country are obvious in our discussion. today v.a. is failing our nation's veterans. from all accounts, the issues plaguing v.a. are systemic and require big change. certainly in the current culture. this agency is broken. we need a leader at the top, determined to and equipped with the skills to change the pattern and get us back to our main mission and responsibilities. the stories coming out of the vmcs across the country are simply heartbreaking and unacceptable. i firmly believe that a lack of accountability is the root cause of the problem that's facing v.a. today. although the mission of the v.a. is different from other federal agencies, it's still part of the bureaucracy in washington, and as we all know, bureaucracy the

position of the v.a. secretary comes with tremendous responsibility and commands someone who understands the sacrifices and needs of both our veterans and their families. the next secretary of the v.a. must be willing and ready to lead the v.a. in a new direction. while i'm grateful for the service of both general shinseki and acting secretary sloan gibson, and thousands of dedicated employees on the ground, i believe the current state of v.a. affairs -- or the affairs at v.a. demands bold leadership and a complete transformation in the culture at the agency. the problems facing the v.a. did not happen overnight. solving them will not be an easy task, but despite this, i believe with the right person at the helm, a person willing to work with congress and other stakeholders, the challenges facing the v.a. can be met and expectations exceeded. at the end of the day, we must

never forget our nation's veterans. the sacrifice and service to this nation is second to none. not only does it deserve our gratitude, but they deserve the benefits that they have earned, delivered consistently and timely. anything less is unacceptable. their commitment to country is without question, and our commitment to them must be the same. i'll close with this. i believe choosing the next secretary is the first only the first of many to get the v.a. in the right direct. i'm committed with our colleagues to the change that the agency so desperately needs. i welcome you and thank you for your willingness to serve, for being here today, and i look forward to hearing directly from you, mr. mcdonald, in your testimony on the vision for v.a. thank you, mr. chairman.

senat senator? >> thank you to your family, because it's going to be a lot of stress on them. i know that, so thank you. it's a work add a lot of commitment to participate in this way, especially with this unique time. you're going to hear a lot of noise out there. one thing about d.c. is the noise happens every minute and changes every minute. my hope is, the next second tear, i think it's important that you hone in and be bold about what needs to be done, not hesitate and when people need to be let go, you let them go i

used to also be a mayor of a city, which is you had to let some people go, maybe it wasn't the best time for them, but it was important for the broader spectrum of what you were trying to do. as i look at the resume, i commend you for it. i think a lot of people are putting a lot of expectation on you, which you probably want to lower that when you do using opening, as quickly as possible. i look at you and think to myself this is an opportunity as many have said to take a situation with the v.a. that is struggling, struggling with trust among the public and its recipients, to the legislative bodies, to figure out what to do next and how to do it. i will also say, and i know you'll hear it from both sides, and i'm hopeful that we do have a comprehensive reform bill, but that's not going to be the only answer. the reality is many of those things we'll put in the legislation is you can do right

now. you can take charge and do these things. i would ask you not to wait for us. the minute you're confirmed, get busy, because there are too many needs in alaska, with 77,000 veterans waiting for care. we didn't wait around five years ago when i got elected, when i saw a waiting list of 1,000, you know, this is not new. last week i was here, i presented a report in 2003, 11 years ago, the same story. it's like deja vu, here we go again. i wasn't there then, but i'm here now. in alaska we have done some things that are innovative. we don't have a veterans hospital like many states. we have a clinic, and then the hospital is in seattle. but one fifth of the size of the country is alaska, in its size and vastness. we have to think of different things to make sure every veteran can get access. we've done that in a way to manage it, so we can manage

expectations, because i think some people will say, just open up the system to every private doctor in the world, and it will all be solved. i don't know how long it takes you to get a doctor's appointment. i know what it takes me, and if anyone needs mental health services in this country, the waiting list is a mile long. i'm anxious for you to get on the job. i hope you don't get up into the politics of what goss on around this place. i notice by your sdloer, we may have difference in our past politics, but that's the greatest bit about in committee, we look at what you can do. i'm looking forward to it. you'll probably hear a lot from me, because i am a detailed person about how to deliver a system we have more improvements to do. i think there's huge

opportunities around the country that you can take right now. waiting for us, and i would hope we would have a bill before we break, but if we don't, and we get you confirmed, get busy. be bold. not reckless, but be bold. inform us as you move forward. keep us in the loop. sometimes that is informing us, we may not want to hear what you have to tell us, but moving forward is more important. i i'll have some questions when we get to q&a, but your public service a an important part of serving this country. i thank you for the second time of serving our country. i appreciate it. >> thank you, senator begich. mr. mcdonald, we are pleased to hear from you. before we do that, let me swear you in, please. doi solemnly swear or affirm the testimony you're going to give better the senate committee on

veterans affairs will be the truth, the whole truth, and nothing but the truth, so help you god. >> i do. thank you very much. mr. mcdonald, we are pleased to hear your testimony. >> thank you chairman sanders. thank you ravening member, and members here of the committee. thank you for the privilege to address you here today. i'm honored to be seeking the endorsement to become the secretary of veteran affairs. thank you for scheduling this hear so expeditiously. i'd like to introduce my wife of nearly 37 years, dean, who is sitting behind me. we are blessed with a wonderful family. however, only dean was able to be here today. >> i thank you for the fine is.

>> to make ohio greater. i very much appreciate the confident of president obama, and i'm fully committed to fulfilling this charge to me, that's to transform the department into an organization that delivers on its mission. and by serving and honoring america's veterans. i also want to create an organization that lives by the core values -- integrity, commitment, advocacy, respect and excellence. over the last several weeks i've had the opportunity to meet with many of you individually. i deeply appreciate the committee's concern and unwavering support for our veterans and for the mission of the department of veteran affairs. i've listened carefully to your concerns and advice. ich benefited from your counsel.

as explained by senators brown and portman, my life's purpose has been to improve the lives of others. my time at west point and as an airborne ranger captain in the 82nd airborne division instilled a lifelong sense of duty to country. my values are steeped in my experiences at west point and in the military. thiol values allowed me to be an effective leader at procter & gamble. those values are what i will bring to the management of v.a. i am still guided by that cadet prayer which encouraged us to choose the harder right rather than the easier wrong. to me taking care of veterans is re personal. i come from and care deeply for military families. my father served in the army air corps after world war ii. my wife's father was shot down over europe and survived harsh

treatment as a p.o.w. her uncle was exposed to agent orange in vietnam and still receives care from the v.a. my nephew right now is in the air force flying missions over the middle east. my 33 years with procter & gamble taught me the importance of effective management, strong leadership, and of being responsive to the needs of customers. when you joined the company in 1980, we recorded $10 million in sales. today that business is over eight times larger at $84 billion, with almost double the number of employees, and p & g's brands are present in nearly every country of the world. i helped lead this transformation. i'm a forward-looking leader who spent my business career expanding p & g to serve new, emerging and underserved customers. that's the experience needed to modernize the v.a. as i met with members of this committee over the past few weeks, you've told me the depth

of crisis at the department of veterans affairs. while there's much that's going well, there have been systematic failures, which suggests some in the organization have lost track of the mission and core values. the department's problems with access, transparency and accountability, integrity are all well documented. there's a lot of work to do to transform the department. it won't be easy, but it is essential, and it can be achieved. the seriousness of this moment demands act. if confirmed i pledge to the committee and to the nation's veterans to take a series of immediate actions in the first 90 days to deliver the reforms our veterans deserve. i will put the veteran at the center of everything we do, consistent with our mission. if confirmed on day one, i will lay out my leadership vision directly to all v.a. employees. my charge will be to provide veterans the care that they have

earned in the most effective way possible. i will ask employees to join me in recommitting to the core values. i also plan to ask employees to bring forward any information, any concerns, any problems that exist so that i as the leader, i ewe know the full picture of what's going wrong and what we can improve. if confirmed, i would reward -- i have much to learn about the organization. i look forward to gaining valuable input and insights from its employees, as well as veterans and other stakeholders. if confirmed so that every individual in the organization knows how their work every single day ties back to the strategic plan and to the

mission of caring for vet advance. by getting out in the field and talking with veterans and employees, i will learn much about the organization as possible, and i'll be able to determine the processes that would need to be reorganized or streamlined. in order to regain the trust of the american people and most importantly veterans, we must ensure every employees has an action plan in the annual performance review that rolls up to the strategic plan and the mission for the department. the majority of employees at v.a. are dedicated to the mission and the values of the organization, but those employees that have violated the trust of the nation and of veterans must be and will be held accountable. between the employees and leadership. i also plan to travel extensively over the first several months to hear directly from employees, veterans and other stakeholders.

