so we appreciate all that you guys have done in the past and are looking forward to you doing a bunch in the future. and i yield back, madam chair. >> all right. thank you very much. with that i want to welcome again secretary shinseki. thank you for coming here today to give your perspective on the department's fiscal year 2013 budget and the fiscal year 2014 advanced appropriation request. secretary shinseki's accompanied today by steve marrow, undersecretary for memorial affairs, allison hickey, undersecretary for benefits, dr. robert petzel, undersecretary for health. we also have todd grahams, executive in charge for the office of management and chief financial officer, and roger baker, assistant secretary for information and technology. thank you all for joining us today, secretary shinseki. your remarks will of course appear in the record. but we welcome your opening statement. >> thank you, madam chairman. ranking member burr,

distinguished members of the senate committee on veterans affairs, thank you again. and i look forward to these. this is an opportunity to extend the dialogue we have in other fora. but thanks for this opportunity to present, as chairwoman -- the chairman said, the president's 2013 budget and 2014 advanced appropriations requests for va. this committee has a long history of strong support for our nation's veterans, and i can speak to that firsthand, having worked personally the past three budgets with you. the president has demonstrated his own respect and sense of obligation for our 22 million veterans by saying to the congress once again another strong budget request for va. and i thank the members for your unwavering commitment, and i am here to answer your questions but seek your support on this budget request. i'd also like to acknowledge the representatives from our veterans service organizations who are here today. i will tell you as we develop our budget their insights, their experience is helpful as we put together our arguments for resources. and as we strive to continuously

improve our programs. madam chairman, thanks for introducing the members of the panel. i have a written statement which i ask to be submitted for the record. this hearing occurs at an important moment in our nation's history. not the only one. there have been others that i could refer to. i'm old enough to have experienced our return from vietnam and to have witnessed personally the end of the cold war. we are again in another period of transition, an important one. our troops have returned home

from iraq, and their numbers in afghanistan are likely to decline over time. and history suggests, as the chair indicated, va's requirements from these two operational missions will continue to grow for some time, long after the last combatant leaves afghanistan. maybe as much as a decade. maybe even more. we must provide access to quality care, timely benefits and services, and job opportunities for every generation of veterans. and the generation at hand is the one that comes home today from iraq and afghanistan. in the next five years more than a million veterans are expected to leave military service. this generation relies on va at unprecedented levels. through september 2011 of approximately 1.4 billion 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 mission. health care for 8.8 million enrolled veterans. compensation and pension benefits for nearly 4.2 million veterans. life insurance coverage -- life insurance covering 7.1 million active-duty service members and enrolled veterans at a 95% customer satisfaction rating. educational assistance for over a million veterans and family members on over 6,500 campuses. home mortgages and veteran loans with the nation's lowest foreclosure rates. burial honors for nearly 120,000 heroes and eligible family members and our 131 national cemeteries befitting their service to our nation. this 2013 budget request continues the momentum, and our three priorities that you heard me speak about over the past three years, increasing access to care, benefits, and services. eliminating claims -- the claims

backlog. and ending veterans' homelessness through effective, efficient, accountable use of the resources you provide. access encompasses va's facilities, programs, and technology. it's a broad term, but there's a lot that it encompasses. this 2013 budget request allows va to continue improving access by opening new or improved facilities closer to where veterans live and providing telehealth and telemedicine linkages, connectivity, including in some cases where it's needed, in veterans' homes. also, by fundamentally transforming veterans' access to benefits through a new electronic tool called the veterans' relationship management system, this is an effort to get out our telephones. by collaborating with d.o.d. to

turn the current transition assistance program that we both share, tap into an outcomes-based training and education program that fully prepares the parting service members for the next phase of their lives. and by establishing a national cemetery presence in eight rural areas and better serving rural and women veterans. and i'm happy to provide details later. we expect that more than 1 million veterans will leave the military in the next five years. potentially all will enroll in va. over 600,000 of them based on our historical trend. over 600,000 of them will likely seek care, benefits, and services from va in the out years. regarding the backlog, from what we know now, fy 2013 will be the first year in which -- first year in a long time 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, an automation trial

becomes critical to reversing backlog growth and increasing quality. we must not hesitate. stability and i.t. funding is critical to our success. homelessness. from january 2010 to january 2011 alone the estimated number of homeless veterans declined by 12%. we have created momentum and the homeless program. much remains to be done to end veterans' homelessness by 2015, and the 2013 budget is a presentation of how we continue to do that. we're now developing a dynamic homeless veterans registry. i think you appreciate that much of what we understand about homelessness is an estimate of real numbers. we're not able to count everyone out there. but it's a valid statistically valid process.

