captioning performed by vitac >> -- of their lower cost labor. we actually had the rice bagged on the docks within cuba for distribution from there. one of the benefits we see, mr. chairman is that when cuba buys rice from vietnam they have to buy an extremely large vessels, 25 30 35, 40,000 ton vessels. because of the proximity to the u.s., we can load small vessels go to the port of havana and go to other ports like santiago de cuba and other ports within cuba that helps them on their storage, the ware housing and distribution within country. >> we had a lot of interaction

with the cuban people. one thing they need is our technology. they have fallen behind us. they need access to more of our products such as farm equipment. we have some limitations as what we can ship to cuba. one thing we found, for example we took gifts of fencing tools and a set of wrenches down to them. if some of the professionals that were on our trade delegation weren't sure if that was a very good gift to take when we took it to the farmers, they had had tears in their eyes that they went and the subsequent trade mission, they showed us all the fences that were built with our tools that we took down because we understood what their needs are. so as we get some efficiencies in our shipping, and bring our farmer to farmer interaction, we will improve their productivity which will increase the demand for our u.s. goods. >> do you have anything to add? >> i'll echo on to that. i think sometimes our biggest restriction on trade with cuba may be us and not them. and you have the power to work

on that and you are and that's very good. i think as far as what i saw in cuba, their entrepreneurialship which several of you touched upon, was outstanding. as a business owner myself, you know, that was something that really stood out to me. i think they're going to try to make anything we can do work. >> senator stabenow. >> thank you very much mr. chairman. i think this has been a really important discussion and first mr. beale i want to underscore, when you're talking about cooperatives, they're very positive they have created cooperatives and the ability for more decisions to get made by farmers, although there is more to do as you say to get the government out of that position so that the farmers are the ones really driving the train here. it was interesting to me, as we're talking, mr. kaeler,

you're talking about what they're interested in in terms of equipment and tools and so on. we talked a lot about farm equipment and tractors. and the fact that the new decision that the president made was to allow farm equipment and the fact that they had cooperatives, most of them didn't have one tractor. and they were making decisions as to who got a tractor. and how many tractors. and so there is a lot of opportunities for us to be able to expand but i think cooperatives are very much a part of the structure going forward. so i'm glad to hear your testimony. i'm wondering, because you've been to cuba so many times and have had had the opportunity to really navigate both from agriculture, looking also at cuba's economy from a broader trading relationship, beyond exports, in terms of commodities, when you think about how to more fully develop

the farm economy in cuba, and what we can do i mean, what would you suggest? and i'm wondering what products or services or assistance that we're leaving out of the conversation so far? what should we be focused on that we haven't been talking about? >> well, when we went down for example, the first trip when we were there in 2002 via nutrient compendium from 1989, so working with some of the magazines and the universities taking updated technical information to help with the livestock we exported and feeding them was our first step. things have changed from their time of closeness with the soviet union. their professionals are all willing to get u.s. technology and get access through the internet. we took in when we took distiller grains down and showing them how to feed it, they're a gracess-based economy. we got reports from the cuban

people of one farmer had a report he had lost two-thirds of his livestock and the quote in the paper was he went not bag and reached in and got a scoop of what we trademark norgold in the distiller grain. he said without this product from the u.s., i would have lost all my cattle. so we were providing technology that way, getting farm equipment, as you mentioned, the access to modern mixing equipment, modern milking equipment. only going to help our u.s. products as we improve production and improve efficiency for their farmers and it will feed their people. there is a lot of poverty in cuba. we didn't see a lot of hunger. but they're all looking to increase their supply of food for their families. >> absolutely. and i'm wondering mr. rossen, we talked about the fact there were a small group of products

that we're exporting now. we want to do more. we want to do more rice. we want to do more of everything and that we need more diversity in terms of our goods that we're exporting to cuba. how do you see the president's new rules governing trade financing, between the u.s. and cuba as creating more opportunities for the underrepresented cuban market and what mark could we be doing? i know ultimately it is lifting the embargo and we hope they're going to be able to get that done. but what more can we be doing right now? >> i think the encouraging thing and the new regulations is the allowance for remittances to quadruple. if they can go further, that would be even better because remittances end up, 80% of it in the hands of the consumers or small businesses. and those remittances represent about -- they go into about 60% of the households in cuba.

they can be quite important in terms of stimulating consumption, and part of that consumption would of course be food products and we would hope from this country, and they can also be used for business development. for example, in cooperatives or private business ventures, and the cuban people are very entrepreneurial. you've been there, you've seen the entrepreneurial spirit and capacity that exists but it has been harnessed. i think remittances play a critically important role and if those could be expanded, i think it would be a very positive impact on the people there. >> thank you. thank you, mr. chairman. i appreciate your holding the hearing. >> thank you. >> thank you, mr. chairman. mr. harris there has been some concern expressed by, you know, some members of congress in the sense as to what would happen who would be obligated if the -- if the cuban buying organization

failed to pay or whatever. some have concerns that perhaps the united states government would be on the hook. i guess the question is, for you and the others can chime in also, if the cuban buying organization fails to pay for shipment of rice or whatever, would you expect the u.s. government to compensate in your case for the shipment? >> senator, in my opinion no. we would welcome gsm financing it would be a wonderful opportunity for the ag industry. but we -- that is my job with the company as risk management and we assess that every day. so we assume as we take that risk that that risk is for riceland foods. >> anybody else or -- >> i would expect if the rules change, it would be the same requirements as it is for any other company. or any other country and any

