaps the 
single most diverse assemblage of Americans in the Nation.
    There is certain hollowness to this recommendation in that it 
assumes, with little empirical evidence, that significant healthcare 
disparities based on race and ethnicity exist in the VA healthcare 
system. No one will disagree that such disparities are unacceptable and 
must be eliminated where it might exist. The commissioners' assumptions 
appear to be based, for the most part, on a 2007 document, Racial and 
Ethnic Disparities in the VA Healthcare System: A Systematic Review. 
This work, prepared by investigators with the Portland VA Medical 
Center for the VHA's ``Health Services Research & Development 
Service,'' is useful, and mirrors other studies that have similar 
results showing disparities. This recommendation warrants universal 
endorsement, and points up the need for VHA to regularly monitor 
clinician behavior to ensure that such systematic bias is eliminated.
    The VHA must make health care equity ``a strategic priority,'' and 
should ``increase the availability, quality, and use of race, 
ethnicity, and language data to improve the health of minority veterans 
and other vulnerable veteran populations with strong surveillance 
systems that monitor trends in health status, patient satisfaction, and 
quality measures.'' A new system of governance need not be put in place 
to achieve this.
    However, there is need to eliminate the foolish bifurcation of the 
chains of command between operations and policy. This has led to too 
many people at the VA at the VAMC, VISN, and national level who do not 
deliver care directly. Those who do not engage directly in patient care 
need to be re-educated, and out to work directly providing medical care 
to veterans.
Facility and Capital Assets/Recommendation #6
    The commission rightfully cites the need for ``transformative 
changes to the VHA's capital structure.'' It notes that in many areas 
VA healthcare facilities are housed in aging edifices with outdated or 
outmoded physical plants. ``VHA not only lacks modern health care 
facilities in many areas, but generally lacks the means to readily 
finance and acquire space, to realign its facilities as needed, or even 
to divest itself easily of unneeded buildings. . . . It is critical 
that an objective process be established to streamline and modernize 
VHA facilities . . . to ensure the ideal balance of facilities'' within 
each of the localized networks conceptualized by the commission.
    The commission envisions its new governing board as the overseer 
that will make critical decisions ``in alignment with system needs.'' 
Moreover, here the paper tiger effect of the ``Board of Directors'' 
comes into sharp focus. Because all of this is dependent on funding, 
and it is the President who submits a budget based on the 
recommendations of the Secretary of Veterans Affairs, and it is you in 
Congress who add funding or cut dollars from the department's capital 
budget. It is the local VA medical centers that note their construction 
needs. Placing a new governing board between local entities and the 
overall ``VHA Care System'' will likely have the effect of adding yet 
another layer of bureaucracy, with Congress remaining as arbiter of how 
much funding goes into what capital projects. (Think back, if you will, 
to the VA's CARES program, which attempted to address this issue. To 
achieve its goals, $1 billion was supposed to be requested and 
allocated each year over an initial period of five years. Alas, this 
was not to be, as fiscal restraints imposed by both the Executive 
branch as well as the Congress, even as we spent hundreds upon hundreds 
of billions on the wars in SE Asia, scuttled CARES.)
    The commission also offers that the ``facility and capital asset 
realignment process'' be modeled after the wildly unpopular but perhaps 
necessary DOD Base Realignment and Closure Commission (BRAC) process 
``as soon as practicable.'' With Congress not particularly enthusiastic 
about the BRAC process for eliminating outmoded or unneeded DOD 
facilities in CONUS and perhaps across the globe, it seems to be 
unlikely that legislators will embrace this concept to shutter VA 
facilities.
Information Technology/Recommendation #7
    Here is another recommendation the basis of which cannot be 
challenged: `` . . . VA requires a comprehensive electronic health care 
information platform that is interoperable with other systems; enables 
scheduling, billing, claims, and payment, and provides tools that 
empower veterans to better manage their health.'' VA senior management 
have been grappling with IT issues for years, nudged by Congress to 
devise a system that allows for a ``seamless transition'' of medical 
records and information between DOD and VA, and among the trio of 
administrations within the VA. Achieving this interoperability, as with 
many other initiatives, demands mutual commitment and adequate funding, 
and here again this boils down to a matter of funding. Can anyone, 
including the legislators from both parties in this room today; 
forecast a scenario in which Congress abrogates its constitutional 
authority by ceding the power of the purse to a ``board of directors?''
Supply Chain/Recommendation #8
    The commission savages the ability of VHA to ``modernize its supply 
chain management and create cost efficiencies because it is encumbered 
with confusing organizational structures, no expert leadership, 
antiquated IT systems that inhibit automation, bureaucratic purchasing 
requirements and procedures, and an ineffective approach to talent 
management.'' The problems in this realm, the commission has concluded, 
are ``systemic. The organizational structure is chaotic, contracting 
operations are not aligned to business functions, and processes are 
poorly constructed, lacking standardization across the organization.'' 
Because of the inadequacy of VA IT systems, the commission charges, 
``VHA is unable to produce high-quality data on supply chain 
utilization and does not effectively manage the process using the 
insights such data could provide.''
    The commission's solution to this morass? Establish the position of 
VHA chief supply chain officer, to be compensated ``relative to market 
factors,'' the first step in achieving ``a vertically integrated 
business unit extending from the front line to central office.'' Again, 
if this recommendation is embraced by Congress and VA/VHA leadership, 
there is no reason why it cannot be implemented under VHA's current 
configuration. However, VVA is extremely skeptical of the current 
occupants of key positions in the VA doing anything to really ``fix'' 
problems with procurement. Their idea is to push more and more 
procurement onto the delegated (by the General Services Administration 
(GSA) authority VA Federal supply schedules, claiming that this saves 
money. However, there is absolutely no empirical evidence for this 
claim. The fact that VA continues push ``strategic sourcing'' as an 
answer to most of their problems is akin to putting lipstick on the 
ugliest pig in the pig pen and proclaiming this ``marvelous'' pig is 
answer to all of VA's procurement woes. In fact, the pig is still a 
pig, and procurement decisions at VA are still messed up.
                 governance, leadership, and workforce
Board of Directors/Recommendation #9
    Here is the crux of the commission's report. It is based on nuggets 
of reality, e.g., the ``short tenure of senior political appointees 
[and] each administration's expectations for short-term results.'' The 
solution proffered by the commission: ``Establish a board of directors 
to provide overall VHA Care System governance, set long-term strategy, 
and direct and oversee the transformation process.''
    It is not that the VA currently is so consumed by short-term 
considerations that it cannot look past the next election. Every few 
years, the VA puts out another five-year strategic plan, although these 
plans are little more than a waste of paper as well as hundreds of 
staff hours engaged in meetings and thinking through and writing up 
real issues and perceived goals.
    The commission cites a 2015 Booz Allen Hamilton report that 
indicted weak governance as one of the ``indirect causes'' of the 
Phoenix VAMC wait-time ``scandal.'' The ``gap in leadership continuity 
and strategic oversight from one executive leadership team to another'' 
contributed significantly to wait-time problems. The recommendation of 
the commission: the creation of an 11-member board of directors 
accountable to the President, ``with decisionmaking authority to . . . 
set long-term strategy.'' Among its responsibilities, and its powers, 
the board would ``recommend a [C]hief of VHA Care System (CVCS) to be 
approved by the President for an initial 5-year appointment . . . [and] 
be empowered to reappoint this individual for a second 5-year term, to 
allow for continuity and to protect the CVCS from political 
transitions.'' The recommendation goes on to note: ``If necessary, the 
CVCS can be removed by mutual agreement of the President and the 
governing board.''
    Yet it is the role of the President to nominate, and the authority 
of the Senate to approve, the appointment of the Under Secretary for 
Health, the current iteration of the Commission on Care's ``chief of 
VHA Care System.'' Would you seriously consider abrogating your 
responsibilities and hand over this authority to a board of directors?
    Nowhere does the commission come to grips with the costs of 
operating such a board. Will the directors be full-time, quasi-
governmental employees? On the other hand, would they have other jobs 
and meet on a monthly, bi-monthly, or even quarterly basis? What staff, 
with what capabilities, will be required to do the work of the board? 
What might be the costs of operating the board? Just what authority, 
and how much power, would the board have in hiring and firing, in 
disciplining workers, in setting policies and allocating funds?
    In essence, Congress, and specifically the Veterans' Affairs 
Committees in the House and Senate, is the de facto directors of the 
Department of Veterans Affairs. Creating a board of directors, even one 
with a limited power of the purse, is not something that the Congress 
or the veterans organizations or military organizations are likely to 
embrace. VVA, for one, rejects this idea.
Leadership/Recommendation #10
    Here, the commission sees VHA healthcare leaders being ``aligned at 
all levels of the organization in support of the cultural 
transformation strategy and [held] accountable for this change.'' It 
asserts that ``VHA has among the lowest scores in organizational health 
in government. For the past decade, VHA's executives have not 
emphasized the importance of leadership attention to cultural health, 
and it has not been well integrated in training, assessments, and 
performance accountability systems.'' (There is no footnote citation 
for the source of this allegation. Nor is there an explanation of just 
what ``cultural health'' is supposed to be.) Next to the creation of a 
board of directors, the need for strong, sustained leadership is 
integral not only to the rest of the commission's 20-year plan, but is 
a necessity in the current construct of the VHA as well.