i plan to establish a board of physicians to advise the secretary on best practices for delivering timely and quality health care. if confirmed, i will focus on reorganizing the department to more effectively use our resources to get care that the vet advance deserve and have earned. the department must improve its forecasting and develop a strategy for meeting increased demand. to free human resources that can be applied more to the care of vet advance further, i plan to take advantage of the scale to improve productivity and flow more people to the work. it's clear the v.a. must be most efficient and more productive. the department needs to demonstrate that it can manage a complex fa tilts portfolio, that it can create with the department of defense an integrated records system that

it can regularly and acrately produce key data for decision makers and oversight entities. most importantly produce the veterans the highest quality and cost-effective benefits possible. all of these things are possible. they are possible through some of the steps i've outlined here. if confirmed, i will work to transform the department of veterans affairs. i will continue to partner with you and all of the department's stakeholders. v.a. has made great strides in serving -- and the hard work with our partners and advocates in the community. but the v.a. is in crisis. the veterans are in need there is much to do, but i can think of no higher calling to serve our vet advance who have so selflessly served all of us.

with your support i'm confidence we will succeed at the department of veterans affairs. thank you. i look forward to your questions. >> well, thank you very much for your testimony. in a sense, i think you have answered my first question, but i'm going to ask it again. you don't need this job. i don't think you're at the age in your career when you want to move up the career ladder, you don't need anything more to year resume. i have do-- you have done prett well. in the midst of a dysfunctional congress, in the midst of partisanship, why do you want this job? >> thank you, chairman sanders, for the question. i think it's a good question. it's a question my family and i have talked a lot about. i desperately want this job, because i think i can make a difference. i think that my entire career, whether it was starting at we

westpoint, being in the 82nd airborne division, being at procter gamble for 33 years, has prepared me to this task. as i said in my prepared remarks, i think there's no higher calling. this is an opportunity for me to make a difference in the lives of veterans who i care so deeply about. if not me, who? >> thank you for the response. one of the shies we are all struggling with is v.a. health care. i look at this issue a little bit different than some of my colleagues who seem to think in some cases that health care in this country is just fantastic and it's just the v.a. that seems to be having problems. and the other point that i want to make is not just the size of the v.a., 6.5 million people

coming in every year, and inevitable problems that are going to occur, but the fact that because the v.a. is a public entity and appropriately so, there is a lot more public attention to the problems facing the v.a. i'll give you an example. in the paper today, in "the washington post", john hopkins paid $190 million to more than 7,000 women for inappropriate behavior on the part of a physician. there was an article in "the washington post." if that happened at the v.a., there would be a dozen hears, articles for months to come, all kinds of investigations. john hopkins is a great hospital. problems happen. senator tester s. you indicated the lack of 20 physicians, just in the small state of montana. i know in vermont we lack physicians. all over this country, in

phoenix, god knows how many they lack? in a nation in which 40 million people have no health insurance, where we spend almost twice as much per capita as any other nation, where 45,000 people die because they don't get health care, how are you going to help us get the physicians we need in the midst of a physician shortage, the nurses we need in terms of nurse shortage, so that whether people attempt to get into the v.a., they get in in a timely manner and they get high quality health care? how do you do that within a dysfunctional health care system nationally? >> well, chairman sanders, i think, first of all we'll start with us giving you very transparent projections as to what we think the demand is and how many resources we will need. we'll have to build those from the bottom up. i promise you that i will be -- if confirmed, i will be open,

transparent with you as to what we think the need is. secondly we'll have to restore the reputation of the v.a. if anything, this crisis may have damaged the reputation of a great organization. we'll have to restore that. the way we do that is by acting quickly to make sure that every veteran in need gets the care they deserve. they can kell our positive stories for us form third, we'll have to do recruiting. we promote from within. i left the armas a captain, i started at the bottom of procter & gamble and worked my way up. we spend a lot of time on college campuses recruiting people. last year over 1 million applicants for newer that 5,000 jobs. that's because people want those jobs. it's a company they want to work for. v.a. is a health care system that people want to work for. what i need to do is help recruit the very best people for that system.

will you go to the medical schools of this country? >> yes, sir. >> the nursing schools of this country in order to bring bright young people into the system so that our veterans get quality health care? >> we've talked about the important role of leadership in changing culture. the fasterest way for a leader to change the culture is through their own behavior. if recruiting is important, which i believe it is, because we have a shortage, and we also have a time where the v.a. is in crisis, i think the leader has to play a role in recruiting the doctors and nurses and clinicians to help care for the veterans. >> all right. my last question deals with technology. there is no question -- i think no debate that v.a. has very outdated technology in terms of scheduling appointments, and maybe in other areas as well. what can you do to utilize the best technology to make the v.a.

a more efficient and cost-effective entity? >> i think technology is a real enabler. i think it's a high-leverage activity that as i said in my prepared remarks, would allow us to release some people and some resources, and flow them to the mission, which is to care for veterans. my undergraduate degree is in engineering. i studied computer science at west point, both hardware and software. i wrote an assembling program that took it from fortran to highlycreating molecules digitally, and shipping to our customers using digital technology. i think the same thing needs to be true for the v.a. we need to use technology in order to free um people that we can move to taking care of veterans. i plan to do that. >> thank you. i've gone over my time.

senator burr. >> thank you. we are truly grateful to you and deann and your family for this. part of my role is to conduct oversight with regard to v.a. activities. this often leads me or my staff to request briefings or orel materials from the v.a. if confirmed, will you ensure that my staff and i will be provided with requested information in a timely fashion? >> senator burr, as you and i talked when we were together, you will have my cell phone number. every member of the committee will have my cell phone number. i would expect if we're not meeting your needs, you will call me when you run a large corporation, you have a cell phone 24 hours a day, 7 days a week, it gets called.

if you have concerns, i want to react. >> will you be proactive in alerting this committee, including both sides of the aisle, about significant issues involving the v.a.? >> yes, sir. i believe no leader can do a job this big by themselves. i need your help, if confirmed. >> i have an opportunity to talk to ken langone at length. i think hi chairs the new york hospital. he told me this morning that the medical staff there is the same medical staff that we use at the v.a. facilities. we leverage that hospital staff to staff the v.a. facility. is that a model that we could expand around the country and leverage for any shortages that exist? is that a possibility? >> from what i know, that is relatively common. i know that -- i think from what i've read, two thirds of health

care professionals in the united states have at least trained in a v.a., if are not actively involved today. that would be something we would want to look at, particularly in a case where capacity is constrained and we need help. >> mr. mcdonald, i've been told that in 2011 the remarks a. began an initiative called the harmony project. this was to explore the pros and cons of further integrating or merging the operations of the v.a. and the department of defense health care systems. i believe this effort resulted in a report suggesting that the agency could improve -- while saving billions annually, but it's unclear to me whether the v.a. ever discussed the findings of that project with the department of defense, and whether any action was ever taken on that report. i don't expect you to know anything about the harmony

project, but can i get your commitment that you will go back and ask was there a harmony project in that you will review the project and you will provide the committee with a copy of the conclusion of that project? >> yes, sir, i would certain like to learn about it. demonstrating my own commitment to the importance of the department of defense and veterans affairs working together, i had the opportunity to meet with secretary hagel. we had a great meeting. we both committed to a partnership, a partnership that acting secretary gibson had also had with secretary hagel, and we both agree that it should not be the veterans fault or the service member's faults that there's a seam in the united states government between department of veterans affairs and the department of defense. that should be absolutely seamless for those who have taken the oath and then become veterans. i pledge and i know secretary

