veterans who deployed and returned from operations enduring freedom and iraqi freedom, 67% have used some va benefit or service in some way. a far higher percentage than those from previous wars. the 2013 budget request would allow us to fulfill the requirements of our commission. health care for 8.8 million enrolled veterans. compensation for 4.2 million veterans. life insurance covering 7.1 million active duty service members and enrolled veterans at 95% customer satisfaction rating. education assistance for over 1 million veterans and family members on over 6,500 campuses. home mortgages with the nation's lowest foreclosure rates.

burial benefits for family members. this 2013 budget request continues the momentum and our three priorities you heard me speak about over the last three years. increasing access to care, eliminating the claims backlog and ending veterans homelessness through accountable use of the resources you provide. access encompasses va facilities and programs and technology. it is a broad term, but it is a lot. this 2013 budget request allows va to continue improving access by opening new or improved facilities closer to where veterans live and providing health and medicine links, including in some cases, where it is needed in veterans homes. also by fundamentally transforming benefits through the electronic tool called the

veterans relationship management system. this is an effort to get at our telephones. by collaborating with d.o.d., turning the program that we share, t.a.p. into an educational program that fully prepares the departing service members for the next phase of their lives. by better serving. we expect more than 1 million veterans will leave the military in the next five years. all will enroll in va. over 600,000 of them based on the historical trend. over 600,000 of them will receive care and benefits from va in the out years. regarding the backlog from what we know now, fy 2013 will be the

first year in which our claims production going out the door will exceed the number of incoming claims. and the paperless initiative we have been building for the past two years and automation tool, becomes critical to reversing backlog growth and increasing quality. we must not hesitate. stability in i.t. funding is critical to our success. homelessness. from january 2010 to january 2011, alone, the estimated number of homeless veterans declined 20%. much remains to end homelessness by the 2013 budget. we are now developing a dynamic homeless veterans registry. you appreciate much of what we understand about homelessness is an estimate of real numbers.

we are not able to count everyone out there. it is a valid process. in the meantime, over the past three years, we have been building a registry of former and current veterans by name so we know who they are, what their issues are and the individual level of concern that has been expressed here. their issues and where they reside and whether they are migratory and move from one va footprint to the next. as we think about adjusting the footprint based on what we see day-to-day, we don't want to ignore maybe an issue that is going to require help. so, building a veterans registry today, over 400,000 members allowing us to see, track and understand the real causes of

homelessness. in the years ahead, we think this information which will not only prevent it, not just for veterans, but perhaps for other communities as well where we have partnered in taking on the homeless issue. we looked to develop more visibility of the at-risk population to prevent more from falling into homelessness. this budget supports that plan. so, madam chairman and members of the committee, we are committed to the responsible use of resources you provide and the resources we seek in the 2013 budget. i know that is a question some of you have posed, but for both, the 2013 budget and advanced appropriations request, we are committed to the responsible use. again, thank you for this opportunity to appear before this committee. >> thank you very much, mr. secretary. let me begin the questions by getting this one off the table. it is on the issue of

sequestration. i believe all va programs and medicare are exempt from cuts. there is ambiguity in the act and existing law. when i asked the acting omb director to address this in the committee hearing two weeks ago, he said omb has yet to make a final determination. i'm concerned by not settling this now, we are failing to provide the veterans with the clarity they deserve to have. do you believe that all va programs, including medical care are exempt from future cuts? >> i think, madam chairman, the answer the omb director provided you is the same. i believe they are still addressing the issue. for my purposes, i would tell you i'm not planning on

sequestration. i'm addressing my requirements and presenting my budget as you would expect me to do. i think sequestration in part or in whole is not a good policy. i think the president would argue that the best approach here is a balanced deficit reduction and he believes that the budget he has presented does that and i ask that the congress look at that budget and favorably consider it. >> i hope that is the outcome. we want to provide clarity to the veterans who are concerned about the issue. mr. secretary, last year, we talked a lot about mental health care and i think we, together, uncovered a lot of serious issues. best summed up by a veteran i heard from recently who uses the ann arbor medical center.