other business transaction as a business owner you know it is a transaction between buyer and seller. and, you know that's risk we take and we have to analyze our business as we do it and as producers we're asking for less government interaction, not more. >> no, no. and i agree totally. again, i think there has been a misconception and really wanted to clarify that. you know we talked a lot about today, your testimony was excellent, very helpful. as was the other panel. i guess the bottom line is has the recent administrateive changes regarding trade -- are they going to help your business with what's going on right now? mr. harris? >> i can respond on behalf of riceland foods, no. it is a very small step. i can tell you the day after the president's announcement, i contacted alan port and told

them certainly we had an interest in doing business there and they thanked me very much for the call. but had had no interest in purchasing u.s. rice. so, senator, i really think that they are looking for an elimination of the embargoes so they can have the ability to create foreign exchange by selling their rum and cigars and citrus to the u.s. and the tourism that they need so badly. i really think that the small incremental moves that we're making are not swaying them to try to be -- to work closer with us. >> would you all agree that those are the -- that is the major barrier? what is the major barrier? >> i agree that i think that the answer would be the repeal of the embargo as a wheat farmer from kansas you know i'm looking at june to be harvesting my wheat crop. so, you know, i would be looking at -- it would be the port in july. so if the embargo was lifted, we could be selling wheat to cuba

in july or sooner. and this is what is holding it up. >> dr. rossen. >> my perception is, and i visited with the people here at the cuban intersection both this group as well as the previous group, and there was a lot of optimism early on that we were going to change the rules possibly lift the embargo, and, of course, that hasn't happened. and i think in about 2011, 2012, they came to the realization that the carrots they had been offering in terms of purchasing products from 38 different u.s. states hadn't worked. and that's when they began to diversify away from the united states to other countries. and so i think they're waiting for -- in our perception this is a very strong signal, in their minds it may not be strong enough. and i believe they're still waiting to see what we're going to do.

>> very good. mr. kaehler. very good. thank you, all again for being here. i do appreciate your testimony and it really is very, very helpful. you all are on the ground floor of this, and nobody understands it better than you all. so thank you very much. >> i share the comments by the distinguished senator from arkansas arkansas. in my view, it is access to credit. and in my view it is whether or not are the banks in question and obviously the customer of those banks have an appetite for risk, if we can use that again. and that's to be seen and i just want to assure you all this committee stands firmly behind our efforts to see if we can't clear up some of those obstacles that you talked about.

thank you, so much, for coming. this will conclude the second panel of our hearing. thanks to each of our witnesses for being part of government in action. that's two words. the testimonies provided today is valuable for lawmakers to hear firsthand. to my fellow members who are not present earlier we would ask any additional questions you may have be submitted to the committee clerk five business days from today or by 5:00 p.m. next tuesday, april 28th. thank you so much. the committee is adjourned.

coming up today on our companion network, c-span, a discussion about the humanitarian situation in libya. you can watch the panel hosted by the brookings institution live at 10:00 a.m. eastern. and then live at 1:15 national security adviser susan rice. she'll give the keynote address at the exportism ismmport bank's annual conference. she'll talk trade and exports and national security. she was considered modern for her time. called mrs. president by her detractors. and was outspoken about her views on slavery and women's rights. as one of the most prolific writers of any first lady she provides a unique window into colonial america and her personal life. abigail adams, sunday night at 8:00 p.m. eastern, on c-span's original series, first ladies, influence and image. examining the public and private lives of the women who fill the position of first lady and their influence on the presidency.

from martha washington to michelle obama, sundays at 8:00 p.m. eastern on american history tv on c-span3. and as a complement to the series, c-span's new book is now available. first ladies presidential historians on the lives of 45 iconic american women. providing lively stories of these fascinating women, creating an illuminating entertaining and inspiring read. it is available as a hard cover or ebook through your favorite bookstore or online bookseller. veterans affairs secretary robert mcdonald appeared before members of a senate appropriations subcommittee to present his department's proposed 2016 budget for $168.8 billion. it includes funding to expand veterans health care and transform the va to be more consumer centric. the hearing runs an hour and 50 minutes.

>> he was a vietnam veteran in the marines and presented himself to the heinz va with chest pains. went to see dr. deiter, the head of cardiology in the heinz. he didn't want him to be in his win loss record. referred him to the floor. there, tom expired of a heart attack. wanted to make sure that that kind of a thing never happens to our veterans that we have. competent, strong administration of people. ms. secretary, i have raised this issue with you multiple times. behind that is the story of lisa, a cardiologist as we witnessed this whole thing and thought it was an outright malpractice happening in this case. i know you have a ten minute opening, mr. secretary. >> thank you, chairman kirk.

>> thank you, mr. chairman. i've got a pretty brief opening statement, and then we'll get after it. i want to thank chairman kirk for his leadership on this subcommittee. i want to welcome secretary mcdonald. dr. clancy, mr. pummill and thank you for your work as you appear before this subcommittee, and your commitment to this nation's veterans. mr. secretary, thank you for coming to montana. it was a great trip. very informative. i hope you feel the same way. i hope we can work together to address the concerns raised during the trip. and some of the issues that will be raised today. i have been impressed by your leadership, mr. secretary. your candor, your willingness to accept accountability and confront tough issues. the v.a. is under siege every day. you experience that every day. we have seen several scandals that has shaken the confidence of the v.a. it's created mistrust with

some of our veterans and created mistrust with some of our public. restoring that trust is one of your chief tasks and i know you know that. a lot of the responsibility also falls on our shoulders. it is critical that we provide you with the tools you need to get the job done. i firmly believe that we need to hold accountable those who have abused the authority for personal gain. also, i believe that we need to appropriately recognize and applaud the dedication of the vast majority of v.a. employees who come to work every single day with the singular goal of helping every veteran whose lives they touch. dedicating all our time to pummelling, no pun intended, the v.a. for past failures is not a recipe for success or reform. our veterans deserve more than that. at the end of the day, we're in this together. fully supported by congress, american veterans are entitled to a health care system and benefits program that is far superior than any private sector