Recommendation #11
    No argument with the premise here, that ``VHA, like any large 
organization, requires excellent leaders to succeed. Succession 
planning and robust structured programs to recruit, retain, develop, 
and advance high potential staff are essential to maintaining a 
pipeline of new leaders.'' The commission asserts that ``VHA does not 
use a single leadership competency model, and what it does use is not 
specific to health care or benchmarked to the private sector. VHA also 
does not use competency models as a tool to establish standards for 
hiring, assessment, and promotion.''
    Among its recommendations is that Congress must authorize ``new and 
expanded authority for temporary rotations and direct hiring of health 
care management training graduates, senior military treatment facility 
leaders, and private not-for-profit and for-profit health care leaders 
and technical experts.''
    Another is the establishment of ``two new programs. The first is to 
create opportunities for VHA physicians to gain masters-level training 
in health care management to prepare them to lead a medical facility. 
Second, VHA should work to create rotations in VHA for external 
physicians who are completing graduate health care management 
programs.''
    What the commission advocates here, and what was a key discussion 
point during its public meetings, is the need to attract, and to train, 
the best and the brightest, who would serve for a set term or the long 
term, and who would be recompensed according to the market in a 
particular catchment area. To achieve this, Congress must empower the 
VHA to offer competitive salaries and benefits to attract the most 
qualified candidates, both from within and from out of the VHA 
hierarchy.
    Again, Congress needs to rethink compensation for medical 
professionals so that the VA can be competitive in hiring in specific 
regions of the country. Yet this can be done without introducing a 
whole new governance structure to VA health care, and it might actually 
have a salutary effect on attracting, and retaining, the clinicians 
needed to enable the VA to handle a growing, aging, and medically 
complex cohort of veterans.
Recommendation #12
    Here, the commission targets the confusing model of organization 
that afflicts the smooth functioning of the VHA. ``VHA currently lacks 
effective national policies, a rational organizational structure, and 
clear role definitions that would support effective leadership of the 
organization.'' The commission charges that the ``responsibilities of 
VHA Central Office (VHACO) program offices are unclear, and the 
functions overlap or are duplicated. The role of the VISN is not clear, 
and the delegated responsibilities of the medical center director are 
not defined.''
    This situation, to the extent that it is an impediment to the 
effective functioning of the VHA on a national level as well as the 
operation of individual VA medical facilities, can be corrected by 
competent, creative, inspired leadership. It does not require the 
institution of a whole new system of governance, although the 
operations/policy split must be eliminated in order to be able to hold 
those in leadership positions accountable. It needs to attract, and 
retain, more leaders in the mold of Dr. David Shulkin, the current 
Under Secretary for Health; in fact, it needs to retain Dr. Shulkin 
himself, no matter who is elected less than 50 days from now.
    The commission, however, does not recommend the scuttling of the 
VISNs, or the establishment of regional cohorts of VA medical centers, 
which the current VHA leadership appears to be contemplating. However, 
the commission does, to its credit, call for the establishment of 
``leadership communication mechanisms within VHACO and between VHACO 
and the field to promote transparency, dialog, and collaboration.'' 
This should address a persistent problem that plagues the VHA: too 
often, a directive flows from the Undersecretary to VISN and VAMC 
leadership, but does not filter down to the clinicians and support 
personnel who need to be informed. A case in point: the excellent 
``Military Health History Pocket Card for Clinicians'' rarely gets 
circulated to the clinicians for whom it was created and updated. Nor 
does it get disseminated outside the VA, to clinicians who treat the 
majority of veterans, yet who get some of their training in VA medical 
centers. Better internal communications can remedy this situation, and 
can be instituted if the top management at the VHA prioritizes the need 
for vastly improved lines of communication.
Recommendation #13
    This is essentially an extension of the previous recommendation. It 
assumes, however, that ``core metrics'' for ``organizational 
performance measurement'' in the private sector are superior to any 
metrics and measures used by the VA. It is rife with linguistic 
pabulum. Still, its objective must be acknowledged: ``VHA must 
effectively measure outcomes and hold leaders accountable for 
improvement.'' Too often, an ineffective or venal medical center 
director is transferred, or even promoted, rather than be offered the 
opportunity to resign, or be fired.
Diversity and Cultural Competence/Recommendation #14
    The commission deserves kudos for its acknowledgment of the need 
for ``developing the cultural and military competence of [VHA] 
leadership, staff, and providers, as well as measure the effects of 
these efforts on improving health outcomes for vulnerable veterans.'' 
Practitioners in VA healthcare facilities cannot help but gain an 
understanding of the unique healthcare needs of their veteran patients. 
The commission is on target in asserting that ``cultural and military 
competency'' must be among the criteria for ``credentialing'' external 
clinicians to treat veterans.
Workforce/Recommendation #15
    The commission calls for the creation of ``a simple-to-administer 
personnel system, in law and regulation, which governs all VHA 
employees, applies best practices from the private sector to human 
capital management, and supports pay and benefits that are competitive 
with the private sector.'' There can be little argument that ``VHA 
lacks competitive pay, must use inflexible hiring processes, and 
continues to use a talent management approach from the last century.'' 
Hence, the recommendation that ``Congress create a new alternative 
personnel system . . . in collaboration with union partners, employees, 
and managers . . . that applies to all VHA employees and falls under 
Title 38 authority . . . and improves flexibility to respond to market 
conditions relating to compensation, benefits, and recruitment.''
    On one hand, this makes eminent good sense: to obtain and retain 
top professionals in both medical treatment and hospital 
administration, the VA healthcare system needs to be competitive with 
the incentives in the private sector. In addition, certainly, VHA's 
ability to hire qualified staff cannot continue to be hamstrung by 
bureaucratic constraints and ineptitude. While many clinicians choose 
to work at the VA because of job security and protected pensions, 
others also feel a calling to use their skills to care for the men and 
women who have served the Nation in uniform, many of whom have special 
needs derived from their wartime experiences.
    On the other hand, however, Congress quite likely will be skeptical 
at best about setting precedent by creating an alternative personnel 
system. Convincing you in Congress to in effect turn the VHA into a 
quasi-governmental entity while continuing to fund its operations will 
be the ultimate hard sell. It was the wait-time access issue, a long-
time reality in many VA medical centers, which raised the ire of 
Congress, not the quality of health care delivered by VAMC personnel. 
Integrating additional healthcare providers into the VA system, where 
appropriate and when needed, is part of the rejuvenation of the VHA 
under the current undersecretary. This makes sense.
    The conceptualization of the commission to create a new entity, one 
in which VA and private-sector clinicians, many with similar skill 
sets, in essence ``compete'' to treat veterans will not materially 
improve health care for those veterans who obtain their care at a VA 
facility. It is likely to dramatically increase the costs of providing 
care; and it is likely to lead to the underutilization of certain VA 
medical centers and community-based outpatient clinics and the 
subsequent shuttering of several of them, with the consequent turmoil 
in staff morale and, eventually, the loss of tens of thousands of jobs. 
Still, the VA must resolve a situation that continues to plague it: 
``Hiring timelines [for medical professionals] can span 4-8 months 
compared to private-sector hiring that takes between 0.5 and 2 
months.''
Recommendation #16
    This, too, is more or less an extension of the previous 
recommendation. However, it is difficult to quibble with aligning ``HR 
functions and processes to be consistent with best practice standards 
of high-performing health care systems.'' You should, however, reject 
the underlying assumption of the commission that VA clinical staff 
provides less efficient, poorer quality health care than private 
``high-performing health care systems.''
Eligibility/Recommendation #17
    Finally, a relatively radical recommendation that warrants 
congressional consideration: ``Provide a streamlined path to 
eligibility for health care for those with an other-than-honorable 
discharge who have substantial honorable service.'' The commission 
recognizes, rightfully, that some former servicemembers in fact ``have 
been dismissed from military services with an other-than-honorable 
(OTH) discharge because of actions that resulted from health conditions 
(such as Traumatic Brain Injury [TBI], Post Traumatic Stress Disorder 
[PTSD], or substance use) caused by, or exacerbated by, their 
service,'' thus rendering them ineligible for VA health care and other 
benefits. ``This situation leaves a group of former servicemembers who 
have service-incurred health issues (namely mental health issues) 
unable to receive the specialized care VHA provides''--care that they 
vitally need.
    The commission recommends that ``VA revise its regulations to 
provide tentative eligibility to receive health care to former 
servicemembers with an OTH discharge who are likely to be deemed 
eligible because of their substantial favorable service or extenuating 
circumstances that mitigate a finding of disqualifying conduct.'' This 
may not be simply a matter of the VA revising regulations--Congress 
will need to enact legislation to enable the VA to treat these 
veterans--but it is an idea worthy of merit, one that the VSO and MSO 
communities should grab the baton and run with.
Recommendation #18
    Prefacing this recommendation, the commission acknowledges that the 
capacity of the VA to provide care ``is constrained by appropriated 
funding.'' In its recommendation that Congress or the President charge 
some entity with examining the ``need for changes in eligibility for VA 
care and/or benefits design, which would include simplifying 
eligibility criteria,'' the commission opens the door to initiating 
pilot projects ``for expanded eligibility for nonveterans to use 
underutilized VHA providers and facilities, providing payment through 
private insurance.''
    The 1996 eligibility reform act created eight ``priority'' groups 
of veterans eligible for VA health care. Priority 7 and Priority 8 
veterans, who are not afflicted with service-connected conditions, must 
agree to a co-pay for the care and prescription drugs they receive from 
the VA. They account for around 40 percent of third-party collections 
by the VA. In addition, the Vet Centers do, as a matter of course, 
treat the family members of veterans, a necessity to successfully treat 
many of the mental health maladies suffered by the veterans they love.