hagel does the same, to make that as saebless as possibility. >> if i could also get your commitment to find out and report back to congress or to the committee on what, if any, interactions have taken place between the v.a. and the department of defense about the concepts highlighted in the harmony project? >> senator, i'm not familiar with the project, so -- but we'll certainly take a look at it and get back to you on what we think about the different items in the harmony report. >> right, i appreciate that. i look forward to expediting the movement of your nomination, and i thank the chair. >> thank you. senator murray? >> thank you very much, mr. chairman. mr. mcdonald. i was really troubled to hear secretary shinseki say he felt like he was misled by directors. the department just can't function if the secretary is not getting honest information from

the field and taking appropriate action. if you're confirmed, how will you create a better team and build trust and transparency? irges -- >> on day one, you have to meet as many employees as i can. i've got to understand how they think about their role in the department. one of the things i pointed out is i think we have a pretty good strategic plan when i looked at the strategic plan on the internet. again i'm only looking at publicly available information, but the behavior of every employee in the department is not consistent with that strategic plan. we've got to develop a way to make sure the department -- that the behavior of every employees and that their expectation on their performance each year ties back to a strategic plan. >> you don't think that was happening prior? itches i don't want to judge, but i can tell you at the

procter & gamble company, one of the things we work hard to do is take our strategic plan and make sure every low ranking -- every employees if you rolled up their behavior every day, you would roll it up to that strategic plan. >> >> i agree with it, too. so how do you build that trust to give you the information so that you can -- >> i've got to be out there with the people in the field and we've got to have the leaders who are vigilant, making sure that that trust is real. it's unconscionable to me that you would have an organization where one of the stated values -- one of the stated values, the first stated value is integrity, yet you have people lying, and you have people tolerating it.

the west point honor code says we don't lie, cheat or steal, but we done tolerate people who do. you don't want people in xhur community lying, you don't tolerate them lying. we have got to get into this, understand it in greater depth. >> i appreciate that commitment. i've talked with prior v.a. leaders about some of the concerns in facilities in my home state washington. the audit flagged many of those facilities. the most recent wait time and quality data that v.a. released showed shortcomings at washington medical facilities. i have raised real concerns about what's happening with the spokane medical center, including whether staffing and budget shortfalls are hurting health care for veterans. if you're confirmed, how will you not just specifically spokane, but how are you going to confirm oversight of these facilities and make sure that the resources are getting to the places where it's needed?

>> well, i think that's part of the forecasting and projecting that i was talking about in conjunction with the strategic plan. what i heard from secretary gibson last week during thinks testimony was that the v.a. had not done a bottoms-up forecast before, and that he was having some trouble getting that done. we've got to do a better job of that. we've got to be very open and transparent with all of you as to what we're forecasting. we have to put the systems in place. we've got to be able to have the doctors, the nurses, the clinicians on the ground to be able to do that. i think digital technology will also play a role. if we can get a scheduling system that is equally world class, and there's no reason we

can't i think we'll be able to use that. >> that's the veterans transition into civilian life. many of them are using their g.i. education benefit. back in 2012, i passed legislation to make sure that our veterans have the facts available, so they can make informed decisions so they are spending the g.i. bill wisely. recently a gao found that schools may provide inaccurate or incomplete information to prospective student veterans and they want objective advice when making their own decisions. i know you aren't in there yet, but one of the things i hope you focus on is helping make sure our veterans make good choice when is they use those education dollars. >> if confirmed, i will certainly focus on that.

i myself am a beneficiary of the g.i. bill. i did nigh graduate degree when i was in 82nd airborne division. my father was a g.i. bill user as well. the g.i. bill is a very important part of the fabric of this country, and we've got to make sure we keep it robust and with great integrity. >> thank you very much. my time is up. and as i learned more, that will obviously be modified. and i would love to report back

to you as to what i saw and how that -- how i would modify the indicated actions going forward. one is fear, the other is reward. the other is not necessarily your compensation, but the fact you're doing a good job. i hope you will give us a game plan, make it public, and make the employees know that you're just not passing through and we're not just passing through, but we're going to insist on accountability. >> i couldn't agree with you more. for an organization to succeed, it has to learn. for an organization to learn, people have to be willing to

admit when things go wrong. the army called it as after-action review. we tried to do it at procter and 2k3w578 able. in a large organization, something goes wrong or right, you need to learn from it. in an insular culture, you're not getting bad news coming forward, you're not correcting mistakes and everybody becomes a one-off. it seems like there's a different report from every day from a different location somewhere in the -- in the country. we've got to create a learning organization. >> in your testimony, you mention creating a physician advisory board. do you contemplate those physicians being only v.a. physicians or do you contemplate being outside physicians having eyes on the system? >> my initial thought would be to get the very best medical talent in the world.

, and i've been very heartened by the number of people who have come forward to me and said they would like to participate and they would like to help. i think the greatest thing about this nomination at this moment in time is there's no question about the mission, about caring for vet advance. there's no question about that. there's an unusual coming together of everyone in this country to take care of those veterans. so i've gotten a lot of offers already to help. i'd like to have the very best medical minds that we can find inside the v.a. and outside. >> i think you have dover what i found in my travels over the past six months dealing with this issue. that is there are a lot of people who want to help, and there's a lot of help out there. there's an example, the shepard spinal center, one of the finest spinal centers in the world and recognized, tried for years to get the v.a. to cooperate, to let them take some of their patients and finally cracked into it last year.

now they're voluntary raising the money to do it, taking spinal cord injury v.a. patients and some ptsd and tpi patients who the v.a. had given them the and make the v.a. accessible, those people, and many of them are veterans themselves, the better the v.a. will be. >> the v.a. is a great institution, and has led innovation in so many areas, and does so many unique things that i don't think could be done as well by the private sector. nevertheless, any organization like the v.a. needs to benchmark itself consistently against activities elsewhere to become better. the procter & gamble company, we benchmark ourselves against the very best companies in the world in order to make ourselves better. i think we at the v.a. would need to do that too if i'm confirmed. >> thank you for your service

and thank you for your willingness to accept this job. >> thank you, senator isaacson. senator tester. >> thank you, mr. chairman, and thank you, bob for being willing to do this job. i don't know if you've thought about what you'll do on your first day. you mentioned testimony about the 90 days and take a set of immediate actions, but what's on the very top of the list? >> the very top on my list is getting the leadership and the entire organization together, and sharing with them what i plan to do, and how important to me the mission and the values of the organization are, and how unacceptable it is to behave in a way that's inconsistent with the mission and the values. that's what i'm going to try to do on day one. okay. so you talked about in your testimony the fact that betrayed

the trust of the veteran, and i know you talked about leading by example. is there anything you can do to restore trust by the veterans to the v.a. again? >> i've already made calls to the veteran service organization and have talked to other veterans. what i would like to do, as i travel, is to get together with the veterans service organizations and veterans around the country, and listen to their concerns. but i want to do that as a veteran. i want to do that as one of them. i don't want to do that as a secretary with an entourage. >> good. i want to talk a bit about perception. you said you've gotten health care from the v.a. in the past. is that correct? >> my family has. i have not personally. >> okay. so your family has this could still apply. has your perception of the v.a. changed over the last 30-some years? >> my father-in-law before he

passed away suffered tremendous treatment as a p.o.w., and he loved the v.a. he loved going to meet with his fellow p.o.w.s, and he very much benefited from that. my uncle, who suffered from agent orange, and still is under the care of the v.a. speaks very highly of the v.a. hi personal experiences have all been very positive. >> good. since you've become the nominee, you've gotten information. has anything changed with your perception of the v.a. in the last, what, month? three weeks? >> when you run a large organization, there are always things that go wrong. my -- the people i've met seem very dedicated to the mission and the core values. >> that's good. >> but what we've got to do is