or government benefits and for good reason. the v.a. model of providing direct health care and benefits to the nation's veterans is something our veterans have come to rely on. it's something that congress has enshrined in law. so we each have a responsibility here to sustain this model of service. the v.a. must reform and improve its delivery of services to veterans, and congress needs to step up and fulfill the responsibility to fully fund the v.a.'s model of service that veterans have come to expect and demand. i want to thank you again, mr. secretary, dr. clancy, mr. pummill for being before the subcommittee. i look forward to your testimony. thank you, mr. chairman. >> chairman kirk, ranking member tester and members of the subcommittee, thanks for the opportunity to discuss v.a.'s 2016 and 2017 advanced appropriations budget. we appreciate your steadfast support for veterans and the assistance of veteran service organizations.

as v.a. moves from a series crisis, we have a critical opportunity. we intend to take full advantage of it, to make v.a. a model agency in customer experience, comparable to the best private sector businesses. currently, 11 of 22 million veterans are registered, enrolled or use at least one v.a. benefit or service. the cost of fulfilling our obligations grows over time because veterans' demands for services and benefits continue to increase. in 2014, 40 years after the war ended, 22% of vietnam veterans were receiving service connected disability benefits. we expect the percentage to continue to increase. from 1960 to the year 2000, the percentage of veterans receiving v.a. compensation was about 8.5%. in the last 14 years, that's more than doubled to 19%. in 2009, vba completed about 980,000 claims.

in fiscal year 2017, we project we'll complete over 1.4 million claims. 47% increase. there's been a huge growth in the number of medical issues in claims. 2.7 million in 2009. a projected 5.9 million in 2017. that's a 115% increase over eight years. from 1950 to 1995, the average degree of disability amongst veterans was 30%. since 2000, the average degree of disability has risen to 47.7%. while the total number of veterans is declining, the number of those seeking care and benefits is increasing due to more than a decade of war, age related claims, unlimited claims appeal process, increased claims issues, far greater survival rates of the wounded and more sophisticated medical treatments. it's important to understand why. the most important consideration

is an aging veteran population. 40 years ago, 2.2 million veterans were 65 years old or older. that's 7.5% of the population. in 2017, we expect 9.8 million will be 65 years or older. that's 46%. we now serve an older population with greater demand for care, more chronic conditions and less able to afford private sector care. as veterans see positive changes at v.a., and as the military downsizes, those choosing v.a. will continue to rise. we are listening hard to what veterans, congress, employees and vsos tell us. driving us to historic department-wide transformation, changing v.a.'s culture, making veterans the center of everything we do. we call it my v.a. my v.a. focuses on five objectives to revolutionize culture.

and focus on veteran outcomes rather than internal metrics. first, improving the veteran experience so every veteran has a seamless, integrated and responsive customer service experience every single time. second, improving employee experience by eliminating barriers to customer service and focusing on our people and our culture to better serve veterans. third, improving our internal support services. fourth, establishing a culture of continuous improvement to identify and correct problems and replicate solutions at all facilities. last, fifth, enhancing strategic partnerships. we can't do this by ourselves. strategic partnerships become critical. we organize the department geographically as the first step of achieving this goal. in the past, v.a. had nine disjointed geographic organization structures. our new organization framework has one national structure with

five districts, aligning v.a.'s disparate organizational boundaries. veterans will see one v.a. rather than multiple, disconnected organizations. last, my v.a. is about ensuring sound stewardship of taxpayer dollars. we'll integrate management improvement systems to ensure operational consistency. we need congressional help. v.a. can't be a sound steward of resources with the current portfolio of assets. no business would carry such a portfolio. it's time to close underutilized facilities. 900 v.a. facilities are over 90 years old. more than 1,300 are over 70 years old. v.a. has 336 buildings vacant or less than 50% occupied. that's 10.5 million square feet of empty space, costing about $24 million annually.

we could use these funds to hire roughly 200 registered nurses for a year. pay for 144,000 primary care visits of veterans. or support 41,900 days of nursing home care for veterans. please help us do the right thing. my v.a. reforms will take time, but in the long term, they'll allow us to better care for veterans. our 2016 v.a. budget request allows us to transform under my v.a. it requests $168.8 billion. $73.5 billion in discretionary funds. and 95.3 billion in mandatory funds. the increase of $5.2 billion above the 2015 enacted level. to continue serving a growing number of veterans seeking care and benefits. the research is required in the 2016 budget request are in addition to those congress provided in the veterans choice act.

we don't know how many veterans will ultimately use the act for non-v.a. care. what we call community care. or how much it will cost. our estimates range from $4 billion on the low end to 13 billion on the high end. we do know that our recent decision to change the definition of the 40 mile provision of the act from straight line to road distance will approximately double the number of veterans eligible for care under the act. as gibson testified last week, we propose funding the cost of the new denver hospital by requesting funds from the act. the denver project has a long history. while poor v.a. project and contract management contributed to problems, decisions made years ago brought us to this point. in my opinion, the significant increase in the cost of the denver project results from four factors. first, not locking down design early in the process.