    To open a beleaguered health care system to non-vets seems counter-
productive. In addition, it also would dilute the very essence of what 
should be a veteran-centric system. Because there is a certain 
specialness inherent in receiving care in a place where your service is 
acknowledged, where an array of conditions--traumatic amputations, 
spinal cord injuries, mental health afflictions--are understood, where 
you are among your peers. On this, a monetary value cannot be placed.
                               conclusion
    The commission acknowledges the raison d'etre for its own creation 
by the same act of Congress that initiated the so-called Choice 
Program: the issue of access. Yet it also acknowledges, ``Access is not 
a problem for VHA alone: delivering timely care is challenging for many 
civilian providers and health systems, in part due to the 
unavailability of providers in some communities and national shortages 
of some categories of health professionals.''
    The commission notes the key question with which Congress must 
grapple: Does the VA healthcare delivery system, despite the wait-time 
scandal, require ``fundamental, dramatic change--change that requires 
new direction, new investment, and profound reengineering?'' This is a 
question VVA and other VSOs and MSOs and veterans across the country 
need to consider: can the VA, given the impetus generated by the issue 
of access, fix itself, or does it require a radical reformation, one 
that can conceivably result in its demise?
    We believe that the VA, specifically the Veterans Health 
Administration, can fix itself and in fact is fixing itself, in great 
measure because of the impetus generated by passage of VACAA. We would 
hope that you in Congress would monitor what VA leadership is 
accomplishing; and that members of the media who cover veterans issues 
would focus less on dramatically highlighting the problems and more on 
what is being done to correct them. When the VA messes up, by all means 
report it and let Congress call VA leadership on the carpet. However, 
report, and so acknowledge, some of the good things that the VA has 
been doing, e.g., making what is now a cure for hepatitis C available 
to all veterans enrolled in the VA healthcare system. Thousands of 
lives are being saved, and this, too, ought to be reported.

    Senators, Vietnam Veterans of America thanks you for your attention 
to our position and our conclusions vis a vis the recommendations of 
the Commission on Care. In addition, we thank you for all that you have 
done, and are doing, for veterans and our families. I would be pleased 
to respond to any questions you might care to put to me.

    Chairman Isakson. Thank you very much, Mr. Weidman. We 
appreciate your input and your time.
    Mr. Steele, with emphasis added at the end of your 
testimony, you said, what do we do, addressing the appeals 
process and appeals reform in terms of the Veterans 
Administration. I will answer that question for you.
    My good friend, Senator Blumenthal, as I understand it, has 
introduced a version of his veterans appeal bill sometime 
today. Chairman Miller from the House has introduced one. We 
passed a demonstration project in the Committee, a proposal by 
Senator Sullivan. Also, the Obama Administration, Denis 
McDonough and his people at the Administration, have been 
working for about 3 months on an appeals reform bill.
    Am I correct, Mr. Secretary?
    Secretary McDonald. Yes, sir.
    Chairman Isakson. The question then is, what do we do? 
Well, what we do is: we have got to get everybody that has got 
an interest in getting this done getting their heads together, 
including getting out of pride of authorship and getting it 
done. That is how it is going to get done.
    I am going to make a suggestion here. The 445,000 pending 
appeals that we have right now in backlog, we should not do 
anything to reform the appeals process in the future until we 
tell these people how in the world we are going to give them an 
answer from the past. I am serious as a heart attack about 
that.
    I think one of the things we need to do is to make sure we 
are reforming it so it does not happen again, but we do not 
need them being in a black hole and never getting an answer for 
the appeals that have long since gone past the time they should 
have gotten it.
    I hope that I can help be a--I do not have a dog in this 
fight. My desire is to fix it, but I do not have a--I am not 
squiring a bill around and saying it is my way or the highway. 
I will be glad to work with the Ranking Member, with the 
Secretary, with Denis McDonough, with all our veteran service 
organizations, Chairman Miller in the House. Let us find a way 
to find the 80 percent we agree on and make a deal rather than 
always worrying about the 20 percent we do not find agreement 
on.
    When we do it, we have to make sure the people who have 
already been left behind in the appeals process get an answer 
to the question they ask, which is the same one you do: when? 
So, I think that is the answer to your question.
    Mr. Steele. Thank you.
    Chairman Isakson. Ms. Augustine, did I correctly hear you 
say that you all were opposed to Recommendations 1, 9, and 17?
    Ms. Augustine. Sir, we are opposed to the external primary 
care provider recommended in Recommendation 1. We are opposed 
to Recommendation 9. We support Recommendation 17, which offers 
a streamlined path to eligibility for other-than-honorable 
discharges.
    Chairman Isakson. OK. I got two out of three right. That is 
pretty good. [Laughter.]
    What is your organization's position on the Veterans First 
bill?
    Ms. Augustine. Sir, we support many of the provisions 
within the Veterans First bill, but we strongly oppose the pay 
for that has been offered for the bill, as we publicly stated 
and the 30,000 messages from our members to Congress have also 
echoed.
    Chairman Isakson. Well, let me offer--see, I heard that in 
the testimony, the reference to the ``do not take away any 
benefits,'' and I would like to make a suggestion to all of 
you. When we are trying to address the concerns that all of you 
bring to us to improve the benefits to our veterans and make 
the VA work better, we have to find ways to pay for 
improvements in the future.
    That does not mean we want to take money out of Richard 
Blumenthal's pocket as a veteran, or out of my pocket as a 
veteran, or anybody. But it may mean from time to time, just as 
we are going to have to do with Social Security and other 
things in terms of entitlements, we have to reform eligibility 
in the future to pay for eligibility in the present.
    It is very difficult for us to move forward if, out of 
right field, we get an objection that does not give us fair 
warning and a chance to explain ourselves, which is what 
happened on Veterans First in that particular situation.
    I just want to memorialize for the public and the record, I 
sit here as Chairman--and think Richard is the same, as Ranking 
Member--we are ready anytime, any place, anywhere, if somebody 
thinks we are taking away something to hurt a veteran--because 
we are never going to intentionally do that, but we also want 
to take a holistic approach and look at where we are putting 
together the money for the future to deal with the challenges 
of the future. Is that fair enough to say?
    Senator Blumenthal. Well, Mr. Chairman, I think as long as 
we are memorializing, I should state for the record my own view 
that there really should be no requirement as to a pay for when 
we are taking about benefits for veterans. That is simply a 
matter of principal with me. I recognize that the majority has 
a somewhat different position, but there is no requirement in 
law or policy, so far as I know, that we could not go to the 
floor and ask for a budget point of order. I think it would 
pass and I am prepared to support that effort.
    I will continue looking for other pay fors, if that is a 
requirement, outside of veterans programs, because I believe 
that the Veterans First bill is a dramatic and historic step 
forward, and any additional funds required to support it should 
come from non-veterans programs. You and I have worked together 
very collegially in formulating this bill, and I hope we can 
continue to so that before it passes we will find alternatives.
    I really do appreciate your leadership, Mr. Chairman. You 
and I have spent many, many hours in seeking to address this 
dilemma, and I know you have done it in good faith. This bill, 
hopefully, will pass in an even better form than what we have 
right now.
    Chairman Isakson. I appreciate those comments and subscribe 
to them, but my point I am trying to take to the VSOs is this: 
if you see us doing something that you have an objection to or 
perceive there might be a benefit challenge to, come to us 
first--I am talking about ``us'' being Senator Blumenthal and 
myself--and let's see if we, first of all, can make sure we 
understand what change we are making and work together to get 
it changed, because a lot of times one little cog in the 
machine can stop everything else from happening because we just 
did not address it and talk about it. That is the main point.
    I agree with everything he said, but who is in charge right 
now requires us to put a pay-for on the floor. We can go to the 
floor for UCs, but since we have the requirement we ought to 
try to first see if we cannot find a way to meet the 
requirement before we decide we have got a battle going on. 
That was my main point.
    Senator Blumenthal. And hopefully meet that requirement 
outside the----
    Chairman Isakson. And that is where we are working----
    Senator Blumenthal [continuing]. Outside the VA----
    Chairman Isakson. Right.
    Senator Blumenthal [continuing]. Programs, the VA mission, 
and the VA budget.
    Chairman Isakson. Precisely.
    I am sorry to have taken so much time but I wanted to--I 
think both those points need to be addressed both in terms of 
let's get this appeals done, let's get it worked out, and let's 
make sure we do not leave behind the 445,000 that are waiting. 
And let's make sure that in the future, when we have 
differences on benefits, we talk about them first before we 
declare war on each other and end up slowing us down from 
making progress.
    With that said, I am going to go to my distinguished 
Ranking Member, Senator Blumenthal.
    Senator Blumenthal. Thanks, Mr. Chairman.
    I want to ask about the board of directors. I apologize; I 
was not in the room for some of your testimony, but I have read 
it. I have taken from that testimony that there seem to be very 
broad reservations--perhaps I should say opposition--to the 
idea of a board of directors, for very understandable and well-
merited reasons.
    Ms. Augustine, you have made the point that it is an 
additional bureaucracy and that, in fact, it diminishes, 
potentially, accountability. I think, Mr. Fuentes, you made 
some--this point has been made by many of you. Have I correctly 
interpreted your views?
    Ms. Augustine. Yes, sir.
    Senator Blumenthal. In terms of the other recommendations, 
if each of you could just give me what you regard as the most 
important recommendations that you have supported--in other 
words, not that--I understand that you have opposed some, but 
in terms of your finding merit in these recommendations.