he had glowing things to say about his health care providers once he got in. in order to address the issues, va has to have enough resources to keep up with the veterans who are seeking that mental health care. over the course of the last fiscal year, the number of iraq and afghanistan veterans looking for mental health end up by 18%. i wanted to ask you this morning if you believe the increase in the funding budget request is sufficient to accomplish the goals and keep up with this increasing demand? >> i believe that the budget, if you look at the '13 budget request, it is adequate for us to meet what we understand our requirements are in '13.

are there issues out there that will discover between now and execution of the budget? i would say if we do, madam chairman, i would be the first to tell you. you asked us to do a survey and we did. it was hastily done. senator bird referred to the output in the survey. out of 20,000 of our mental health providers, 319 were surveyed. the results were as described. my question of vha was did you go to the places there would be problems. the answer was yes because we were asked to go figure this out. i would say we got a pretty pure response. what i think we need to do is make sure we take a broader look and make sure we understand across the larger population, what our issues are and where there are opportunities for

reallocation or, you know, as it becomes clear to hire more people. i would offer to the chair, i took a look at what we have done in mental health over the last four budgets. if we look at '12 to '13, it is rather unimpressive. it is 5% and it matches the increase in the medical budget. between '09 and '13, our increase is 39% in mental health. if you include the advance, it will go up 45%. >> that is the result of the number of soldiers coming home with the invisible wounds of war which is increasing? >> true. we are anticipating a larger requirement here in the out years if we don't have clarity. we want to do a larger survey

here as i indicated. then see what the outcomes are. let me turn to there petzel for details. >> thank you, mr. secretary. madam chairman, as a result of the hearing we had earlier in the year, we have now done two things that are, i think, important and on point with regard to your question. we have developed a staffing model. it is the only staffing model available about mental ehealth. it is in the beginning stages, but giving us an idea of the need. we are site visiting all 152 of our medical centers to look at the access to mental health services. both the initial appointment and subsequent appointments for ptsd

or individual psycho therapy. what we are finding is there is -- we do meet the criteria for the first appointment in most every instance. we are having some difficulty in some parts of the country making the next appointment in the timely fashion. getting them into the specialty services. this could be the result of three things. one is do we have enough staff out there? have we given enough positions and resources? two, are those positions filled? are they filling those up in a timely fashion? the third is are we getting the appropriate level of productivity out of each one of those people? if we do discover as the secretary just mentioned that we do have additional needs that are unmet, i can guarantee we will be in communication with the committee about the needs and further discussion. >> i appreciate that. this is a top priority for us this year.

>> i would share that in fy '11, we hired about 897 additional mental health professionals bringing us up to 20,500. >> thank you very much. senator bird. >> thank you, madam chairman. since the chair just asked about mental health, let me ask if my information is correct. there were 1,500 open mental health positions. is that accurate? >> dr. petzel. >> in december of 2011, there were 1,500 mental health slots unfilled. >> out of 20,500, that is true.

>> i wanted to make sure that is correct. i want to thank you for something unrelated to the budget hearing. march 31st in north carolina, we will have the first in the country, welcome home vietnam vets day. i want to thank you for the cooperation in making sure the va presence is there to make sure we are able to catch those who have fallen through the cracks and work with those who have problems and will have a va mobile presence there as we will from d.o.d. and a lot of private sector entities that are working on employment placement. i think this is a very, very special event that is long overdue. hopefully it is the first of a total of 50 that are held around the country. i thank you for your participation. i ask that chart number one go up. i asked for measures that were