second, some design aspects that add a cost. third, increases the construction costs in the denver market, while we had not effectively negotiated a firm target price. fourth, premiums paid to contractors for perceived risk due to problems with the project. we've learned from these past mistakes and are taking meaningful, corrective actions to improve performance. among the actions are requiring construction projects to achieve at least 35% design prior to publishing costs and schedule information or requesting funds. second, implementing a deliberate requirements process. any significant changes in project scope or cost will be approved by me prior to submission to congress. third, institutionalizing a project review board, similar to the core of engineers district

offices use. fourth, conducting preconstruction reviews of major projects. fifth, integrating medical equipment planners into the construction project teams from concept through activation. those measures will help us in the future but they won't finish denver. after analysis by the core of engineers, we inform the committee that the total estimated cost of the facility will be $1.73 billion. authorization increase of $930 million, and additional funding of $830 million. we believe requesting funds is the best approach among the difficult choices before us. now, we must work with this committee and others to secure the funding. last, if the president's budget request is cut by the $1.4 billion proposed by your colleagues in the house, those reductions would have these effects. it would cut veterans medical care by $690 million. the equivalent of over 70,000 fewer veterans receiving v.a.

medical care, compared to the president's request. it would eliminate the funding for four major construction projects. this cut would reduce v.a.'s ability to provide additional outpatient services and will impact the following projects. the planned rehab therapy building in st. louis, missouri. the initial phase of the alameda, california, outpatient clinic. construction of the french camp california community-based outpatient clinic. the replacement 155 bed community living center in perry point, maryland. it would also eliminate funding for cemetery expansion projects in st. louis, portland, riverside, and pensacola, and a new column in alameda, reducing our ability to provide burial honors for as many as 18,000 veterans and eligible family members annually. the impact of the cuts is unacceptable to me and i know it is unacceptable to members of

congress. chairman, ranking member, members of the committee, thanks again for your support for veterans and for working on these budget requests. we look forward to your questions. thank you, chairman. >> on denver, i'd ask unanimous consent if i can put in a statement that cory gardener gave us on this issue. so at $1.173 billion, the denver hospital would take up so much money, it would fund missile defense for 7.9 years. in the case of -- it would also take up four years of mil-con for special operations. that's an awfully big hit. i would add to your list of things that were done wrong in denver, is that you didn't have the army core of engineers overseeing the construction of

the facility. i want to make sure by june 1st, you have already done that. >> mr. chairman, we've already done it as of today. i mean, the core of engineers is active on the ground. we're working with them in concert. we continue to want to use the core of engineers in other major projects. may i make a statement, mr. chairman? this is not really a hospital. it's a medical complex. this is what the complex looks like. as you can see, it's many buildings. it's not one building. it's very close to the university of colorado medical school, who is a partner of ours. so this is a major undertaking of many buildings, not just one hospital. just wanted to be clear on that, sir. >> i would say that your proposal has been to take $1 billion from the care act to sink into this thing. that would eliminate about 20% of the care act money. the promise we've already made

to american veterans, we don't want to go back on that promise because of the mismanagement of the denver facility. we need to have the people involved with this fired and no longer a part of the payroll. >> the gentleman in charge of construction at v.a. is no longer with us. we conducted an administrative investigation -- >> no longer with us, meant he quietly retired. he's collecting from the taxpayer? >> he retired the day after the interview he had. to the best of my knowledge, both in the private sector and the public sector, it is impossible to claw back a retirement unless malfeasance is proven and unless the investigation is ongoing. >> we had evidence of a whistleblower who sent an e-mail

very early on and said this project is likely to go $500 million over budget. that whistleblower was fired by the v.a. because of that e-mail. want to make sure this process of nailing whistleblower is wiped out in the v.a. how would we have that happen? >> i'm not familiar with the situation you're describing. i would love to be able to get more information on that and follow up. we have been working with the office of special council to make sure all of the whistleblowers who have been retaliated against -- >> let me get it for the record. the person you're talking about was glenn haggstrom. >> yes sir. the person leading construction not the whistle-blower. >> saying we would go $500 million over budget was delano grosby and that person was let go and turned out to be exactly correct on all the warnings to va on that subject. >> as i said, we have said within the organization it is

unacceptable to retaliate against anyone who is criticizing our operation. in fact, we believe that we want employees to help us improve our operation. the only way that can happen is if they're critical. we work with the special counsel to get certified in our activity activities around whistle-blowers. we have reininstituted several whistle-blowers to new jobs. we celebrated the with a national award some of our whistle blowers, one in particular from phoenix. it's unacceptable. >> i want to make sure we don't wipe out the cares money for the overrun in denver that we standby our veterans there >> we just don't know how much of the care money would be used. the choice money used and how quickly.

>> mr. secretary, i understand if we wrap up the denver situation, it cost $3 million a month to maintain that. do you understand that to be true? >> i'm not familiar with that figure. we don't have that figure, but we'll check on it. >> let me go to mr. tester. >> thank you, mr. chairman. everyone knows how important this committee is to our veterans in this country and how we need to do a job together. with that being said, i would note the house subcommittee mark came in $1.4 billion as you pointed out, below your request. and they achieved this largely by freezing the major construction level of fy '15 levels. and including a number of other funding cuts. in the past, there have been a lot of folks that have criticized the v.a. for not being frank about what you need for money.

a lot of criticism was warranted led to funding shortfalls and subsequently had to be addressed through emergency legislation such as choice act. and now, a lot of the folks who demanded from you are the same folks that refused to give you the flexibility and resources you need to achieve the results that our veterans need when they come to see you. is it fair to say at the house subcommittee, it is inadequate. >> it is inadequate. it will cause veterans to suffer. as i said in the house subcommittee meeting on the budget, we put in this budget knowing it was going to be tight versus the demand we faced. and in addition to the budget itself, we wanted flexibility to be able to move money from line-item to line-item because as i said to the chairman, we can't predict whether veterans are going to go for community care with a choice act or whether they're going to go with va care.