    I do not want to put you on the spot here, but just to kind 
of cut through the really excellent testimony that you have 
offered--it is very complete, excellent, but just in terms of 
what you regard as the most important of the recommendations 
you have supported.
    Ms. Ilem. I will go ahead and take a--go first on that one.
    I think the modernization--Recommendation Number 7 of VA's 
IT system is so inclusive of everything that--you know, 
regarding the disparities that exist and have been well-
documented with the scheduling system and so many other parts 
of what today is really modernized health care. Without that 
there cannot be, within the integrated networks, that clear, 
seamless access between the community provider and VA.
    I think that one is probably the largest one that impacts 
on so many other things. If that were resolved and really try 
to tackle that one first and foremost, many of the other issues 
would be automatically resolved within that one.
    Senator Blumenthal. Thank you.
    Commander Campos. I would like to add that in terms of--I 
think this report--it has been clear to us that the report has 
been provided in whole, and if you start piecemealing it, you 
are not going to get the results of the recommendations going 
forward.
    For the sake of answering the question, I think, from our 
perspective, that nothing can really happen--real cultural 
change, transformation will not occur without an investment in 
leadership and the human capital management system.
    Mr. Fuentes. Senator, I would like to echo the importance 
of some of these recommendations that have already been 
mentioned, but I do want to add that Recommendation Number 1, 
although we do not support exactly how it is written, the need 
to reform the way that VA purchases care and how you integrate 
the private sector into the delivery-of-care model is vitally 
important.
    As was discussed when the Secretary was testifying the 
Choice program is due to expire. There is an urgent need in 
reforming how VA reimburses emergency room care.
    That is certainly vitally important, but also how VA 
expands and develops its capital infrastructure is also vitally 
important--Number 6--because no matter how many VA providers 
you are able to hire, you really need somewhere to put them. 
The way it is done now really needs to be reformed.
    Ms. Augustine. I would echo the comments from my partner 
from DAV that Recommendation 7 is vitally important to every 
other recommendation.
    Modernization's impact on the VA, as we look at integrating 
a network of care that expands beyond the VA, as we look at 
integrating better human capital management programs, that all 
ties back to IT. Ensuring that the IT infrastructure can handle 
those changes and can meet the needs of the VA is vitally 
important to the success of transforming the VA.
    Senator Blumenthal. Thank you.
    Mr. Steele. I will conclude by just saying stable 
leadership. The VA needs to find a way and Congress needs to 
find--we need to find a way to incentivize top performers like 
Dr. Shulkin and Mr. McDonald to serve our veterans--stable 
leadership.
    Senator Blumenthal. Did you have anything, Mr. Weidman?
    Mr. Weidman. The continuity of leadership is a problem. 
Whether through statute or through practice, which, in fact, it 
could be done, particularly at the Under Secretary level on up, 
is something that is really very difficult, because when people 
come in for a relatively short period of time--and I believe 
political appointees across the board serve on an average of 1 
year and 9 months, historically, whether it is the Democratic 
or Republican Administration--that lack of continuity hurts all 
of the agencies' effectiveness. Frankly, we can not afford to 
have those kinds of lapses at the VA, particularly in the 
health care delivery system.
    Senator Blumenthal. Well, I appreciate your comments. I 
know that this session is not the last we will have on these 
issues. I would note that the recommendations that I believe 
you have identified are all either underway or seen as feasible 
by the VA, so I think we have a lot of consensus here.
    One of the criticisms made of the Commission's report--I am 
not sure who made it; I think it may have been the IAVA--is 
that it fails to take account of the actions already underway 
in the VA, reforms already ongoing. I think that the support 
that you have indicated, and the Commission's support for the 
work that is underway really indicates that we are all putting 
our shoulder to the same wheel here.
    Again, my thanks for your leadership. I want to just finish 
by saying thank you for your support for the appeals process 
reform bill that I introduced earlier today. We can disagree on 
the details, but there is absolutely no question that the 
present system is broken. The President thinks so. The VSOs 
think so. Our veterans think so. The Congress should think so 
and should act.
    I very much respect that the Chairman is looking at all of 
the options available. I am not wedded to any single solution. 
I am certainly more than happy to be persuaded that there are 
better paths to the same goal. I think, there again, we should 
be able to reach a consensus on appeals reform sooner rather 
than later because time is not on our side, time is not on the 
veterans' side, when there is delay on appeals of these claims.
    Just to say what you all know: these claims do not seek 
handouts or hand-ups. They seek benefits that were earned 
through service and sacrifice to our Nation and injuries or 
wounds that caused these claims to be made. So, this Nation has 
to do the job. Thank you.
    Chairman Isakson. I want to thank Secretary McDonald and 
Dr. Shulkin--who must have paid off most of our witnesses, with 
all the comments he got today. Dr. Shulkin, they were bragging 
about you pretty good. You deserve it well. I appreciate Bob 
McDonald and his effort. I was with Secretary McDonald last 
night. He is a 24/7 guy working for our veterans and 
appreciated very much.
    To all our VSOs, we are going to count on you helping put 
your oars in the water and help us move forward these last 2 
months. We have got a lot of things that are this close and it 
is just a matter of us making up our mind we are going to get 
it done. If we can find 80 percent agreement, let's make a 
deal. Do not lose it over the 20 percent where we do not.
    I appreciate very much your taking the long time that we 
had to wait, but it was great testimony, great input, and it is 
going to end up benefiting the people we are all here to serve, 
and that is the veterans of the United States of America.
    With that said, this hearing will stand adjourned.
    [Whereupon, at 5 p.m., the Committee was adjourned.]

                            A P P E N D I X

                              ----------                              

Prepared Statement of American Federation of Government Employees, AFL-
                  CIO and The AFGE National VA Council
    Chairman Isakson and Ranking Member Blumenthal: The American 
Federation of Government Employees, AFL-CIO and its National VA Council 
(AFGE) thank the Committee for the opportunity to share our views 
regarding the final recommendations of the Commission on Care. AFGE 
represents nearly 700,000 Federal employees including more than 230,000 
employees of the Department of Veterans Affairs (VA). Within the 
Veterans Health Administration (VHA), AFGE represents employees at 
nearly every medical center and is by far the largest representative of 
medical and mental health professionals and support personnel.
                                overview
    Although the Commission did not formally adopt the controversial 
``strawman'' proposal, the impact would be very similar. Both would 
dismantle our veterans' only specialized integrated health care system 
and incur unsustainable costs that will inevitably lead to lower 
quality care and fewer health care services for fewer veterans.
    Both would also destroy veterans' true source of ``community 
care'': care provided within the Veterans Health Administration (VHA) 
that is closely coordinated with VA Vet Centers and Veterans Benefits 
Administration (VBA) benefits and employment services. The Commission's 
description of non-VA care as ``community care'' is a misnomer. 
Veterans strongly prefer to receive their care from the VA over the 
private sector according the Vet Voice Foundation poll and other recent 
polls.
    The Commission recommendation (#15) to eliminate all civil service 
protections under Title 5 would increase retaliation against employees 
who report mismanagement and take veterans' preference rights away from 
thousands of veterans who choose VHA careers. The loss of seniority-
based pay under the Commission's proposed new Title 38 personnel system 
would severely weaken the VA's ability to retain experienced providers. 
The proposed elimination of Title 5 due process protections and Merit 
Systems Protection Board appeal rights would allow managers to hire and 
promote based on favoritism and political affiliation instead of merit.
    As the Committee contemplates the future of the VA health care 
system, AFGE also strongly urges the Committee to save our treasured 
health care system from ``death by a thousand cuts.'' VA health care is 
already being dismantled ``brick by brick'' through the closures of 
many emergency rooms, intensive care units and other essential medical 
units. AFGE is also very concerned about the impact of VHA's 
overreliance on contractor-run outpatient clinics on quality of care, 
care coordination and costs and the secretive process for issuing and 
renewing these contracts. The most recent stealth attack on VHA is the 
imminent replacement of nearly all VHA compensation and pension (C&P) 
disability exams with contractor exams without any apparent analysis of 
the impact on veterans' disability ratings, access to integrated VHA 
care or costs.
    Recommendations #1 and #9: AFGE vehemently opposes Commission 
recommendations that would result in a massive shift of VA care to the 
private sector through unrestricted access to non-VA primary and 
specialty care and the transfer of primary control over veterans' care 
from the Secretary to an unelected corporate-style board running a new 
VHA Care System. AFGE concurs with Commissioner Michael Blecker that 
these drastic changes would result in ``the degradation or atrophy'' of 
critical veterans' health services. VA would also lose the critical 
core capacity that has enabled it to be the Nation's leading source of 
medical training and cutting edge research. Our nation would also lose 
the critical assistance that the VA provides through its ``fourth 
mission'' during national emergencies and natural disasters, from 
Hurricane Katrina to the Orlando mass shooting.
    VHA must remain the primary source of veterans' care, the exclusive 
provider of primary care and the exclusive care coordinator. VHA must 
retain control over the design and oversight of local, integrated care 
networks. AFGE fully supports the proposal for local integrated care 
networks developed by the Independent Budget veterans' service 
organizations and the similar proposal included in the VA's Plan to 
Consolidate Community Care.
    Putting a private governance board at the helm would also vastly 
reduce the ability of Congress and veterans to hold wrongdoers 
accountable for mismanagement, corruption and patient harm. The 
Commission acknowledged that the board would not have to comply with 
the open government requirements of the Federal Advisory Committee Act 
and most likely would not be subject to the Freedom of Information Act.