in the meantime, over the past three years we've been building a registry of former and current veterans by name, so we know who they are, what their issues are, the individual level of concern that has been expressed here, what their issues are, where they reside, and whether they are migratory and move from one va footprint to the next. so as we think about adjusting the footprint, based on what we see day to day, we want to be careful that we're not doing something that ignores maybe an issue that is going to require help. so building a veterans registry today over 400,000 names of currently and formerly homeless veteran, allowing us to better see, track, and understand the real causes of veterans' homelessness. and in the years ahead we think this information will not only help us more effectively prevent it, that's where we're headed,

not just for veterans but perhaps for other communities as well. where we have partnered in taking on the homeless issue. we look to develop more visibility of the at-risk veteran operation in order to prevent veterans from falling into homelessness. and 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 resources we seek in the 2013 budget. and i know that's been a question some of you have posed. but for both 2013 budget, 2014 advanced appropriations request, we're committed to the responsible use. and again, thank you for this opportunity to appear before this committee. >> thank you very much, mr. secretary. and let me begin the questions by getting this one off the table. it's on the issue of sequestration and cuts to spending. like i said in my opening remarks, i believe that all va programs including medical care are exempt from cuts, but there is some ambiguity between the

budget act and the existing law. and when i asked the acting omb director to address this issue during a budget committee hearing two weeks ago, he said omb has yet to make a final determination. so i'm concerned that by not settling this issue now we are not only failing to provide our veterans with the clarity they really deserve to have. so while you're here i wanted to ask you, do you believe that all va programs including medical care are exempt from any future cuts? >> i think, madam chairman, the answer that the omb director is providing you is the same one that i understand. they are still addressing the issue. for my purposes i would tell you i'm not planning on sequestration. i am addressing my requirements and presenting my budget as you would expect me to do. i think sequestration in part or in whole is not necessarily good policy. and 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 asked that the congress look at that budget and favorably consider it. >> i think we all hope that that is the outcome, but we want to provide clarity to our veterans. they're very concerned about this issue. mr. secretary, last year we talked a lot about mental health care, and i think together we uncovered a lot of serious issues, best summed up by a veteran that i heard from recently who uses the ann arbor medical center, had to wait months and months to get into counseling, but then he had glowing things to say about his

mental health care providers once he got in. so in order to address those types of issues, va has to be certain it has enough resources to not only keep up with the increasing number of veterans who are seeking mental health care but also to bring down to unacceptably long wait time. over the course of the last fiscal year the number of iraq and afghanistan veterans who are looking for mental health care went up by about 5%. that's about 18,000 veterans every quarter. so i wanted to ask you this morning if you believe the increase in mental health funding in the 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, i think it's adequate for us to meet what we understand our requirements are in '13. are there issues out there we'll discover between now and execution of a budget? i would say if we do, madam chairman, i'd be the first to tell you. now, you asked us to do a

survey, and we did. it was very hastily done. senator burr referred to some of the output, conclusions out of that survey. out of 20,000 of our health care, mental health providers, 319 surveyed, and the results were as described. my question of vha was did you go to the places you thought there would be problems? and the answer is yes because we were asked to go figure this out. so i would say we got a pretty pure response. what i think we need to do is make sure we're going to take another broader look here and make sure we understand across the larger population what our issues are and where there are opportunities for reallocation or as it becomes clear to hire more people.

i would offer to the chair, i took a look at what we've done on mental health over the last four budgets. if we look at 12 to 13, it's rather unimpressive. i mean, it's 5%, and it matches the increase in the medical budget, but between 9 and 13, our increase is 39% in mental health. and if you include the 14 advanced appropes it will go up 45%. >> and that's a result of the number of soldiers who are coming home with the invisible wounds of war, which is dramatically increasing, correct? >> true. but we are -- we're trying to anticipate that there's going to be a larger requirement here in the out years even if we don't have clarity. we're trying to prepare for that. we want to do a larger survey here, as i indicated. and then see what the outcomes

are. but let me turn to dr. petzel for any details. >> thank you, mr. secretary. madam chairman, as a result of the hearing that 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. one is that we've developed a staffing model. it is the only staffing model that i know that's available about mental health. it's in the beginning stages, but it is giving us some information about what the need might be. but i think more importantly we're 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 be it for ptsd inpatient program, a group program, or individual psychotherapy. and what we're finding is there is -- we do meet the criteria for the first appointment in most every instance. we're having some difficulty in some parts of the country making

the next appointment in a timely fashion, getting them as you mentioned earlier into the specialty services. this could be the result of three things 37 one is do we have enough staff out there? have we given enough positions, enough resources? two is are those positions filled? are we filling those positions up in a timely fashion? and 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 you we will be in communication with the committee about those needs and in for discussion. >> okay. i appreciate that. this is a top priority for us this year. >> i would just share that in

fy11 we hired about 897 additional mental health professionals, bringing us up to about 20,500 mental health professionals. so the interest is there in trying to determine what the requirement is. and we're not hesitant about increasing those numbers. >> okay. thank you very much. senator burr? >> thank you, chairman. since the chair just asked about mental health, let me just ask if my information's correct. in december va polled their facilities and they found that there were 1,500 open mental health positions. is that accurate? >> let me turn to dr. petzel. >> would you repeat that number? >> in december of 2011 the va polled their facilities and found there were 1,500 mental health slots that were unfilled. >> out of 20,500 that's true, yes. >> okay. i just wanted to make sure the information i had was correct. mr. secretary, i want to thank you for something unrelated to this budget hearing. march 31st in north carolina we

will have the first in the country welcome home vietnam vets day. an all-day event. and i want to thank you for the va's cooperation at making sure that the va presence is there to make sure that we are able to catch those who have fallen through the cracks, work with those who have problems, and 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 special event that's long overdue and hopefully it will be the first of a total of 50 that are held around this country. and i thank you for the va's participation. i'm going to ask for chart number 1 to go up.