because of the way the budget is formed, i don't have the flexibility to move money where the veteran goes. >> is it fair to say that due to vietnam veterans getting older you're getting a lot more demand on your facilities? and if that is true, can you tell me what that 1.4 spending cut would mean to the veterans and to their families? >> the 1.4 spending cut basically means that less veterans will get care of it. the medical care has been cut by 690 million, which is the equivalent of 70000 fewer veterans receiving va medical care. >> so as you see teedemand go up you're not going to be able to come close. >> we won't have the money to care for them. >> hiring. we have discussed this several times. we have given some increased funding and mechanism to address workforce shortage in the v.a.

it looks as if it is static at best. we could be losing ground. it seems we're battling on two fronts not only attracting new physicians and medical personnel. but keeping the ones we already have. the v.a. needs the authority to and resources to hire good competent personnel to let them do their jobs and hold them accountable for their outcomes. i'm worrying the cascading of negative press about the va, personnel and care it provides is crushing the department's ability to address the workforce needs we have in montana and i assume elsewhere in this country. this is not to excuse the wrongdoings or dismiss the legitimate allegations of misconduct, but a lot of folks around here are quick to go after ad line at the expense of hard working men and women who are doing their job working with the veterans, even if it means less pay and longer hours. my question is to you, as the head man, to what extent has

this impacted your ability to recruit to the va? >> senator tester, as you know, i've been to over a dozen medical schools and talked to candidates to become nurses and doctors at the v.a. and the constant haranguing on things that have gone wrong months ago years ago, has affected the public perception of the va. it makes our recruiting job that more difficult. we have increased the salary bands of our doctors. we are looking at competitive pay of providers within our system. we have hired more doctors. we currently have hired over 800 more doctors, over 2,000 more nurses. and we have opened new facilities. we opened about 17 new facilities a year. but the demand as you've suggested has increased. we've gone from roughly 4 million outpatient patients to over -- nearly 6 million. and that demand's going to increase as we continue to improve the system and improve our customer service.

and we've not even seen the full effect of the iraq and afghani wars yet and the veterans who fought those wars. we have to build a capability today to be ready for five years, ten years, 20 years from now. and that's what our plan does. >> i'll talk more about those capabilities next round. >> let me add on to that. i understand that glenn hegstrum, responsible for the debacle in denver got a $60,000 bonus according to senator gardner. >> and if we're giving big bonuses like that, how can we ever take care of veterans? >> i believe that bonus was for 2013 or before. and not for recently. we've got the administrative investigation going on. and as we get to the bottom of this, we will figure out what the appropriate action is. >> mr. boseman.

>> thank you, mr. chairman. and i agree with the senator from montana. the vast majority of the v.a. personnel are doing a great job working very, very hard. i think the thing that shows that is how few have actually accessed the program that we were trying to stand up so they'll have to travel. you know, many of them are traveling even though they can stay home. but it's hard. and i understand the argument and i'm going to bring up an issue that was before your time. yet, it is hard in the sense that, you know, people are losing faith, congress is losing faith. we have an issue in little rock. congressman hill has been looking into this very vigorously. where we have a situation in february of 2012, the v.a. received an $8 million grant to build a 1.8 megawatt panel system at the veterans hospital in august of 2012, the v.a.

approved a parking deck project, which is located in the same place as the solar panels. in january of 2013, construction on the solar panels began on the same location as the planned parking garage. v.a. officials were aware of the conflict at the time. in august of 2013, the solar panel constructions completed in april 2015. then, you know, the v.a. dismantles them to build the parking lot and it's still not clear as to how much it's going to cost to put them back. and whether or not they were ever able to function in the grid to begin with. so, i guess, what i'd like is, you know, we've got these things going on. what are the safeguards that we've got? how are you dealing with this kind of stuff? >> well, i mentioned some of the changes we have made to the process of construction in my comments.

i've also mentioned we've changed the leader. we have a new leader named greg gibbons. he's got experience across many sectors of government and has done this before. i also happen to be an engineer. my certification was an engineer in training. i studied in engineering at west point, from the state of pennsylvania. and our deputy secretary's a former cfo of a bank, very bright, intelligent guy. we're digging into this in the best -- in the strongest possible way, and i would just simply say that's not going to happen. i mean, that happened in 2012. i appreciate you bringing it up. but that's not going to happen in the future. it's just not going to happen. what we're doing is we're having design committees, we're having outside people review our processes, we're using the corps of engineers the best practices available in industry today in order to make our system better. one thing we have to be careful

of, that process started then. and i don't know how forthcoming v.a. was in admitting the process was there. and even now, when you ask how much is it going to cost to reinstall, we get terms like, i think, procurement sensitive or something like that. that's not appropriate. >> i agree. we are trying to be more transparent than ever before. and i would hope that since i've become secretary, you've seen an increase in my presence and the transparencies as a department. i still every day do catch instances where i wish we were more transparent and better about customer service. >> the other thing i'd like to mention. and i want to compliment you in this regard, we had a group get together in little rock to discuss reimbursement to providers that have provided outside care.

you'll have situations that arise, now with this 40-mile rule that the v.a. owes this money, it appears the v.a. owes a lot of people in arkansas a lot of money. and has not been very forthcoming in paying those bills. that's a real concern, really for a couple of reasons, in the sense it is another thing that it makes it such that the trust issue that we talk about. the other problem is, if you don't pay your bills, they're going to quit dealing with you. and then, that's the greatest thing. and that really is going to affect quality of care. can you quickly mention that? >> i will, and maybe i'll ask carolyn to comment. i talked about the five strategies from my v.a. one of them i talked about was improving our internal support services. and going to assured services model where we centralize the bill paying. so that's all the people do is something that we're in the process of doing.