    Recommendation #2: The Commission's proposal to relieve the 
Secretary of the requirement under the Millennium Act to report 
annually to Congress on the number of beds closed the previous year 
constitutes another unjustified assault on accountability. AFGE agrees 
that current bed count data is inadequate but the solution is not less 
data. We have repeatedly sought Congressional oversight of ``bed count 
gaming'' where managers manipulate bed count data to hide the number of 
actual beds available to veterans. When beds are closed (primarily due 
to management's unwillingness to hire sufficient nurses), veterans are 
sent to non-VA hospitals that are less equipped to treat their unique 
conditions, often imposing greater costs on veterans and taxpayers.
    If the bed count reporting requirement is eliminated, thousands of 
veterans' beds will be lost forever, staff will be laid off, and 
smaller facilities may not survive. VA beds have also played a critical 
role in our national disaster response plan; during Hurricane Katrina, 
patients were moved to VA medical centers in Houston and other 
locations. Therefore, we urge the Committee to reject this 
recommendation and instead, conduct oversight of ways to improve bed 
count data collection with the input of veterans' groups and 
representatives of front line employees.
    Recommendation #6: AFGE strongly opposes the use of a BRAC-like 
process to address VHA's facility and capital asset needs. We are 
equally opposed to giving a governance board any role in determining 
VHA's infrastructure needs. It is likely that any board-run process 
would be plagued by the same self-interest that impaired the 
decisionmaking process of a Commission filled with health care 
executives.
    AFGE concurs with the Independent Budget veterans service 
organizations that a far more urgent need is to address current 
infrastructure gaps that threaten safety and interfere with care 
delivery. Clearly, a BRAC is not the answer. The RAND Corporation 
recently reported that through at least 2019, demand for veterans 
'health care services is likely to exceed supply.
    Recommendation #15: In its report, the Commission portrays civil 
service protections afforded to Title 5 employees as the enemy of 
innovation and quality improvement (``a relic of a bygone era,'' ``an 
island disconnected from the larger talent market for knowledge-based 
professional and administrative occupations that are mission-
critical''). The Commission then reveals its true agenda for 
eliminating Title 5 rights: it wants to make it easier to fire 
employees it doesn't like and hire through cronyism.
    What the report does not tell us is that the Department of Defense 
Federal agencies operate health care systems effectively with Title 5 
workforces that have full due process and collective bargaining rights 
that they use to speak up against mismanagement and negotiate with 
management over working conditions to the benefit of their patients.
    This recommendation would eliminate all Title 5 rights currently 
afforded to the majority of VHA employees. These include full Title 5 
employees, most of whom are service-connected disabled veterans (e.g. 
police, housekeepers, food service workers) and Hybrid Title 38 
employee (e.g. Medical Support Assistants, nursing assistants, 
pharmacists, psychologists and social workers). Both groups would lose 
their right to third party review of removals and demotions by the 
Merit System Protection Board.
    Both groups would also lose most of their collective bargaining 
rights that allow them to negotiate over working conditions such as 
scheduling, assignments and training.
    Veterans who choose to work in VA health care after saving lives on 
the battlefield would also be greatly harmed by this Commission 
recommendation. Federal case law has made it clear that employees 
appointed under Title 38 (Hybrids and full Title 38 employees) are not 
covered by the Veterans Employment Opportunities Act (VEOA) and 
therefore lack veterans' preference protections against being passed 
over for a non-veteran in hiring. AFGE concurs with the Independent 
Budget that Congress should enact legislation to extend the VEOA to all 
VHA employees.
    The proposed new Title 38 personnel system would ignore seniority 
when setting pay, at a time when VHA is facing low morale and increased 
attrition among providers with valuable experience because many new 
hires are being paid more than their senior counterparts.
                         other recommendations
    AFGE generally supports recommendations #3 (appealing clinical 
decisions), #5 (health care disparities), #14 (diversity and cultural 
competence), #16 (human capital management) and #17 (eligibility for 
those with other-than-honorable discharges).
    AFGE supports modernized information technology (IT) (#7) but urges 
Congress to mandate greater involvement of front-line employees using 
new IT systems to ensure successful implementation.
    AFGE does not take a position on recommendation #4 (VHA 
transformation) because further investigation of the cost-effectiveness 
and lack of transparency of the Veterans Engineering Resource Centers 
is needed. We also take no position on #8 (supply chain) or #12 (VISNs) 
at this time.
    We object to #10 (leadership) if it involves a governance board. 
AFGE also opposes # 11 (leadership succession) because direct hire 
authority will increase cronyism and discrimination against veterans. 
AFGE also opposes #13 (performance standards) because of its 
overreliance on private sector standards that are not applicable to 
VHA's mission or its unique patient population. AFGE is opposed to 
recommendation #18 (expert body to address eligibility) as unnecessary.

    In closing, AFGE urges the Committee to reject all proposals to 
dismantle the VA health care system and shut the doors of its medical 
centers, either through unrestricted access to non-VA care under a 
governance board-run system or legislation to extend the broken 
temporary Choice program. Lawmakers should also investigate the growing 
number of incremental attacks on VA health care including outsourcing 
of C&P exams, contractor-run outpatient clinics and elimination of VA-
provided emergency care and ICU services. AFGE urges the Committee to 
serve the best interests of veterans and the Nation by investing in 
VA's own high performing integrated, veteran-centric health care 
system. We welcome the opportunity to work with the Committee and VSOs 
s to ensure continuous improvement in our Nation's treasured health 
care system for veterans.
                                 ______
                                 
    Position Paper from The Association of VA Psychologist Leaders, 
   Association of VA Social Workers, Nurses Organization of Veterans 
  Affairs, Veterans Affairs Physician Assistant Association, American 
  Federation of Government Employees, National Federation of Federal 
Employees, National Nurses United, American Psychological Association, 
               and National Association of Social Workers
    On June 30, 2016, the Commission on Care submitted its Final Report 
required by the Veterans Access, Choice, and Accountability Act of 
2014.
    As organizations comprised of and representing health care 
practitioners, researchers, educators, administrators and personnel 
devoted to serving Veterans, we have serious reservations about the 
report's major recommendation to replace the current VHA with a new 
entity, to be known as the VHA Care System. In the proposed VHA Care 
System, Veterans would be permitted to receive care from any local 
facility or provider who has been credentialed by VHA. Oversight for 
Veterans' health care would be handed over to a newly created, external 
governance board.
    According to the Commissions' charter, ``final recommendations will 
be data driven.'' As we demonstrate below, the recommendation to 
establish a new VHA Care System is at odds with compelling evidence of 
the VHA's current effectiveness.
    As affirmed in the Final Report's introduction, RAND's 2015 
evaluation (http://www.rand.org/pubs/research_reports/RR1165z2.html), 
RAND's 2016 summary (http://www.rand.org/pubs/research_reports/
RR1165z4.html) and a 2016 literature review of 60 scientific 
publications (http://bit.ly/1UOlEmF), the current VHA system provides 
healthcare that is as good as, and more often superior to, non-VA care. 
It outperforms non-VA care on adherence to recommended preventative 
care guidelines, adherence to recommended treatment guidelines, 
outpatient processes and outpatient outcomes. Nevertheless, the 
Commission's Final Report ignores the implication that vastly expanding 
reliance on local non-VA providers and facilities could worsen, not 
improve, Veterans' health care.
    The proposed VHA Care System disassembles one of the most 
effective, innovative features of current VHA care--the Primary Care/
Mental Health Integration approach. The Final Report concedes that such 
integration is largely missing in the community (p.22). Also absent in 
private sector healthcare are the integrated, wrap around services the 
VA offers though financial, educational, housing, caregiver and 
employment support.
    The Final Report recognizes that VHA provides better coordinated 
care. ``Veterans who receive health care exclusively through VHA 
generally receive well-coordinated care, yet care is often highly 
fragmented among those combining VHA care with care secured through 
private health plans, Medicare, and TRICARE. This fragmentation often 
results in lower quality, threatens patient safety, and shifts cost 
among payers'' (p.28). It is the VHA, not the disjointed, larger non-VA 
system, which is the true provider of Veteran-centric community care.
    The Final Report anticipates that 60 percent of eligible care will 
shift from VHA facilities to outside networks (p.31). The net result 
will reduce, not expand, Veterans' choices, since to pay for this 
shift, a VHA Care System will incrementally downsize the number of VHA 
providers and programs. The VHA system would be weakened.
    The Final Report estimates the cost of creating and implementing a 
new VHA Care System to range from $65 billion to $85 billion in 2019, 
with a middle estimate of $76 billion (p.32). That's $11 billion more 
than the FY 2017 VHA medical care budget. If Congress saw fit to fund 
billions more yearly, there are better ways to strengthen the VHA, 
starting with expanded hiring at VA facilities where demand for 
services exceeds available staffing. But if Congress did not, the Final 
Report suggests that the expensive VHA Care System could offset costs 
by decreasing the number of Veterans eligible for VA health care, 
cutting services, or increasing Veterans' out-of-pocket expenses. In 
any of those scenarios, Veterans are worse off.
    In sum, given the evidence of overall quality, efficiency, 
integration and innovation within the VHA, we believe that efforts to 
reform the VHA can best serve Veterans by expanding access to services 
the VHA currently provides. Where geographic challenges exist and/or 
VHA does not offer specific services, the VHA should purchase services 
from non-VA partners.
    Any proposed transformation of the VA healthcare system should be 
data driven. Don't risk our Veterans' healthcare on unproven ideas. We 
must preserve and strengthen the VHA integrated health care community 
that Veterans deserve and overwhelmingly prefer.