figure out who wasn't. >> right. the big issue that most people are talking about now is access, because ones the folks get through the door, 90% of them think the health care is pretty darn good. >> yes. >> there's another issue, and that's mental health. the signature injuries coming out of iraq and now afghanistan all deal with -- i shouldn't say all de, but the majority is ptsd. we have a shortage of providers in the v.a., no ifs ands or buts about that, but there's also a big shortage in the private sector. how do you solve that problem? it's a problem if we get help earlier, you'll have a higher success rate. >> it's a great comment. we do have an issue on mental health not just in the v.a. but in the country. we've got to find ways to meet this need. it's -- it's one of the most pressing needs that we have

within the v.a. and one of the most pressing needs within the country. i think partnerships may be one way to look at it. i think certainly talking to -- and this is a longer-term solution, but talking to people interested in careers this is a great career. to make a difference in the life of a person through effective mental health is fantastic, but we do need more. we do need more. >> we have a conference committee dealing with outsourcing health care to the private sector. i think sloan gibson says it costs more to gift private than what the v.a. can provide. i think the hitch with the conference committee is where will we get the money? it's an emergency situation, i believe. it's a cost of war. that aside, what's your number

one priority to come out of that conference committee? >> again, i'm dealing with publicly available information, but having known sloan gibson for over 40 years, having gone to west point together and served together there, and then in the military, i trust what he has to say. i think he's talked about the resourcing needs that we have, and that's all about access. >> thank you, bob. i appreciate your time. >> thank you. >> thank you, senator testa. senator heller? again, thank you for being here. i don't think there's any secret that my priority on this committee is addressing the v.a. claims backlog, especially in light of the enact that nevada has the worst backlog in the country. unfortunate unfortunately the v.a. continues to provide a very rosy pictures

of how it's reduced the claims backlog. i want to assure you this depiction is false. last monday the i.g. released a report about how the v.a.'s two-year claims initiative led to inaccurate processing, in part to the v.a. employees feeling pressured to complete claims in a time frame. i want to go nationwide first and then a little locally. nationwide 32% of the claims had errors. some claims were denied without waiting for evidence to decide the claim. some claims were filed without a final decision, some claims without a final decision were counted as closed. so my question for you, mr. mcdonald, do you think it's responsible for the v.a. to continue to tout progress in light of this ig report? >> i think we have to improve the claims back-day-old lo--

backlog, which the working group put together. i'm thankful for that, but i'm also embarrassed for the organization you had to go to that work. we have to get ahead of this claims backlog and find a way to get it down and get it down quickly so that the veterans are getting the care they deserve. >> if i can get a commitment that you will review the entire process and whether management has tried to manipulate these numbers? >> absolutely. one of the things that i'm trained in is something called lean six sigma, total equality, a technique taught where you take a look at a work process, and you work to find out where the constraints are, you streamline that process. certainly giving the challenges with the claims process and the backlog, that would be one of my first jobs, is to take a look at that. >> to get down a little more

locally, there was an ig report recently of the v.a. regional office in reno. that inspection found that 51% of the claims reviewed were inaccurate and that management had contributed -- was contributing to inaccuracy and other problems. many months ago i was promised by your predecessor, or will-be predecessor there would by changes at this regional office. i personally have called for new leadership. if confirmed, can you commit to reviewing the management of each of the v.a. regional offices, including that in reno? >> certainly i will. one of the first tacks of a leader. i think i wrote this in my prepared submission is to get the right people on the bus and get them in the right seats. i don't care who the fortune 500 ceo you talk to is, they'll tell you it takes too long. it tal takes you too long to get

the right leadership team in place, but it's the first priority. >> i think you just answered my question, but i'll be clear. are you willing to make leadership change where they are necessary? >> i've done that throughout all of my careers, beginning in the u.s. army. >> okay. that completes my questions. >> thank you, senator heller. >> senator brown? >> thank you, mr. chairman. we've heard my colleagues, we've heard the media around the country very critical of the v.a., in many cases deserved. we've also seen some of the this criticism directed at v.a. employees generally, and i think it's important. i know you're going to be dealing with some very serious more re morale. that's included dramatic at some because of the decisions the v.a. made. i want to point out that 30% of the employees are veterans, and

close to 100% of the employees chose to serve veterans and how important it is that we recognize moth of those employees are doing a good job. i know you understand that. let me ask a couple questions that on a number of things. i had high regard for general shinseki, your predecessor. he was -- three things that he was working on that i wanted to ask if you planned to continue. he identified himself -- a self-imposed plan for ending the backlog, an issue that everybody in this committee and both parties have spoken out on. we've seen major improvements there. he worked hard in reducing veterans' homelessness, especially highlighting one of the v.a.s considered some of the best in the country, like

chilicoth, ohio. i wanted to know if you plan to continue his efforts? >> i do, senator brown. in fact, as i was reviewing the strategic >> i noticed the agency party goals are twitter of the three things you mentioned. and i know that one of the chronic target groups of homelessness is women. so absolutely will continue work on those three areas that you outlin outlined. >> the va conducts 6.5 million veterans and 85 million appointments and some are obviously conducted by third party and private providers. i hear from these groups about va delays and payments for these services. sometimes they go for as long as a year. i wanted to ask you to commit to work with this issue on behalf of veterans affecting those

health care delivery people and institutions outside of the va? >> yes. >> thank you. >> and last, one that's a little further afield than we talked about in my office in your first visit. that is, legislation that i've worked on called the significant event tracker where a number of soldiers in combat will get head injuries, minor head injuries, the marine or the ranger may say, i get my bell running. it's not recorded anywhere. a soldier gets four or five of these in the space of two or three years of do you tu and six years later his behavior begins to change. his kids notice that he has no documentation of it. they go to the va and make it hard to diagnose it because they don't have the records. it makes it more difficult for the va to when this veteran

files for disability, oftentimes it's difficult to put together what happened. therefore, increasing the backlog delaying it when the va doesn't have that information available. whether this legislation passes or not are significant event tracker bill, will you commit to work with the department of defense so that they keep better records on these so-called invisible minor injuries but injuries that have a long-term effect taken together. taken together have a long-term effect on that soldier? >> i think that's a really important idea, senator brown. secretary hagel and i discussed that and i think if anything, this really shows why we need a va. because the va and the dod working together can do this and they're going to be on the forefront and innovation of mental health as it deals with these significant events that

occur. so we've got to do that but we have to find a way to do that. it's going to be all new and innovative and something that's never been done before but it has to be done. >> but the burden rests way more with dod than the va but your urging the dod to do it just like trying to eliminate what you called a scene, what we said was almost a wall or between the soldier and the va and how that is so important to smooth that over. >> we'll own the outcome. you know, as they're a veteran and understanding that outcome and being able to trace that back to those significant events that occurred, crated the head injury is going to be critical. i think it's very important we work hard on that. >> thank you, senator brown. senator bozeman? >> thank you, mr. chairman. and again, thank you so much for being here mr. mcdonald. usually when i'm interviewed by

the press it's pretty extensive and at the end of the interview they say, is there anything i left out or any question i haven't asked. and i usually reply, no, i think that's every possible question and inc. you're about at that point right now and i want to say i'm very, very impressed with the answers you've given i don't think it's fair to get too specific with you in the sense that you're in the position that you're just getting your feet wet but in talking about process and talking about your approach to how you're going to solve problems i think that's excellent. i'd like to pension a couple of things that are important that, again, i don't want to get into the weeds with you at all but, just mention a couple of things that are on my mind. one of them is the fact that right now when a veteran goes to his medicare doctor and cease him and gets a prescription in order to get that prescription filled at the va, which is a