we're not done yet. we have more work to do. that will improve the rates with which people get paid. >> carolyn? >> yes, i would just add that we are tracking this rates of payments and how old the claims are on a weekly basis. and i am pleased to say that what had been struggling for a while is actually improving faster than other networks, but we will keep a very close eye on it. because you said it well, senator, if you don't pay your bills, people are going to say, gee, i'd love to help you, but i have to pay rent to veterans, and that's not going to work. >> mr. chairman. and, again, your people were very helpful and did a good job in arkansas. >> thank you, sir. >> mr. udall. >> thank you very much, mr. chairman. and let me along with the rest of the members echo your new aggressive leadership in what you're doing in terms of, in terms of veterans. i really respect the team that

you brought in and this more business like approach to what is an incredibly important issue for veterans in my state and across the country. and let me thank you, too, for the constructive dialogue we've been able to have moving the v.a. forward as you near the end of your first year as secretary. as we discussed during last week's visit, new mexico's key issues can be narrowed down to ensuring the veterans have access to care. too often they're prevented from receiving the care they deserve. because of barriers to access, starting with disability claims. many veterans are not able to have their claim adjudicated in a timely manner. in new mexico, progress to reduce the backlog is stagnated. and that's this chart i have behind me here. i think i've showed you that before where we've come down dramatically. we've made good progress, but

it's stagnated. and i'm hopeful we can get the resources to make progress in reducing the backlog once again and where it's stagnated, started in a downward turn. with regard to scheduling and the scheduling issue around the veterans v.a., last summer showed we had a lot of work to do to ensure that veterans are seen on time and that the scheduling system was not being utilized in a fraudulent manner. as i mentioned, i asked the v.a. oig to look into this matter. i'm awaiting their findings, furthermore, we need to do more to find creative solutions to the recruitment and retention problem facing the medical community in rural clinics. that is not something solely a v.a. problem, but i believe that it is an area that v.a. can take a leadership role to address. based on the budget requirements and the vha's experience, which

would be the best way, and this has been mentioned by several questioners here and some of your answers. which would be the best way to improve access to quality care and expanded fee for service program? or a program which aims to recruit and retain rural physicians and nurses at rural, and which helps to expand telehealth? and which would be the most cost-effective way for the american taxpayer? i know you've given this a lot of thought. >> well, sir, i think we need to do both. we envision a system in the future which is a combination of va care and community care, working together in a network to make sure our veterans get the care they want. i'd like to briefly comment on your chart. >> please. >> i think if you back the time period up, you'd see a more dramatic decline in the claims backlog, and also -- >> go back a couple of years? >> yes, sir.

and i also think the reason it leveled out was we had 660 additional head count because we'd been working mandatory administration because we have been working mandatory overtime in veteran's benefits administration to drive this backlog down to zero. as i was going around doing town halls amongst the people in veteran's benefit administration, i was seeing an increasing, not surprisingly, increasing conflict between labor and management. mandatory overtime is not the way to run a business. that 660 people were stripped out of the choice act before it was passed. you did not give us you, congress, did not give us those people. we took off mandatory overtime hoping we could continue to drive it down, that straight, it didn't work, we had to put it back on so we're still doing mandatory overtime, which we've been doing now for several years which is not a good idea.

we have more people in the 2016 budget that we need in order to get the backlog down. we're going to get to zero by the end of the year but we need those people. also, i think there's a couple of months that are not on your chart, danny could you update us on that? >> yes, senator. first of all great chart, your numbers are dead on. did a great job on your staff. >> we should say we publish our numbers every two weeks we wanted to be transparent and know what our numbers are. >> we appreciate that. as we came out, as we went back into mandatory overtime, we started pushing again. you see the dart worms where that is your number pending that has come down, because that has come down, as of right now in april you're down to 40%, 37% in the backlog 3500 claims pending, and 1500 of those claims in the backlog. you will see the continued downward slope that you saw earlier in your chart for the next three months, and a huge

dropoff this summer because pretty soon, every claim we're going to be working is going to be in the backlog. and that won't just be for your state, that'll be for the entire nation. we should have zero backlog this year. >> thank you. >> maybe i can ask caroline to comment on tell health. >> i've run out of time. just if you could just very briefly, caroline. >> i would just simply say that new mexico is really a model with dr. aurora at the university of new mexico working closely with us. this is a matter of the veteran can't come to the medical center then we can use telehealth to bring that expertise to the clinicians working out in the rural area. we're using it as well. >> thank you thank you very much. and dr. aurora he's pretty amazing. thank you. thank you, mr. chairman, thank you for your courtesy. >> thank you, mr. chairman, i want to thank the secretary and others for being here today. it's nice to see you again. i would really like to thank you and the va for the flexibility and willingness to work on the

40-mile rule. we talked about it. as you know in a state like mine, west virginia, 40 miles is the crow flies could be hours in the car sometimes. so making this change really helps veterans across the country, certainly in my states thank you. i know you're aware of this issue, we talked about it, there's an outpatient clinic there that's been closed three times for, i believe it's mold, in the facility. some unhealthy conditions in the facility. because of air quality. and i think i've read that the lowfield mobile unit is going to be serving the 2400 veterans in that area. i was wondering if you had i know this is very specific but, if you had any other alternatives, are you going to replace that facility of what your plans are for that? >> i'd like caroline to comment about the specifics. i'd simply like it reiterate what i said. our facilities are too old. hvac systems need to be replaced every 25 years. our facility's too old.