earlier i mentioned a number of performance metrics that seem to be heading in the wrong direction when it comes to claims processing. but i want to start by talking about the quality of va's decisions on disability claims. your goal is to have 98% accuracy. but for the past three years accuracy nationwide has been about 84%. and as of december '011 the accuracy rate at regional offices around the country varied from 94 to 61. mr. secretary, in total how much is va requesting for '013 budget to carry out all of those quality initiatives including the quality review teams at each of the regional offices? >> thanks, senator. let me turn to secretary hickey to answer that. >> senator burr, thank you for your question. and i will say i'm glad you're asking us about -- thank you. senator burr, thank you for your question. i'm glad you're asking about quality because we're very focused on both production and quality.

it's not a trade for one and the other. i can't give you the very specifics on each one of those 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's not just the quality review teams. but they are a critical part of this. and for those of you that may not be aware of what those are, we have taken what is nationally recognized even by you all and members of this committee and your staffs, our star accuracy team based out of nashville, tennessee. we have replicated their skill level, their training, and what they do every single day now inside every single regional office across the nation.

their responsibility will be not just to check quality at the end of the process or inspect 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 as to whether those quality initiatives are going to work, and what indicators would you look at to make that decision? >> so thank you, senator, for your follow-up question. i'll tell you, we've already done that. no initiative that we have in our transformation plan of the 40-plus initiatives in the people category of those things, how we're organized and trained to do our work, in the process environment, how we've adjusted and some of our environments or in our technology solutions have not been tried, tested, measured for impact before we're implementing. so in fact on the quality review team -- >> but at some point you've got to say we're going to look at it and see if this is working. >> we did, sir. absolutely did. and we did it in local pilots, and we just announced this week -- >> so a year from now when we get together for the '014 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 some very significant decisions and initiatives. >> my point is what if it doesn't? >> sir, then we will adjust as necessary to find the reasons why. we will tackle that hard. but i don't expect that to be the answer. i expect us to see improvement in both quality and production. >> senator, if i might, quality is a function of trained people with the right tools. and we're working on both items right now. >> my question was simple, mr. secretary. at what point will we determine whether what we've implemented is working? >> fair. we'll be happy to provide that. we set a target of ending this issue with backlog in 2015. we begin fielding the automation tool we've been building for two years fourth quarter of this fiscal year. we expect that the tool will be rolled out nationally throughout '13, this budget. and as we do that we expect both speed and quality to go up. >> if i could ask the chair for just one additional question on

this round. and i would call up the second slide. va made this projection last year at the budget hearing. productivity due to the impact of 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're looking at 73.5%. what percentage increase in individual productivity do you expect from the veterans benefit management system? and what percent do you expect from other initiatives that are under way? >> 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've taken on some other projects that aren't accounted for here. gi bill.

requirement to get that program up and running. and today we have over 600,000 youngsters in college under an automated system that didn't exist in 2009. and i think we all recall that first semester we had to do everything manually and 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. at the same time we began building this automation tool for the g.i. bill. by april we had the first part of that tool out fielded, and we've 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 way points that we can figure out. but that'll be a product of what we're doing to train our workforce and what we're doing to claim the right tools. we're talking about the right tools now. but in the same time your question about the growth in our human resource investments for the department. we trained nearly 300,000 of our workers, many of whom have never been trained, on their job so they can produce what they expect and that they can leverage these tools when they arrive. >> thank you, senator burr. i would just like to first start by saying thank you to you and to chairman murray and your

leadership and the members of this team -- this committee for an unprecedented level of increases, budget increases that vba has enjoyed in the last three years. i think we need to kind of 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, veterans, 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've done in 2008, before that chart started doing some of those things.

i will tell you and put frankly on the table, we've 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 117,000 of those vietnam veterans out there in the last year. that had an impact on that line. the impact was there were 260,000 other claims in backlog we did not get to that also had an impact on fte because we put to do those right and well we put two times the fte associated with each one of those 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've 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 nemer cases 99.9% done through those 250,000 cases. we are now capable of shifting all those 13 resource centers we had across the nation that were hunkered down doing those nemer agent oranges. tomorrow we're shifting that all back into normal backlog case load that 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. >> thank you, senator burr. senator akaka. >> thank you, madam chairman. general shinseki, as we know, we

often face challenges in treating our veterans who live in many rural and remote areas. this is especially true of places like alaska and hawaii, where you just can't get into some place business jumping in a car and driving there. i know that you're working on an m.o.u. with the indian health service to find solutions to help provide services to our native american veterans. and i commend you and all you're involved in these efforts. mr. secretary, can i get your commitment to look into possible ways of working with the native hawaiian health care systems and native american veteran systems to provide services for in this case native hawaiian veterans wh