pretty good deal for the veteran, he has to go see a va doctor which makes no sense at all so i'd like for you to think about that in the future. scheduling is a huge problem. you mentioned getting some of the providers getting the best providers and visiting with them certainly, the schedulers and administrative people would be good to do along the same line. that really is the backbone of health care, really, whatever you're looking at. you know that better than i do. suicide prescription drugs, prescribing, not prescription drugs but the scheduled drugs. sometimes we put tremendous pressure on the va to get rid of their backlogs specifically, you know, these things wax and wane

but in treateding our veterans that have issues, there's been a lot of pressure to get that sofld, almost nate the backlog there. the easiest thing to do is prescribe the drug. you know, rather than really working through the problem. and then, again, just the prescription drug abuse that there's so much of this stuff out on the street that it's actually when i'm visiting with my sheriffs they talk about veterans diverting that and actually selling it. you know? as a way to supplement their income. one of the things that frustrates the committee and they are really a bipartisan entity when it comes to veterans congress works very, very well together whether it's in the senate or in the house, republicans and democrats. one of the most frustrating things we run across is trying to get information and then not

being able to get that information in a timely way to be stonewalled. and i think you'll find that the committee really does want to help you, you know, as we go forward. but i'd like for you to commit that when we do ask for things, you know, that that is is honored. you know. that this is a we have oversight, recognizing that fact and that you'll try i know you'll try to created a good relationship between the committees but i think that's probably one of the most important things and that's one of the most frustrating things. >> it's certainly my sbepgs, senator bozeman, to be responsive to whatever questions or demand that you may have. i realize the role you have on oversight and i also realize that you've got people in your state who have needs and it's going to be our responsibility, to try to help you meet those

needs. i will plan, if confirmed, to give every member of the committee my cell phone number and i'll expect you to use it and call me when you have a concern. and we'll try to deal with it together. >> thank you, mr. chair. >> thank you, senator bozeman. senator? >> thank you. >> i think you're probably the first person to give us all your cell phone numbers so i hope it's not a situation where be care. what you ask for. >> i mean it. >> thank you, we appreciate it. >> i'm glad senator brown brought up the question of the significant events that occurred to our soldiers that never gets into their records because i've heard of veterans who, as they're trying to make their claims with the va they're not able to get the information to backup those claims which leads

me to ask you -- when general gates and secretary shinseki were lead dod and va respectively they talked about seemless records so that the records follow the person, the individual, and here we are, though we still don't have the compatible systems. is this a -- something that you would pursue so that when our people leave after service and become veterans and their records are not where them? that follows them? apparently this requires some kind of a huge computer change that we've not been able to achieve. even if a lot of money has already been spent. would you pursue this course? >> yes, senator. as i said with i really think it's important that the dod and the va operate seamlessly. it's not the veterans' fault

that there's a boundary between those two organizations. and we need to operate seamlessly and what i met with secretary hagel he had the exact same interest that i do in fact, he asked for the meeting which i thought was an incredibly gracious thing for him to do since i'm only a nominee. and i think that recognizes how well we can work together to get these things done. i know progress has been made on the record interopenability between the two organizations but more progress needs to be made. >> apparently there's some -- tremendous difficulties in getting this done because six years later, lots of money still not happening so we're going to follow up with you. i certainly intend to see how you're getting along with that. you mentioned in your testimony that the va operates as loosely

connected individual administrations so various decisions are being made that at the local state level, perhaps, and there's not particularly compatibility or procedures that are being utilized that would enable you to decide or compare what's going on with the va in one state versus another state. so in a situation like that. how would you address the fact that across a va system, systemic problems will be difficult to address when there are multiple organizational management structures in place? >> i think you're right and i think you're question is insi t insightful. any large organization needs to operate with one team and one dream. you can't have separate organizations going in different directions. and a lot of thought is put to

how do you break down boundaries and organizations? my experience over the last 40 years has been that if there's a problem in the organization it typically curse at a boundary and how do you mack those boundaries personal permeable so that resources and information can flow between those boundaries? one of the ways we have to do that is by putting in place systems that will work so that we get predictably good results every time something happens, scheduling system is an example. but the other thing that does is it allows you to flow resources across the boundary so that each individual entity isn't asking for more resources when, in fact, the resources may exist somewhere else and we need to flow them there. a good example of that is the migration that's currently occurring, of veterans. veterans who are returning to this country are migrating to different places than you may have expected so we're going to

have to be flexible enough to make sure our care followses that ni grags. >> i think when you're dealing with a huge system like the you're going to get a lot of pushback from people that are used to being left alone in their regions or whatever they grouping is, so i wish you the best in making sure that we really are working with the response in the way that it should. >> thank you, senator. senator moran? >> mr. mcdonald thank you for your presence and thank you for your willingness to serve as the secretary of veterans afargs as i indicated in our conversation and i hope you'll consider me and other members of this committee, allies as you try to develop a strategy and implement that strategy that benefits those who served our country. i want to talk in a broadly for a moment and bring kansas into the topic of conversation. first of all, in the hearing

that was held in may we had all or most of the veteran service organizations testifying. and i think without a lot of acception those are organizations that have consistently resources from congress to support the activities that the department of veterans affairs. but my summary of their testimony was that each and every organization seven vso's all testified that in the past while there is additional money going to the department of veterans affairs, in fact, the president indicated earlier this year that during his time in office, the department of veterans afargs has been more resourced was his words. more resourced than any other agency or department in his administration. so the point that the vso's made is yes, we could probably use additional resources at the department of veterans afargs but without exception it seemed to me their testimony was the

money is in the wrong place. it doesn't result in better care. it doesn't result in more providers. in fact, it results in more paperwork, bureaucracy that our veteransen count her dealing with the va. so as we have conversations about more money when you make a budget request from the dependent of veterans affairs we need to make certain this is not about expanding the number of people. i'm told within vha's headquarters in the 1990's there were 800 people who worked there. that number is now 11,000. the focus has to be on the people who provide patient care not the folks who get in the way of that patient care. and i indicated to you in our conversation about what i'm looking for is somebody who can rebuild the trust that i have -- want to have in the department of veterans affairs and more importantly what our veterans deserve to have in the department created for their benefit. and i look forward to working with you to accomplish that.

>> let me turn specifically to kansas. and i want to highlight for you how rural our state is. i served in the house of the representatives representing a congressional district of our state that's larger than the state of illinois. no va hospital in that congressional district. we need to continue to work to provide services to folks who don't happen to live in place close to where there's a va hospital. over the course of my time in congress, working with the department of veterans afargs, nine secretaries, hot outpatient clinics. that has helped. if you live four or five hours from the va hospital by the time you get there particularly if you're a 92-year-old world war ii veteran but if you're a 92 world war ii veteran and you live two and a half hours from the out patient clinic it doesn't make that much difference you're two hours closer if you can't get there anyway. so one of the things i'm pleased

about in the legislation that's now pending that i hope that the conference committee reaches a result and we come back and vote on the senate and house floors about the legislation is the idea that if you live long distances from a va facility the va will provide that care for you. the va today has the ability to do that. they have the ability to pay for outside services. they are seemingly reluctant and often, unwilling to do so. you need to understand that when the va fails to provide the fee for services to those veterans, most lookly what happens is that veteran gets no service at all. in fact, in my hometown of plainville, my hometown is plain vil but 23 miles away is -- where we were successful in opening a outpatient clinic. the va reported they expect 1100 veterans from northwest kansas to access care because that's 1100 who were somehow making their way to wichita. this would be closer. the end result was we had 2200, double the amount that was said.

those other 1100, the doubling amount occurred because prior the that the veterans were receiving no care so i look forward to my opportunity and the time that you're secretary and i remember the united states senate and a member of this kwom to help explain the challenges that we face in a rural state like ours. one of my ongoing complaints with the department of veterans affairs that i would love for you to solve is we have an outpatient clinic in liberal, kansas, that's not had a physician in its employ for more than three years. and while i've raised this issue with the department of veterans' affairs, over that period of time the problem i have is that while i understand it's difficult to recruit and retain positions in rural america, there's been no plan to fix the problem. we are need a plan and we want to help implement it and i want to be an advocate for all veterans but bring home to you the unique nature of places like my home state. thank you, mr. secretary.