            Contact Information:

                    Ron Gironda, Ph.D.,
                    President, Association of VA Psychologist Leaders.

                    Thomas Kirchberg, Ph.D.,
                    Past President, Association of VA Psychologist 
                            Leaders.
                                 ______
                                 
            Letter from Sharon Johnson, MSN, RN, President, 
                Nurses Organization of Veterans Affairs
    Dear Chairman Isakson: On behalf of the over 3,000 members of the 
Nurses Organization of Veterans Affairs (NOVA), we would like to offer 
our thoughts regarding the Commission on Care Final report being 
discussed before your Committee today.
    NOVA thanks the Commissioners for their hard work and believes many 
of the recommendations offered will improve the care we provide 
veterans every day at VA facilities around the country. Recommendations 
to include providing additional resources to modernize IT, increase 
H.R. and other support staff, strengthen capital assets and recruit and 
retain a high quality professional workforce, all have our support.
    The most glaring recommendation--and one that has received strong 
opposition from veterans' advocates and those in the community working 
to care for veterans--is a proposal that would create a VHA Independent 
Board which would govern the VA health care system.
    NOVA strongly opposes giving an outside board--made up of civilian 
health care executives who may have never set foot into a VA facility--
the authority to make decisions about the care and services provided 
America's veterans. Creating another layer of bureaucracy, which would 
take VA's ability to manage care away from those who are held 
accountable by this very body seems ill-advised. Oversight for 
veterans' health care handed over to a newly created external board 
would all but dismantle the most effective and innovative features of 
the current VA system--the Primary Care/Mental Health Integrated 
approach. It also fails to take into account the many wrap around 
services that VA offers veterans, while ironically recognizing that VA 
provides better coordinated care than any of its private sector 
partners.
    NOVA agrees in order to reform VA so it can best serve our Nation's 
veterans, we must expand access to services that it currently provides 
by hiring at VA facilities where demand exceeds available staffing, 
where geographic challenges exist, and specific services are not 
offered, allowing veterans the option of using purchased care available 
through its community providers.
    Community providers should be a crucial part of the integrated 
network of care, but VA must remain the first point of access and 
coordinator of all care. As nurses, managing workflow and coordinating 
care is key to providing the quality that serves as a model for VA's 
``whole health'' approach to care.
    NOVA asks that any discussion regarding the Commission's proposed 
recommendations to improve gaps in service be made in a thoughtful, 
transparent process and involve all stake holders. Preserving an 
integrated health care community designed to put veterans first must 
include VA. It is VA care that veterans overwhelming prefer and 
deserve.
            Sincerely,
                    Sharon Johnson,
                    MSN, RN, President,
                    Nurses Organization of Veterans Affairs.
                                 ______
                                 
          Prepared Statement of Paralyzed Veterans of America
    Chairman Isakson, Ranking Member Blumenthal, and Members of the 
Committee, Paralyzed Veterans of America (PVA) would like to thank you 
for the opportunity to express our views on the Commission on Care's 
Final Report. We appreciate the Committee's continued commitment to 
thoroughly examining the best way forward for comprehensive reform in 
the delivery of veterans' health care.
    Before addressing the 18 individual recommendations included in the 
Commission report, we would like to address two underlying fundamental 
flaws within the report. First, the Commission seemingly reviews the 
Veterans Health Administration (VHA) as though it exists within a 
vacuum. The many recommendations do not contemplate the relationship 
that VHA has with the Veterans Benefits Administration or the National 
Cemetery Administration. We believe that any reform of VHA must 
consider the direct interaction that occurs between the three 
Administrations of the Department of Veterans Affairs (VA). 
Unfortunately, the Commission report does not.
    Second, the Commission knowingly set aside consideration of the 
three additional missions the VA has beyond being a provider of 
services for veterans. Those missions include education and training of 
a large segment of America's health care workforce, research 
(particularly into conditions unique to military service), and serving 
as the backup resource during a national emergency or natural disaster. 
The Commission's recommendations are presented as though these 
responsibilities within VA do not exist.
    We believe that failure to contemplate these two important points 
undermines the Commission report. That being said, many of the 18 
recommendations are worthy of consideration. We applaud the Commission 
for taking on and thoughtfully addressing this complex issue. We also 
appreciate the fact that the Commission and its staff regularly sought 
feedback from the veterans' service organization (VSO) community as it 
proceeded. With this in mind we offer our thoughts on this important 
work.
         redesigning the veterans' health care delivery system
The VHA Care System
Recommendation #1: Across the United States, with local input and 
        knowledge, VHA should establish high-performing, integrated 
        community-based health care networks, to be known as the VHA 
        Care System, from which veterans will access high-quality 
        health care services.
    PVA supports the creation of fully integrated health care networks 
with the Department of Veterans Affairs (VA) maintaining responsibility 
for all care coordination. This part of the recommendation is 
consistent with the proposal that PVA along with our partners in The 
Independent Budget (IB)--DAV and VFW--put forward late last year. We 
also support eliminating the 30-day and 40-mile standards for access 
established as part of the Choice program. The IB offered a similar 
recommendation last year suggesting that access to care and when and 
where to seek service should be a clinically-based decision determined 
by the veteran and his or her provider, not an arbitrary access 
standard. Despite our support for the concept of creating fully 
integrated health care networks, we have some significant concerns with 
other aspects of the Commission's recommendation.
    We are first, and foremost, concerned with the Commission's 
recommendation for ``choice.'' The report proposes that veterans should 
have unrestricted choice for any primary care provider within their 
newly-constructed network. In order to access specialty care (outside 
of VA's specialized services), veterans would be required to get a 
referral from their designated primary care provider.
    The Commission does not, however, discuss what the boundaries 
should be in establishing the networks. The breadth of the networks is 
limited only by the Commission's assumption that the networks will be 
``tightly managed'' by VA and that primary care providers wishing to 
participate will meet certain quality standards. Together these two 
parameters do not establish a clear picture as to what extent VA may 
efficiently dilute its capacity to deliver care in favor of outsourcing 
to the private sector.
    These networks must be developed and structured in a way that 
preserves VA's capacity to deliver high-quality care while specifically 
preserving its core competencies and specialized services. Without a 
critical mass of patients, VA cannot sustain the very infrastructure 
that supports and makes VA specialized services world-class. Providing 
veterans unfettered choice as to their provider jeopardizes this 
baseline of patients. A better proposal is found in VA's Plan to 
Consolidate Community Care Programs, which rests on a principle of 
using community resources to supplement service gaps and better realign 
VA resources. This sets a natural boundary that would prevent the 
networks from expanding to a harmful and unmitigated degree. 
Ultimately, the Commission failed to articulate what constitutes a 
``tightly managed'' network, and it admittedly did not contemplate 
``[r]eductions in the volume of care within VA facilities, and 
potentially adverse effects [on] quality . . .  '' \1\ The result we 
are left with is lip service paid to preserving VA's specialized 
services.
---------------------------------------------------------------------------
    \1\ Commission on Care, Final Report, June 30, 2016, p. 32 
(hereafter ``Report'').
---------------------------------------------------------------------------
    In addition to VA specialized services, there is insufficient 
discussion regarding care coordination within these networks. The 
recommendation suggests that care coordination take place through all 
primary care providers, but VA would assume overall responsibility for 
care coordination of all enrolled veterans. There is no delineation, 
though, as to exactly where VA and community providers hold 
responsibility. The recommendation is conflicting and could ultimately 
lead to finger pointing instead of well-coordinated care for veterans 
being served in the community. We would again point to VA's Plan to 
Consolidate Community Care Programs.\2\ VA's proposal would administer 
care-coordination based on the intensity of coordination needed. This 
method offers the functionality and flexibility needed to ensure that 
patients with complex cases receive adequate attention and resources. 
It also tailors the level of care coordination to each individual 
patient's complexity and needs, regardless of whether the patient 
receives care in VA facilities or in the community.
---------------------------------------------------------------------------
    \2\ Department of Veterans Affairs, Plan to Consolidate Programs of 
Department of Veterans Affairs to Improve Access to Care, October 30, 
2015, pp. 21-25,http://www.va.gov/opa/publications/
va_community_care_report_11_03_2015.pdf.
---------------------------------------------------------------------------
    We are further concerned with the report's consideration of funding 
for the new health care delivery system. It does not clearly reconcile 
how VA currently determines its appropriations needs through the 
Enrollee Health Care Projection Model (EHCPM) with how it will have to 
determine its appropriations needs through the new system with local 
leadership input.
    The report also considers cost-sharing, particularly for veterans 
with non-service-connected disabilities. The cost-sharing opportunity 
would be used to expand options for choice, but it would likely come 
with increased costs for Priority Group 4 (non-service-connected 
catastrophically disabled) who do not currently have a cost for their 
care. This proposal is contemplated within the larger context of 
determining priority of service. The report recommends priority be 
given to service-connected disabled veterans and those with low 
incomes, but it does not properly consider the relationship of Priority 
Group 4 veterans to the system.
    Finally, as VA begins to involve community providers at a greater 
rate, it is essential to ensure that the process for adjudicating 
medical malpractice claims is the same whether that care was received 
in the community or within VA. In almost all cases, the current process 
under 38 U.S.C. Sec. 1151 treats malpractice claims the same regardless 
of where they received care. However, certain unique situations still 
present inequitable results for veterans.
Clinical Operations
Recommendation #2: Enhance clinical operations through more effective 
        use of providers and other health professionals, and improved 
        data collection and management.