i talked to you about facilities that are over 100 years old 90 years old, this is unacceptable. and we've got to decide which facilities to close. i talked about that and which facilities to refurbish so that we don't have these chronic problems. we can't do that with a budget that's been marked down $1.4 billion by the house, and the major construction part has been gutted by almost half. >> so i would say that we are hopeful for the moment that we may actually be able to resolve these air quality issues. i also want to point out that in terms of 40 miles from what that cbac is not part of the calculation anymore. that should offer more flexibility to the extent that they are community providers. and the mobile unit those are the plans that we have right now, but this will remain high on our agenda. >> thank you. yeah. it's definitely a problem, and obviously, and i understand the facilities -- i would just

briefly ask you and i wanted to ask you this as my last question because i ran out of time. since you were on it on the facilities, you mentioned excess properties, 336 buildings are empty. you said you need help with that. how do we help you with that? it's not just budgetary statutory? >> the president's put forward, what i would call a civilian brack, the idea to take our facilities and have an up or down vote across the federal government. i just think that's a brilliant idea. we've got to become more efficient. i would suggest that it be passed and we go at it it. >> let me ask you you mentioned these are the my va regions. >> yes, ma'am. >> and dr. clancy mentioned vision, so this is this is va 101 for me, are the visions gone and it's now all -- >> what we've done is we've started a process where we're aligning the visions with those regions, and in doing that,

we're taking a new look at the visions and seeing if there's an opportunity to reduce the number of visions. the issue that we have right now, and this is a huge issue of, that reflects the actions we're taking and accountability 91% of our medical centers have either a new medical center director or a new leadership team member. we're really weak on leadership right now. we have new leaders in place, and what i don't want to do is reduce the spans, you know, increase the spans of control so much that we take immature leaders or leaders with less experience and put them under more pressure. so what we're looking at right now is a modest reduction in the visions. and an attempt to more align the visions to state boundaries. >> i notice in our state of west virginia, we're in the same my va. three different visions which makes no sense. >> that's one of the things we want to fix. >> again, the leadership issue.

the clarksburg va in clarksburg, west virginia, has unfortunately lagged behind as one of the top, one of the top people who had the biggest wait times. just had a leadership change at that va. are you seeing anything yet, too early to tell? do you have anything to report there from clarksburg? >> i would be happy to follow up with you. i want to make the point for you and all of your colleagues that we are tracking the excess and quality issues on an daily basis. i would be delighted to followup. >> thank you for that. >> in fact, we would be happy to invite any of you to come to our daily standup that we do where every morning we review the data and take action. >> all right. thanks so much. thank you. >> mr. shots. >> thank you mr. chairman, i know va is working with dod so the two can share service members medical records, but progress as you know has been

slow. gao cited progress as an herb when it added va to its 2015 high-risk list. according to gao, quote the two departments have engaged in a series of initiatives intended to achieve electronic health record interoperaability. its been continuously delayed and has yet to be realized. the ongoing lack of electronic health records, interoperaability limits va clinicians to readily access information from dod records and so on. what kind of progress are you going to be making and when can we expect for you to be off the jail high-risk list? >> well first of all, when i met with the head of the gao, i asked to be put on that list. we run the largest health care system in the country, and with the crisis that have occurred, i thought it was appropriate that we are on the list. i think the transparency and visibility is important to improvement. secondly, we've made a lot of

progress on the electronic health record maybe i could ask steph to go over there that but i would like to offer to the committee that we would be happy to come to your offices and demonstrate the inner op rablt once you see it, you become much more conversant in the progress that's been made steph. >> thank you, very braefly if you wouldn't mind. >> yes, sir. >> we've been hitting on three levels. the first one is moving the data within the existing systems. our future is how do we get all the data in a single view? and that is the demonstration that the secretary offered where today you can see all the va data for any medical center and dod data as well as third party provider data in the same screen. its been normalized the providers can look at it and actually make decisions based upon a continuum of time in

terms of what data. >> what remains to be done? >> the two next things is the viewer that shows that data is just for viewing, we're not able to change the data. that's the next generation. the -- >> is that a big techno logical break-through, it doesn't sound hard. >> it's two-part the first is common standards. so working with onc, the office of the national coordinator to come up with national standards where there are none. we work -- >> clinical standards or data base? >> data standards. we're using the same units same definition. a lot of effort over the next couple of years to make sure the right standards are in place. then convert the data to meet the standards. then the second is to make sure that the tool is there that shows the data at the same time. we can start changing the data at either end. and so -- >> time frame for all of this? >> enterprise health management platform we are programmed -- >> let me step in here and deliver a threat that i've been saying to the dod if they insist on having different standards

that we will go with just a va standards because you represent times the number of population. that that will force the two bureaucracies to agree, and it'll be a va standard? >> thank you for that, sir. a lot of strong work and if i can bring that third party in, the office of the national coordinator does the standards for third party and private providers, and with the access to care act, with more care going outside it's not just the va and dod sharing, but how do we get the private providers in the same standard so their data can come in and be part of that? >> start to finish -- >> so we are -- >> we are using some of this work as you're moving along but what's your total to completion? >> so the enterprise health management platform will be at 33 sites by the end of the calendar year as a demo. again, next generation. then we will be adding capability on over the next three years until we phase out

what we have today. >> okay. thank you. and mr. secretary i want to ask about the island of hawaii. 70% of the state's population. i've talked to you a couple of times about it. this will double the availability of clinical services for about 1.2 million people. and tens of thousands of veterans in the city and county ofman lieu lieu, could you give -- honolulu, could you give me an update? >> this is going through the planning process right now. it'll be late fall of this calendar year, and then the award will probably happen in the first quarter of fiscal year 2018. so it's going to take time, but we're very very excited about the access opportunities. >> the award, it'll advertise this year, and then the award will go out in '18? did you mean to say '16? >> no, the actual final award and construction will happen in the first quarter of fiscal year