>> thank you. >> as you said, i think it's all about if mission which is to care for the veterans and we have to look at these decisions through that lens and try to get access for the people in rural america. >> thank you. senator rockefeller? >> you've done a terrific job here today. do you have -- you have a variety of tests that have not surfaced to this point within the workings of the congress and the united states government. it always has been and i assume still is, that when you give testimony, and you're giving a different kind, when you answer questions it's a little bit different but when you give testimony or your people at a higher level give testimony to this committee or to any other committee in congress it has to be approved. it has to be approved before it can be given by the office of management and budget and that's a restraint because the white house is saying to you, you go

ahead and say what you want but it has to be within our program parameters. i don't have any fear in your case because the veterans administration, the deficiencies and the need for money and all the rest of it is so apparent that i think that your road will be easier. that's a restraint. it's unknown restraint to most of the american people but it's a restraint. secondly, you'll find that we, in the congress, are terrifically skillful at finding problems, things which we think have gone wrong in your agency. and then we just want those problems fixed. there you are sitting and/or the press is always available and people use the press very liberally, often, to make criticisms which they, themselves, are not willing to

step up to the plate to solve. you've talked a lot here about accountability. i think it's part of your responsibility and i'm not sure exactly what i mean when i say this because i'm not sure how you do it, but you can find ways that people here are saying, well, let's not throw a lot more money at that problem. there's plenty of resources in the va, shift people around. you help that when you talked about taking some of your i.t. people and put them over into other positions. but the fact of the matter is, the problems of the enormous boundary and growth yet to be seen, of people who are seeking help from the va with a whole series of new problems to the va system. part of accountability is you being frank with us when we're not giving you what you need to do the job.

you can't allow us to sit here and say -- there's plenty of money available it's a question of shifting resources around. when you know perfectly well if you're going to go out and hire the right nurses and doctors and do experimental work which has profound p fooechlt sd solution potential, all of that cost money. all of that cost money. this congress is sort of divided the people who want to spend money and think that you need to spend money when you have a particular problem and there can be no problem from the veteran and those who would say there's no problem or dramatic and problem the better but they don't want to spend money to do anything about it. it's either fear or leadersh dia or whatever. or does that hit you in the face? you get in and start making changes and all of the sudden your budget, as i said, as the president said, the va has done

better than any other institution in getting money. that's still not saying very much. we've shut the government down here. we've got sequestration. we don't spend. if you spend you'll be labeled a big spender and then you'll lose your next election and the tea party and all the rest of it. so i'm just saying, as a friend to you, when people here say they're going to be your ally, make sure they'll really are. and make sure that they're doing for you what they should be doing for you. that's the accountability that we owe ourself and which i hope you'll exercise on us. this is not an easy system. and we're not an easy group to deal with. and it's easy to talk and complain, hard to solve problems. i think you're a problem-solver. i welcome that and i think you'll be a superb secretary but be very frank and tough with us, too. >> thank you very much, senator work fe

rockefeller. i plan on it being a two-way partnership. when i guf you my yell phone number i want injuries at the same time. >> senator blumenthal. >> you can have my cell phone number for what it's worth. not as much as senator rockefellers but thanks for being here and answering all our questions as well as you have and forthrightly and candidly. in my initial statement i raised the specter of the va as comparable to a bankrupt corporation, unlike a lot of bankrupt corporations or at least, corporations that fold the va has a lot of assets and one distinct asset is it's very dedicated people. its trained professionals who do such great work day in and day out regardless of the headlines

in the paper and the disparagement they may see in the congress. and wi see it in connecticut. we have a lot of great docs and medical care in connecticut. most especially, at the west haven va facility, which is our main hospital. and my question is -- what can we do to attract more of those trained professionals to the va facility in connecticut and others around the country, which really provide the day-to-day care for our nation's heroes? >> i think that's a great question, senator blumenthal. i've been thinking a lot about this knowing the shortage that we have. and also, the organization which may not be very high right now. and it dauns on wns on me that care professionals want to make a difference in the lives of others and they want to be on the cutting edge of making a difference. so if we're going to start, for

example, correlates post traumatic stress syndrome with events that occurred during the military experience, that's cutting-edge stuff. that's new stuff. that's stuff that nobody's done before. i mean, the va has had three nobel prize winners. that's the kind of thing that i would think health care professionals want to be a part of. so it would be my intention we really tout that innovate five capability that the va has had for years but bring it out and use that to recruit the very best people who want to make a big difference in other's lives. >> in the west haven facility as i believe i told you when we met, i asked for site specific information relate to the audit that was done. in fact, a letter from our delegation asking general shinseki for that site-specific audit data relating to all the

locations in connecticut. and i'm referring to the audit that was done during the spring not the wait-time data. i'd like a kit i commitment to you that i'll commitment to you that i'll receive i response to that letter. >> we'll respond to the letter, senator blumenthal. >> i'd like your commitment also that you'll respond to a letter i recently more recently wrote to the deputy or acting secretary of the va, asking for an explanation for the apparent tripling in wait times. in connecticut and in fact, elsewhere in the country, the increase in wait times and the wait times delayed longer than 30 days that seem to have tripled in connecticut and quadrupled elsewhere. will you commit to me you'll provide a response to that letter? >> if confirmed, i'll provide a response and knowing sloan gibson the way i do, you'll get a response. >> and i'm hoping that response

will be imminent, not sometime in the indefinite future. >> that's my hope as well. >> thank you. the other area that's of grave concern to me relating specifically to connecticut, is care for women veterans. i hope that will be a rye ority for you and you can commit that women's care for veterans at the va facility in new haven, will it is the result of trauma connected to sexual assault or battlefield pts will be a priority for you? >> it is a priority and it's a growing priority. the number of women going into the combat and coming out of combat and becoming veterans is growing. this is something we got to get ahead of. >> again, in connecticut, a great many of our veterans have been victims of predatory schemes or practices on the part of for-profit colleges or

others, relating to educational benefits. ultimately, the victims are not just the veterans but also, taxpayers because it's taxpayer money that often is lost. will you commit to make correction of those kinds of abuses a priority? >> i've read some of the newspaper articles and reports on that and dealing with the publicly-available information since i'm not confirm and we'll get into that and understand it. it's unconhave you beenable that someone is taking advantage of our veterans. >> in response to the criminal investigation that i asked the department of justice to begin i'd like your commitment that you'll assist in that investigation to hold accountable anybody in the va who committed flawed or destroyed documents or illegally manipulated documents so as to lie to jaen shinseki and to the american public. >> yes, sir, as i said, the

number one value, core value of the organization is integrity. so we've got to root out when that isn't upheld. >> thank you very much. >> senator begich? >> thank you very much, mr. chairman. mr. mcdonald thank you very much for being here. i would be remiss if i did not first brag about my state and invite you to it. as the senator from alaska, we have attempted to look at this problem in a very complex -- it's complex in a lot of ways. not only health care delivery system disability claims, gi benefits, basic care services. this laundry list of services. as i said earlier in my comments in opening was to reshape what we were doing in the va where now we have alaska, 26 agreements with tribes that deliver health care all over alaska. we offered legislation but we worked with the administration

to figure this out and former secretary was bold about it and kind of went on the cutting edge. i'll use your words, that cutting-edge element and i think we're starting to do some incredible things that are delivering services wherever veterans are and the va reimburses the indian health services folks in regards to delivery of the service. along with that we're starting to utilize our federally-qualified clinics. federal resource. in both of these, for example, when we're partnering in anchorage, the delivery system if you're a veteran on the list already you get same-daycare. unless it's may mar medical. that's should be the goal, right? when you walk in as a veteran you should get care. we're getting 70 to 80 folks a week signing up in anchorage on those two elements but throughout the state many are signing up in the hundreds to be partners and work or veterans being able to access those partner agencies. and we also have an incredible delivery system.