    PVA generally supports this recommendation as it would allow 
providers in the VA health care system to practice within the full 
scope of their licenses. The report also addresses bed capacity 
reporting as originally established by Public Law 106-117, the 
``Veterans Millennium Health Care and Benefits Act.'' It appears to 
endorse a requirement for VA to report beds as closed, authorized, 
operating, staffed, and temporarily inactive.
    We reiterate our support for reinstating the capacity reporting 
requirement originally established by Public Law 104-262, the 
``Veterans' Health Care Eligibility Reform Act of 1996.'' VA has not 
maintained its capacity to provide for the unique health care needs of 
severely disabled veterans. Reductions in both inpatient beds and staff 
in VA's acute and extended care settings have been continuously 
reported throughout the system of care, particularly since the capacity 
reporting requirement expired in 2008.
Recommendation #3: Develop a process for appealing clinical decisions 
        that provides veterans protections at least comparable to those 
        afforded patients under other federally-funded programs.
    PVA supports this recommendation as it aligns VA with widely 
accepted medical practice. As it stands, each Veteran Integrated 
Service Network (VISN) has its own process for appealing clinical 
decisions. Failure to standardize the appeals process across VA 
naturally produces a disparity in outcomes among similarly situated 
veterans seeking to bring clinical disputes. Furthermore, external 
review of final VA decisions is subject to the discretion of the VISN 
director.
    One aspect of current VA policy that is not addressed in the 
Commission's report is the latent conflict of interest in the patient 
advocate office that each VA facility employs to manage and resolve 
complaints. While patient advocates generally serve as the liaison 
between patients and clinicians, their ability to fully advocate on 
behalf of the veteran is hampered by the fact that they are forced to 
present criticism to those who hold the keys to their career. The 
``program operates under the philosophy of Service Recovery, whereby 
complaints are identified, resolved, classified, and utilized to 
improve overall service to veterans.'' \3\ Capturing useful data by 
documenting complaints in order to facilitate positive changes at VA is 
productive, but the incentive to downplay patterns of conduct and other 
pervasive issues exists and limits potential progress. As a solution, 
PVA has suggested before that the patient advocates should be removed 
from their current personnel structure and report instead to the MyVA 
Veterans Experience Office in order to offer more robust, constructive 
criticism when patterns emerge among veteran complaints.
---------------------------------------------------------------------------
    \3\ VHA Patient Advocacy Program, VHA Handbook 1003.4 (2005).
---------------------------------------------------------------------------
Recommendation #4: Adopt a continuous improvement methodology to 
        support VHA transformation, and consolidate best practices and 
        continuous improvement efforts under the Veterans Engineering 
        Resource Center.
    PVA supports this recommendation. The principle of diffusing 
knowledge and best practices throughout VA is important and should be 
encouraged. As the report indicates, VA currently has resources, such 
as the Veterans Engineering Resource Center (VERC), that are 
underutilized. To truly capitalize on these available benefits, though, 
VA must thoroughly pursue personnel management reform. A large 
contributor to stagnant innovation and distribution of best practices 
is due to persistent, wide-spread vacancies in senior leadership 
positions. Acting directors or senior managers, as opposed to permanent 
leaders, have a limited ability to implement long-term changes because 
of the uncertainty of their tenure. Fixing the issues that pervade the 
personnel system will go hand-in-hand with success in adopting a 
continuous improvement methodology.
Health Care Equity
Recommendation #5: Eliminate health care disparities among veterans 
        treated in the VHA Care System by committing adequate personnel 
        and monetary resources to address the causes of the problem and 
        ensuring the VHA Health Equity Action Plan is fully 
        implemented.
    PVA supports certain aspects of this recommendation, but we believe 
that this recommendation perpetuates a false narrative about VA health 
care prematurely and without a thorough understanding of the scope of 
the problem. Health care systems across the United States are 
acknowledging and seeking to address health care equity, inequality and 
disparities. VA has conducted its own studies and found that 
disparities do exist. Dealing with these disparities when and where 
they exist requires affirmative steps to combat the problem. It is 
essential, however, to thoroughly understand the root causes and true 
scope of the problem before implementing an effective plan.
    VA's unique history of providing care for historically underserved 
populations, particularly poor or near poor veterans with chronic 
medical conditions and behavioral health conditions, suggests that 
patterns within the private sector should not be arbitrarily 
appropriated to VA without thorough examination. Furthermore, because 
cost is often not a barrier to care within VA, a significant 
distinction between VA and private sector care must be made based on 
the absence of typical market influences affecting private sector 
outcomes.
    Before mandating that VA make ``implementation of the VHA Health 
Equity Action Plan (HEAP) nationwide'' \4\ a strategic priority in the 
face of all the other competing issues, more research and better 
information is needed to help inform VA's planning and allocation of 
resources. The 2015 Evidence Brief relied upon by the Commission's 
report specifically states that the sources of the disparities 
identified were not examined.\5\ The Evidence Brief concludes that more 
research, specifically related to the sources or causes of the 
disparities is needed before an accurate assessment of the issue can be 
made.\6\ To this end, we support the proposal to plus-up the staff 
dedicated to examining this issue within VA. It will not only encourage 
VA to determine how pervasive certain issues are and root out causes of 
the disparities that exist, but it will also permit VA to apply lessons 
learned from its own successes, such as its leadership on the issue of 
health care equity in the LGBT community acknowledged by the Commission 
in its discussion related to diversity and cultural competence.\7\
---------------------------------------------------------------------------
    \4\ Report, p. 54.
    \5\ Department of Veterans Affairs, Evidence Brief: Update on 
Prevalence of and Interventions to Reduce Racial and Ethnic Disparities 
within the VA, http://www.hsrd.research.va.gov/publications/esp/
HealthDisparities.pdf, pp. 1, 3, 33.
    \6\ Id., p. 28, 31.
    \7\ Report, p. 137.
---------------------------------------------------------------------------
Facility and Capital Assets
Recommendation #6: Develop and implement a robust strategy for meeting 
        and managing VHA's facility and capital-asset needs.
    Position: PVA strongly supports this recommendation. VA's capital 
asset management has been substandard, to say the least, in recent 
years. We support, in accordance with the recommendations of The 
Independent Budget, the expansion of ambulatory or urgent care. We also 
believe that VA must make a concerted effort to right size its 
infrastructure, in light of the amount of unused and underutilized 
capacity in the system. However, we are not absolutely convinced that a 
BRAC-modeled concept is the most effective way for VA to realign its 
capital footprint. Finally, we fully support the recommendation the 
report offers to free the VA of the strict fiscal constraints that have 
hampered its ability to manage its capital leasing program.
Information Technology
Recommendation #7: Modernize VA's IT systems and infrastructure to 
        improve veterans' health and well-being and provide the 
        foundation needed to transform VHA's clinical and business 
        processes.
    PVA fully supports this proposed recommendation. We have repeatedly 
advocated for reform to VA's IT system management and enterprise 
through The Independent Budget (IB). The IB strongly opposed IT 
centralization in 2006 (a move forced by then Chairman of the House VA 
Committee, Steve Buyer). We believe many of the problems identified by 
the Commission originated with that centralization, and the report 
essentially affirms our belief. We believe that the Commission's 
recommendations could be taken even further to fully decentralize IT 
into VHA once again. This will provide more health care IT innovation, 
flexibility with the IT budget and better IT outcomes.
    However, we recognize that cost for these reforms remains a 
significant hurdle to advancement. Indeed, VA's Plan to Consolidate 
Community Care Programs similarly called for significant IT upgrades in 
order to be successful. The plan was presented to this Committee in 
late 2015 and was well-received on both sides of the aisle, but several 
Members of Congress balked at the cost of paying for this necessary 
upgrade. Ultimately, we strongly believe that this is a cost that must 
be met for VA to have the opportunity to fully modernize its IT 
infrastructure. This is particularly true in light of the discussion 
regarding use of commercial off-the-shelf (COTS) IT products.
    PVA has no strong position on whether VA should choose a COTS 
solution for its IT systems or design its own systems. However, it 
would seem that leveraging COTS would make innovation and modernization 
more dynamic and possibly more cost efficient.
Supply Chain
Recommendation #8: Transform the management of supply chain in VHA.
    The Commission accurately outlines the supply and contracting 
problems within VHA and VA. The corresponding recommendations are good 
business concepts if VA and VHA have the funding, ability and 
leadership to implement them. The recommendation to have VA and VHA re-
organize all procurement and logistics operations for VHA under the VHA 
Chief Supply Chain Officer (CSCO) is the correct organizational 
solution. However, in order to implement the recommendations, there 
must be multiple changes in other departments throughout VA and VHA. 
Absent these changes, implementation of these recommendations will 
cause disruption, confusion and uncertainty at the Central Office level 
and will be even worse at the field level.
    PVA has also identified some additional concerns with the 
recommendation. The attempt to standardize medical equipment and 
supplies, as offered in the report, would include prosthetic equipment. 
The danger is that there is no leadership or expertise in VHA to manage 
the standardization of prosthetics. There are certainly prosthetic 
items and supplies that can be standardized, but even those items must 
be carefully reviewed by an expert clinical team composed of 
clinicians, contracting, prosthetic and veteran representatives who use 
the particular items under consideration. Additionally, the report does 
not contemplate how far down the supply chain standardization of 
prosthetic equipment should go.
    If VA was to pursue the reforms recommended in this section, PVA 
has a number of implementation level items that could be offered to 
improve the process and increase the likelihood of a successful 
transformation.
                  governance, leadership and workforce
Board of Directors
Recommendation #9: Establish a board of directors to provide overall 
        VHA Care System governance, set long-term strategy, and direct 
        and oversee the transformation process.