heading in the wrong direction when it comes to claims processing. i want to talk about the quality of va's decisions on disability claims. your goal is to have 98% accuracy. for the past three years, accuracy nation wide has been about 84%. as of december of '11, the offices around the country varied from 94 to 61. mr. secretary, in total, how much is va requesting for '13 budget to carry out all of the quality initiatives, including the quality review teams at each of the regional offices? >> thanks, senator. let me turn to secretary hickey. >> i'm glad you are asking about this issue. thank you for your question. i'm glad you are asking about quality. we are focused on production and quality. it is not a trade for one or the

other. i can't give you the specifics on each one of the costs, but i can tell you we expect the impact to be significant in our ability to produce a higher accurate and more consistent response across the board. it is not just the quality review teams, but they are a critical part of this. for those of you who may not be aware of what those are, we have taken what is nationally recognized by you all and members of committee and your staffs, our star accuracy team out of nashville, tennessee. we have replicated their skill level and training and what they do every single day inside every single office across the nation. their responsibility will be not to just check quality at the end of the process or quality at the end, but to do a new part of the process that works closely with our employees in a training environment to check different parts in our process where we make most errors and to correct those early. >> at what point on a calendar

would you make a determination of the quality initiatives will work and what indicators would you look at to make that decision? >> thank you, senator, for your follow-up question. we have already done that. no initiative that we have in the transformation plan of the 40 initiatives in the category that are trained to do the work and adjusted our environments or technology solutions have not been tried, tested, measured for impact before we are implements. on the quality review team. >> at some point, you have to say we are going to look at it and see if this is working. >> we did, sir. absolutely did. we did it in local pilots. we announced this week. >> a year from now when we get together for the '14 budget, if the quality is not improved or the timeliness down, it will have failed? >> no, sir.

i don't expect the quality not to have improved. we have very significant decisions and initiatives. >> my point is what if it doesn't? >> sir, we will adjust as necessary to find the reasons why we will attack that. i don't expect that to be the answer. i expect to see the improvement in quality and production. >> thank you. >> senator, quality is a function of trained people with the right tools. we're working on both items right now. >> my question was simple, mr. secretary. at what point will we determine what we implemented is working? >> we will be happy to provide that. we set a target of ending this issue with backlog in 2015. we begin fielding the automation tool we have been building for two years. fourth quarter of this fiscal year. we expect the tool rolled out

nationally throughout '13. as we do that, we expect speed and kwaquality go up. >> if i could ask for one more question. va made this projection last year at the budget hearing. productivity due to the overall transformation plan which will rise from 89 annual claims per direct labor in 2012 to 129 in 2015. as you can see from the chart, we talked about productivity last year at 79.5%. this year, we are looking at 73.5%. what percentage increase in individual productivity do you expect do you expect from the veterans benefit management system and what percent do you expect from other initiatives that are underway? >> well, i'll turn to secretary

hickey for the details. i would say what these charts don't reflect, senator, is that in the last three years we have taken on some other projects that aren't accounted for. g.i. bill, requirement to get that up and running and today we have over 600,000 youngsters in college under an automated system that didn't exist in 2009. i think we all recall that first semester we had to do everything manually. it was not the prettiest processing event. but we did that manually. got 173,000 youngsters in a school and on their path to the future and at the same time, we began building this automation tool for the g.i. bill. by april we had the first part of the tool out and fielded and

we have added four or five more programs to make it more productive. we'll get better over time. it's hard for me to give you a day and a month when this quality factor will meet any of our expectations, but we set 2015 as the date in which we would have the backlog solved and the quality at 98%. that's what we're focused on. i'll give you the best weight points that we can figure out, but that will be a product of what we are doing to train our work force and what we're doing to give them the right tools. we are talking the right tools now. but in the same time, your question about the growth and our human resource investments for the department, we train nearly 300,000 of our workers. many of them who have never been trained on their jobs. so they can produce what we

expect and that they can leverage these tools when they arrive. >> thank you, senator burr. i would like to say thank you to you and to chairman murray and your leadership and the members of this team, this committee, for, you know, unprecedented level of increases that we have enjoyed in the last three years. i think we need to put that in a little context. that 36% was used to tackle a 48% increase in claims over the same period of time. and that was to support nearly 12 million service members, their families and survivors and that's including a net increase in the last year of half a million new veterans to our rolls that did not exist and are using our benefits and services. so we did also for the second year in a row complete more than a million claims using those resources.