what imi mean by that is the care, nuca, a holistic view of medicine. you come in with one ailment and that's all we take care of we look at the whole system. you get a team that work wgs you from mental health, eye, hearing, primary, so forth, so the outcome of the health care is better than just a process that they're going through so i would hope that you would be willing to consider looking at that. i know the va has been looking at this as a model in some areas because of its uniqueness and how it's getting outcomes, for example, our native health clinic we dropped emergency care folks coming through by almost 60% by changing this one simple thing. it wasn't that simple. it is now. would you commit to at some point and you had mentioned you're going around, again, we don't have a hospital but we have a clinic and a unique delivery system, to come to alaska and see what we're doing and learn from what we're trying to do? >> certainly i'd like to go to alaska again. i've been there many times and have always enjoyed it.

i think what you described is as trying to prevent the illness or trying to prevent the problem rather than ta treating it once it curs it occurs. the work we've done at procter & gamble with our health care business has always been about preventing the illness from occurring. >> very good. >> in order to keep people healthy longer. >> holistic delivery system? >> holistic, absolutely. >> that's what i'm interested in, great, we'll take you up on that. second, i want to echo what senator blumenthal mentioned about the growing population of women and it's creating a growing challenge because some of our clinics and hospitals and facilities were not designed for the needs of women and i want to hear you say to make sure to hear that the women who are veterans will get equal

treatment as you're looking at, reviewing and improving the system? >> yes, sir. >> your issue on the dod, i want -- this is -- you may nottans to answer this. maybe you do because you're not sworn in yet so it might be good that you're not cabinet secretary yet. here's what's going to happen. you're going to have all these wonderful ideas which we're anxious for. you then present these ideas to my friends at office of management and budget who then tell you don't have enough money. that's not what we're doing and you're going to have to reform what you brought forward. are you willing to kind of buck the system and say -- here's what we need we're serious about dealing with our veterans and funding our veterans, which may mean you have to say something to them that, no diggs respect to my friends at o&b, and they are my friends, shean donovan, the great sanitizer. they were always hammering down. but are you willing to push and be the advocate for the veterans

when the system says can't do it because you don't have enough money? >> well, you know, my intention is to meet with members of the office of budget and management roughly one weeks or so, so they're no surprises. i think a partnership with them is critically important just as a partnership with that kind of a organization, the private sector would be as well. >> excellent. last question and i have others but i'll submit them for the record. are you also in dod tells you and we've seen this play before with dod and i've seen it on the appropriation's committee. dod, va, social security and figure out this disability. when they say, it's not our problem, at some point and glad that hagel has called you, that's a good step, again, will you stand tall and say -- look, we're going to have these

integrated systems that are clean and the veteran doesn't have to worry about. we as agencies and government and congress should worry about but they should never worry about their record going from a to b. will you be able to -- dod, the pentagon is big. i'm seeing what they've done before. i'm anxious for your -- >> secretary hagel and i are small. there's only two of us and i think that we can work together on these kinds of things. >> excellent. >> and i do plan to let him know what our needs are and i hope in return, he'll let me know what his needs are. as i said earlier the fact that reached out to me is a great sign. he's a great leader so it didn't surprise me. >> i was happy to him when he was nominated. mr. chairman, thank you very much. i'll submit more questions for the record but i appreciate your willingness to be here today. >> okay. we're coming to a close. let me thank you, mr. mcdonal s

for being here and you're willness to testify here today and what we're going to tried to do and i hope and believe we can, is to have a vote on your on confirmation tomorrow and i believe based on what i heard, you're going to be confirmed and i hope that's the case. the other thing that i would say and senator moran raised that issue earlier is that there is a conference committee report out there. my only disagreement with what he said is there's also a house of representatives, not just the senate and both bodies have to work together and i hope very much that we'll be able to do that and i hope we'll be able to do that before we leave here. with the recess and i hope we'll be able to provide you with the emergency help that you need to deal with the immediate crisis waiting the veterans and i hope also, that we'll give you the resources you need to get the doctors and nurses at other personnel you need to so that we don't have this crisis in years to come. let me conclude by saying, you have heard and i know you've

aware, of the very significant problems face ing the va. and in addition to everything else, we have 2 million veterans that have come into the system in recent years. you're going to be dealing with the crisis of 500,000 men and women dealing with ptsd and tbi. you're going to be dealing with a shortage of personnel. dealing with accountability issues and the need to develop a new culture at the va. that's quite a task in front of you. on the other hand, what i would tell you is what you have going for you, is that the american people feel very, very strongly about the need to provide for and take care of those who have sacrificed so much. and i think they'll support you as you come forward with ideas to do just that. so i thank you very much for being here. >> thank you very much, chairman sanders. >> and this hearing is adjourned.

>> chairman sanders said he hopes for a confirmation vote before august before the recess. on facebook we asked, do you think robert mcdonald can fix the problems at the veterans affairs department. dan gel says you can't fix things with more money. you can't fire incompetent or dishonest employees. change the civil service laws and put up large rewards for

whistle-blowers. and kayla writes, you can fix it if he puts our veterans at the top of the priority list and teaches others who work for the veterans hospitals and clinics that the veterans are more important than their paychecks. continues to share your thoughts at facebook.com/c-span. tomorrow morning's washington journal, connecticut congressman jim himes looks at intelligence gathering at recent foreign conflicts and then they discuss the future of the veterans affairs department after the senate confirmation hearing we just saw for robert mcdonald. and then popular mechanic's contributor bucky mcmahon talks about his article "looking at technology" the end of destroying serious chemical weapons. "washington journal" live every morning at 7:00 a.m. on c-span.

. i thought it would be compelling to tell the story of a white family and a black family with the same name who come from the same place and follow them from slavery, during the civil war, reconstruction, jim crow, the civil rights movement up until today and compare and contrast. >> columnist and author on his family's slave-owning history in texas and how the legacy of slavery still affects american society. he talks with lava rooimpb achl about his family's lineage. today, there were two conflicting federal appeals court rulings related to financing of a health care law. up next, a discussion on the access quality and cost of health care provider networks. since the implementation of the affordable care act. this is 90 minutes.

>> today, i'm going to talk about -- i've been using the term limited networks. they put the issue on the radar screen of a lot more policymakers. i want to start being an economist saying that limit networks do have the potential to substantially lower costs.

they use broader measures of cost than unit prices and one of the ironic things is that some of the measurements of providers to assess who to invite into a limited network, are very parallel to some of the payments reforms that you have u heard about like episode bundling, patient-centered medical homes and the like so quietly they're moves in the same direction. where did the savings come from? from steering volume to lower cost providers. and that's a direct thing. in addition, if you're successfully steering patients or have a good prospect of it, you can negotiate lower unit prices with some of the providers in a market. when enough plans do this in a market and enough people are involved, this will strengthen provider incentives to lower costs.

this approach through our work at the center for studying health system change since the mid 'niengts, we saw provider let plans develop in the mid 9 1990's and the whole purpose was the expectation that they could offer plans with networks limited to the systems providers. and these were abandoned for the most part, when limited networks disappeared back then. i want to briefly mention the highlights of the mckenzie work about the experience and public exchanges. and they estimated that the

network plans were available to 92% of consumers using the exchanges. and that broad network plans are available to 90%. they plan 48% of the offerings and 60% in metropolitan areas. and the key thing was that broad network offerings had premium increases, 13 to 17% greater than the narrow network offerings. so what's behind the rapid growth in limited networks? i think a big basic reason is that health spending now, is increasingly higher in relation to income. and we all know about that's from advance technology and higher unit prices. and it's led to a situation where broad provider choose is a luxury that fewer people can

afford. but the key break with the past really was the developments of public and private health insurance exchanges. i would say there are two key things. one is -- the freedom from one-size-fits-all requirements, you know, if you're an employer and you're offering your employees a plan, this strong pressure to make it a plan that almost everybody is going to find attractive. that's not ten environment to offer a limited network plan. but with exchanges, you're freed from that because there's a lot of competitors in most exchanges and a plan can be very successful on the exchange if it appeals to just half or even less of the population. this would be a disaster in employer-based coverage unless that employer was offering wide variety. the other aspect is the fact that the subsidies to consumers are fixed.