    While PVA understands the intent of this recommendation, we do not 
support it. We agree with the notion that too frequent turnover of VHA 
leadership has stymied innovative leadership and transformational 
change. However, replacing politically-appointed leadership with a 
Board comprised of leaders representing multiple political ideologies 
will likely lead to even greater gridlock. At the very least, it is 
simply trading one political entity for another; it does not get rid of 
the political interference. We can easily envision a scenario where 
this new appointed Board becomes a reflection of the political 
leadership of Congress that has demonstrated no ability whatsoever to 
govern or compromise. While the current leadership of VA is based on 
nomination by the President and approval by the Senate, this proposal 
takes political influence too far. One only need to look at the 
workings of the Commission itself and a number of its politically-
motivated members to realize the potential negative consequences 
politically-driven decisions could have on the delivery of health care 
for veterans.
    Additionally, while the recommendation places emphasis on ensuring 
veterans are included on the Board, it does not include any real 
consideration of veterans' service organization representation.
Leadership
Recommendation #10: Require leaders at all levels of the organization 
        to champion a focused, clear, benchmarked strategy to transform 
        VHA culture and sustain staff engagement.
    PVA supports this recommendation. This recommendation cuts at the 
necessary leadership to effect the cultural changes required to make 
VHA a more responsive and dynamic organization.
Recommendation #11: Rebuild a system for leadership succession based on 
        a benchmarked health care competency model that is consistently 
        applied to recruitment, development, and advancement within the 
        leadership pipeline.
    PVA supports this recommendation. Succession planning for 
leadership is a problem that exists across the Federal Government, not 
just at the VA. The process by which senior leaders are brought into 
the VA system, particularly VHA, is cumbersome and complicated. VA too 
often loses out on some of the best candidates because of the nature of 
the H.R. process that fills open leadership positions. The direct-hire 
authority proposed by the report could provide improved opportunities 
to bring on critically needed senior staff in the health care system. 
Additionally, a renewed focus on leadership development and management 
could ensure that the best candidates are retained in the VHA system.
Recommendation #12: Transform organizational structures and management 
        processes to ensure adherence to national VHA standards, while 
        also promoting decisionmaking at the lowest level of the 
        organization, eliminating waste and redundancy, promoting 
        innovation, and fostering the spread of best practices.
    PVA generally supports this recommendation. We believe the vision 
that the Commission provides for how to change the organizational 
structure of VHA could prove beneficial to improving management of the 
system and implementation of policy. We are disappointed that the 
report does not provide more discussion about the inefficiency of the 
current VISN structure. Additionally, we remain skeptical about the 
efficacy of the proposed simplification of the VHA budget. While this 
sounds reasonable out of context, it does not reflect the complicated 
nature of budget development and appropriations distribution within 
VHA.
    We do support the notion of more transparent and detailed 
accounting and disclosure of VHA's expenditures. This recommendation is 
consistent with recommendations made by the IB during debate and 
passage of legislation to establish advance appropriations for VA 
health care.
Recommendation #13: Streamline and focus organizational performance 
        measurement in VHA using core metrics that are identical to 
        those used in the private sector, and establish a personnel 
        performance management system for health care leaders in VHA 
        that is distinct from performance measurement, is based on the 
        leadership competency model, assesses leadership ability, and 
        measures the achievement of important organizational 
        strategies.
    PVA generally supports the creation of a workgroup to establish a 
new performance management system for VHA leadership. However, we are 
not certain that it is appropriate to establish performance metrics 
that are identical to those used in the private sector. The nature of 
VA health care delivery is appreciably different from the delivery of 
health care in the private sector. While there are some aspects that 
are similar, the VA health care system is not so much like the private 
sector that it should be evaluated in exactly the same manner. With 
this in mind, performance standards for employees and management should 
not be exactly the same either.
Diversity and Cultural Competence
Recommendation #14: Foster cultural and military competence among all 
        VHA Care System leadership, providers, and staff to embrace 
        diversity, promote cultural sensitivity, and improve veteran 
        health outcomes.
    PVA generally supports this recommendation; however, we take 
exception to the implication that VHA somehow lacks the cultural and 
military competence to provide veterans' health care. VA is the 
embodiment of veteran cultural competence, and it is, in fact, one of 
the notable reasons veterans who receive health care from VA prefer it 
over the private sector. We strongly support the recommendation that 
cultural and military competence be criteria for allowing community 
providers to participate in the VA's integrated health networks. In the 
past, private providers have openly testified before the House 
Committee on Veterans' Affairs that one of their primary concerns with 
treating veterans is not understanding veterans and their experiences 
as patients. This very circumstance is one of the primary reasons that 
the private sector is not the ultimate solution to VA's access 
problems.
Workforce
Recommendation #15: Create a simple-to-administer alternative personnel 
        system, in law and regulation, which governs all VHA employees, 
        applies best practices from the private sector to human capital 
        management, and supports pay and benefits that are competitive 
        with the private sector.
Recommendation #16: Require VA and VHA executives to lead the 
        transformation of HR, commit funds, and assign expert resources 
        to achieve an effective human capital management system.
    PVA supports many of the pragmatic ideas found in recommendations 
15 and 16 related to VHA workforce issues. A modernized and effective 
human resources operation is vital to any organization, especially one 
as large as VA. We believe the Federal personnel system is one of the 
largest hindrances to effective management of the VHA system. 
Recommendations 15 and 16 deal with two aspects critical to successful 
reform: the authorities which govern the personnel system and the 
overall management of human resources (HR) within VHA.
    The multiple authorities governing the VHA personnel system are 
incompatible with a dynamic high-performing health care system. Hiring 
managers and their employees must attempt to understand the end-to-end 
hiring process under four separate rules systems. This unnecessarily 
adds complexity to the hiring system which is difficult for both the 
potential employee and the human resources staff to navigate. The 
unnaturally slow hiring process also produces lost talent. Quality 
employees do not often have the luxury to wait around for a VA 
employment application to be processed. Similarly, when an employee 
announces his or her forthcoming retirement or departure from VA, H.R. 
is unable to begin the recruiting or hiring process for that position 
until it is actually vacated. It not only causes an unnecessary 
vacancy--exacerbated by the lengthy hiring time--but it also prevents a 
warm handoff between employees and any chance for training or 
shadowing.
    PVA also believes that VA has suffered from its inability to be 
competitive with its private sector health care counterparts who do not 
face the same restrictions on pay and benefits for critical staff. We 
support the recommendations to align pay and benefits to make the VA 
more competitive for important staff with the private sector.
    The broad recommendation to consolidate all personnel authorities 
into one alternative personnel system will bring wide benefits, but it 
must also include increased flexibility in the actual hiring process. 
It must also establish clear standards for disciplining or removing 
poor performing employees without diminishing current due process 
protections afforded by law.
    In short, the VHA workforce arena is ripe for numerous practical 
changes that would provide realistic opportunities to reconcile 
personnel reform and preservation of the due process protections 
currently afforded to VHA employees.
                              eligibility
Recommendation #17: Provide a streamlined path to eligibility for 
        health care for those with an other-than-honorable discharge 
        who have substantial honorable service.
    PVA supports this recommendation. This recommendation mirrors 
legislation introduced earlier this year--S. 1567 and H.R. 4683, the 
``Fairness for Veterans Act''--which PVA publicly supported. There is 
overwhelming evidence that the effects of war can cause psychological 
harm, drastically changing the personality and behavior of 
servicemembers. Sometimes those effects manifest and adversely affect 
the terms of the veteran's discharge. It is a poor irony and ultimately 
unjust to withhold care for an injury incurred during service solely 
because that injury provoked or caused the actions which led to their 
discharge classification. While most commanders are dedicated and 
caring leaders, many do not have the intimate knowledge of a 
servicemember's behavior prior to the trauma they experienced during 
military service. Other leaders may even find it ``expedient'' to 
rapidly discharge an individual to rid themselves of a problem in the 
unit. Too often these discharges are determined without regard to the 
cause of the altered behavior. Having an effective mechanism to review 
the discharge in a deliberate manner can ensure that veterans deserving 
of care for injuries incurred as a result of their service are not 
denied.
Recommendation #18: Establish an expert body to develop recommendations 
        for VA care eligibility and benefit design.
    PVA is very cautious of this recommendation. The Commission 
generally supports with evidence its belief that the issue of 
eligibility needs to be reexamined or updated in order to better align 
capacity and demand. But it does not support or even present a 
rationale for why this undertaking should be conducted by an entity 
outside VA or Congress. The recommendation to outsource this task 
treads into the territory of eligibility with a different, and 
potentially harmful, perspective--that of business efficiency.
    The benefits currently afforded to, for example, Priority Group 4 
veterans reflects years of hard work and advocacy that forced our 
country's representatives to make tough business decisions within the 
context of long-accepted philosophical principles. What this country 
owes its veterans and what it can afford to pay cannot always be 
reconciled. It does not absolve this Nation's responsibilities to its 
veterans. In such circumstances VA and Congress should act from the 
perspective that they must fight not just to better manage resources 
but to also find the necessary appropriations to cover the obligation. 
``Restructuring the debt'' and trimming veterans from the rolls based 
on a cold and calculated business-driven decision is not an option. The 
budget must not be balanced on the backs of veterans.
                               conclusion
    Mr. Chairman, we would like to thank you once again for the 
opportunity to testify on this important issue. This concludes our 
statement for the record. We would be happy to answer any questions the 
Committee may have.
      

                                  [all]
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