that's 16% more claims per year than we have done in 2008 before that chart started doing some of those things. i will tell you, i have put frankly on the table, we have put more than $3.3 billion and i thank you for celebrating our vietnam veterans. we put more than $3.3 billion into the hands of 317,000 of the veterans out there. that had an impact on that line. that impact was there were 260,000 other claims in backlog we did not get to. that also had an impact on fte because to do those right and well, we put two times the fte associated with each one of the claims on those very difficult complex 50-year-old claims. in addition, we stood up in the same period of time and put four times the level of fte to our most wounded, ill and injured in our integrated disability and evaluation system to get those folks taken care of right and well the first time. so that also had an impact on the line that you have laid out

in front of us. the positive news about all of that is we are done, we're down to the tens of ten levels kind of double digit levels of the agent orange cases. 99.9% done through the 250,000 cases. we are now capable of shifting all those 13 resource centers we had across the nation that were hunkered down doing the agent oranges. one march tomorrow, we're shifting that all back into normal backlog caseload. it will be focused on our benefits at discharge veterans. it will be focused on our quick start veterans and it will be focused frankly on our oldest cases we have on the books during the month of march. >> thanks. senator kaka.

>> thank you. general shinseki, we face problems with those veterans living in rural and remote areas and this is especially true in places like alaska and hawaii where you can't get to some places by jumping in a car and driving there. i know that you're working on on with the indian health services to help provide services to the native american veterans, and i commend you and all your -- all your involvement in these efforts. ms. secretary, can i get your commitment to look into possible ways of working with the native hawaiian healthcare systems and native american veteran systems to provide services for this

case, native hawaiian veterans who live in the rural parts of the state of hawaii? >> senator, you have my assurance that we will do our utmost to provide for my of our veterans, wherever they live. the most rural and remote areas. the same access and quality to healthcare and services as we provide to someone living in a more urban area. there is a challenge with that, but we are not insensitive to that challenge and we're working hard to provide v.a. provided services and where we can't to make arrangements where if quality services exist in those areas, making arrangements for veterans to be able to participate in those local opportunities.

we are i think you know working and have been now for some time on signing an mou with the indian health service where wherever they have facilities and we have vested interest that an eligible veteran going to the indian health service facility will be covered by v.a.'s payments. and we're in stages of trying to bring that mou to conclusion. we intend to do that. and where tribes approach us prior to the signing of the mou and want to establish from the tribal nation with v.a. a direct relationship because they have a medical facility and would like us to provide the same coverage, we're willing to do that. but that would be on a case by case basis. >> thank you.

secretary shinseki, staffing shortages continue to be a problem, although there's been progress. some clinics are seeing staffing levels below 50%, causing excessive waiting times for veterans that need care. and i understand this is an issue you've been working on. as you know, the number of veterans needing services is growing yearly and it shows that you have been making progress. can you provide an update on that? >> mr. secretary, thank you. thank you for the question. the -- we have addressed -- we

have talked about mental health earlier and the efforts that we're making to try to assess whether there's adequate staffing there. i think you're probably talking about primary care. which is our largest outpatient clinic operation. we treat 4.2 million veterans in our primary care system and it accounts for the lion's share of our budget expenditures. we assessed staffing three years ago when we began to implement what we call the patient align care treat or pac program and we're finding that we are now age to -- able to bring up the support staffing and the physician staffing to reasonable levels associated with the standards around the country. i would be -- i would like to take off record -- you have line any information you have about whether there's a 50% vacancy