they're based on the second lowest silver plan premium in a marketplace in the affordable care act or in vat exchanges. they're also fixed. so it means that consumers are spending they're own money for the marginal cost of a more expensive plan. i'm often surprised that we don't see more products on exchanges like what the federal employees health benefits plan uses. it's a tool from consumer checkbook where people click on a plan. they put the names of their providers in and they see which plans those providers are in the

network of. there's a need to monitor the network provider capacity there's the possibility that a lot of plans have the same providers in the network and those providers are over well ched. this will straighten out over time, i'm sure. also, there needs to be recognition that some of the subspecialties and the attention to physician's hospital admitting privileges. in specialties like ophthalmology and or theth ptho and they're pretty specialized or someone with a problem with their retina or their foot doesn't want to go to any old ophthalmologist or orthopedist. there needs to be a speedy exceptions mechanism to allow a patient with highly-specialized needs to meet them at network pricing. and also, something that, perhaps, a responsibility of exchange is ensuring that broad network plans are also

available. just a few comments on regulation of network adequacy. there's clearly a need for regulation. but there's a very high cost if the regulation goes too far. i think the key needs are the basic of the transparency needs and the basic tasks i mentioned and also, a need to prevent risk selection strategies, based on core coverage of some specialties. and a consumer protection needs which i would describe as basically, if there's some networks that very few informed consumers would find acceptable, it's probably best that they shouldn't be on the market. i think some of the dangers is disarming the most powerful market tool that's available to address the effects of increasing provider leverage in negotiating with insurers in a prices have been going up rapidly and they're most explained mostly to the rise in

spending. and so, the success with limited network plans is going to be important for health spending, especially for lower income consumers. and also, i'm concerned about interfering with some of the steps toward clinical integration. it's inevitable that pressures from providers will happen. we've seen it now particularly in pediatric hospitals. particularly outspoken and we've had any willing provider laws and a number of states that actually have been around since the 1980's. which seems to be a particularly misguided response to this issue. but in contrast with 1990's, consumers see much more of a stake of having lower cost products available as a choice. federal government also is a stake in high how the silver planned premiums are and i'm suspecting we'll have a much

more nuance reaction to these issues. thank you. >> there we go. well, good afternoon, everyone. it's a pleasure to be with you today. i plan to briefly cover five topics in my presentation. i'll start with some of the latest consumer satisfaction polling, and then i'll turn to how networks are focused on delivering value to consumers. and then a little bit about the importance of increased choice and how those choices enhance the value proposition. and then a little bit how networks are built based on a recent studty that we commissioned by milliman. timely, i'll wrap it up with our commitment to consumers which really focuses on accessability.

the commonwealth fund recently examined attitudes about satisfaction of coverage in exchanges and found that nearly three out of four are satisfied. this is consistent with the recent morning consult poll, showed that 74% are satisfied with their health plan. directionally, this matches with what we have seen in private polling showing that more than nine out of ten registered voters are satisfied with their private health insurance coverage. consumers' preferences for balancing provider access with cost is another very important consideration. a recent poll indicated that 50% -- 57% of small employers would choose a smaller provider network if it resulted in a 5% reduction in their premium.

and this increased to 82% if the result were a 20% reduction in premium. and another morning consult poll of consumers showed a similar preference with 58% preferring a less expensive plan with a limited network of doctors and hospitals. health plans are focused on value. by finding the right balance for consumers between quality, affordability, and choice. plans are constructed on the premise of ensuring the highest quality at the lowest price to deliver that value to consumers. the milliman report i mentioned finds that high-value provider network allow for more affordable coverage options with 5% to 20% lower premiums compared to broader network plans, while placing an emphasis

on quality and effectiveness of providers. the mackenzie report found similar results. many consumers are looking for this type of balance that delivers value, affordability, and choice. regarding choice, the recent mackenzie report that paul summarized in his presentation shows that consumers now have expanded choice of network offerings on the exchanges. broad networks are available to close to 90% of the population. networks are available to 92%. this increased pref laens of marrow networks gives consumers a wider range of value proposition and prices among health plans. importantly, ma kckenzie found there is no meaningful performance difference between broad networks based on cms hospital metrics.

the milliman report explains in some detail that high-value provider networks are specifically geared toward providing personal and comprehensive care to patients in and environment where providers effectively communicate and coordinate with each other regarding the best treatment for patients. high-value networks are developed through a dleliberatie evolution process with providers that consider more than just fee levels. active cooperation and collaboration between health plans and participating providers is really the hallmark of success for high-value networks. performance on quality measures is the key part of the criteria used for provider selection and inclusion in a plan's network. in addition, health plans must meet robust standards for network adequacy and access to care. professional accrediting organizations like ncua require plans to meet standards for

access and availability of service and measure themselves against these standards on an annual basis. state and federal network adequacy laws ensure that consumers have access to a sufficient number and type of physicians and hospitals and health plan provider networks. importantly, network development is occurring in a reform market, where health plans have new requirements that restrict their ability to very plan design and roll costs including essential health benefits, preventative coverage requirements, limits on cautionary and restrictions on e-trading. variation in network design is one of the few tools for health plans to keep costs low for consumers while ensuring quality.

i think i'm missing a slide. there we go. we'll try to go backwards. there we tgo. >> bingo. >> sorry for the delay. so here's our commitment to consumers. this is an important slide. so i'll spend a little time on this. our health care system is in a period of significant change which means now more than ever patients are looking for value and stability in their coverage. understanding this, health plans' top priority is to provide consumers with the information they need to navigate the new system and to make the decisions that are right for them. one important step health plans are taking is to improve

transparency. i know paul talked a lot about this. while the use of provider networks has been a key tool in delivering value by preserving benefits, mitigating the impact of rising cost, and promoting quality of care, consumers may not be aware of the critical role networks play, how they work, or understand which providers are in their networks. consumers should have the information they need to make the right choices for themselves and their families. and that is why health plans support ensuring greater transparency of network design by providing accessible, understandable, and up to date information about which providers are in a network, and timely notice to consumers when providers leave the network. providing a summary of information about how plans put together their tailored networks, the balanced cost, quality, and access considerations. providing information on how consumers can appeal plan

decisions, submit complaints, or obtain referrals to out of network care when necessary. we also support continuity of care for a minimum 30 days for individuals undergoing an active course of treatment for conditions that require a more complex care, serious terminal illnesses, and for mental health. so that wraps up my presentation. thank you, and i look forward to our discussion. >> all right. thanks very much, dan. and we'll turn now to catherine r. buckle. >> i thank everyone in the room. >> you better get close. >> i better get some volume here. >> press it then wait a couple of seconds. that will do it. nope. they're temperamental. >> okay. very good. thank you, all, everyone in the

room, for allowing me on behalf of ascension health to have the opportunity to have this important discussion with you today. background, ascension health is the largest catholic health system and not for profit health system. we have more than 1,900 sites of care in 23 states in the ticket of columbia. and all the health systems that are sponsored by ascension health have considered participating in insurance prompts offer projects offered on the exchanges. however, these participation exchanges are made at the local community level and as a result we have experienced pretty much on all sides of the issue. in some communities, we're the name providers in the narrow networks. and named in all of the narrow networks offered. in other markets, we are included in some narrow networks but excluded from others. in some markets, we offer our own offering as a narrow network

plan of our own. and then finally, we participate in the non far ynarrow market, offerings described by other providers in those markets. i would generalize that overall in most of our markets, we're in some form of exchange product because generally, it fits with our mission to serve the low income and the vulnerable since that's who's accessing these products on the exchange. so i do want to meant about these narrow networks and then how they can benefit payers, patients, and providers. we do believe there is benefit in narrow networks. and it can be done through the offering of what we call clinically integrated care. and that's especially helpful for those with chronic diseases. and so some of these benefits that you can outline when you have this tighter