2018. and the construction will be complete in the last part of 2020. >> okay. my time has expired, i'd like to answer, we can take it juf line. i'd like to go why you go two years to advertising and construction. thank you mr. chairman. >> thank you very much mr. chairman. mr. secretary, i too want to thank you for working with many of us on the 40e-mile rule to change it to the crow flags to driving distance like the senator, i represent a state where, as the crow flies and the driving distances are two very different things. but the va still does not consider whether or not the type of care that the veteran needs is available at a va facility that is within that 40-mile

limit. for example, in western maine, there is a va mobile unit in maine that operates only two days a week. we're glad to have it, but obviously, it's nowhere near a full fledged facility that can provide and meet the needs of our veterans. now, that means that veterans in jackman, maine could go to a hospital, local hospital, that's 35 miles away still a distance, but much much closer than going to the va hospital for care. or they could go to the local community health center, right there in jackman to get care if the 40 miles were considered to be measured in terms of whether the service is actually available. the service obviously is not available at a two-day a week

mobile clinic. it is available at the community health center and at a hospital that's 35 miles away. but these are not options available to our veterans in this area due to the interpretation of the 40-mile rule. are you giving any thought to being more flexible in that area as well? >> we're in the process of working with members of congress on what we discover. first of all the idea that whether or not you can get care from your local facility is actually written under the law. so it's not an interpretation. that was the way the law was written, so if you would like it changed, you need to change the law. secondly, our initial calculation suggested if we were to make that change, the minimum increase would be about $10 billion a year.

not over the three-year period of the choice act but a year and it could be as high as $40 billion a year. if we opened up that capability or that of a pature for veterans. we're in the process of looking at this. we want to come back to you with the boundaries on what we discovered and what our assumptions were and have the discussion if that's a law change that you would like to make. >> well, there bha some sort of middle ground here because in the case i gave you where the, the facility is not even cboc it's a mobile unit only open two days a week it just doesn't seem like a reasonable interpretation. >> there's a middle ground point that we can take which is to, in a sense change the geographic burden to give the secretary more flexibility to allow people

with a geographic burden of some kind to use the choice care, the community care and that we're also working on. and we'll come back to you with the definition of that and how that will affect and how many people that will affect. >> thank you. i also want to associate myself with the comments of the senator from arkansas about slow payment to physicians and hospitals. this is a problem in my state as well. and the problem is that if the va ultimately denies the claim the hospital has missed the deadline for filing a claim for reimbursement to a secondary insurer, such as medicare. so the health care provider ends up not getting paid at all. and we really hope that that

energy will be put on the problem. >> as i said, it's one of our most important strategies. we simply have to get it right. >> thank you. and finally, the ten seconds that i have left, the va in consultation with the national association of state veteran's homes began working on regulations that would govern adult day care so that there could bes rebit care for our veterans living at home, but may be suffering from alzheimer's or other dementias. and that has been in process since october of 2008. far proceeds you, but that's more than six years ago. and for the record, since i'm now out of time. i would ask you to give me an update. this would make such a

difference to so many of our veterans and their family members, and it also would reduce nursing home costs and costs that your state the veteran's, the state veteran's homes. so i really think this is something that should be finalized and should not have taken six years and still be pending. >> we agree, and we'll get back to you. >> thank you very much mr. secretary. >> thank you, mr. chairman and ranking member for this hearing today. secretary mcdonald, you noted in your testimony that the va is really at a cross roads and that you struggle with significant challenges including internal management controls as well as the delivery of safe appropriate care. and we've talked a number of times as i have with dr. clancy about how the two failures have had really tragic results at a

particular medical hospital in wisconsin, the va medical facility. and i look forward to working with the members of this committee on a number of steps we can take including legislation and problematic initiatives to, to correct these failures. to improve the quality of care that our veterans have earned. dr. clancy your clinical investigation into into the toma va you have initial on interim findings, and i know it's ongoing but with regard to opioid prescribing you found that toma was almost double the national average when it comes to rates of prescribing opioids and others concurrently.

which is an unsafe practice at the va's own clinical practice guidelines for opioid therapy warns against jason is a marine who was one of the patients prescribed both of these drugs, and tragically passed away at toma va. i want to start in on asking you if you believe that the va has adequately managed the implementation of the clinical practice guidelines for opioid therapy at local va medical centers. >> i would say that we made a good start and we have far more room to go and that's just what we're doing right now. the initial approach which predates both of us was just started the network level then to go down to the facility and as we've had a chance to brief you and your colleagues, this is now getting down to the individual clinician level. because we can do a much much better job.

the irony of course, is that at that facility, toma, you are veterans are less likely to be on narcotics than in the network or the national average, but if they're on them they're getting very high doses and far more likely to be on the drugs. and we're also looking at how we can start to bring this down to the individual patient level, and i think of that in two ways. one is that as you would expect, the initial efforts to reduce the use of opioids probably were most successful with those veterans struggling the least, and what we have now is a group of veterans with the most challenges with chronic pain and other complications. the second is i think that we desperately need to figure out what is the risk point at which someone transitions from taking narcotics sometimes, say for low back pain as an example, is it a month, is it a couple of months?

you know, where is that point where the risk level goes way up. because i think that's where pain management intervention is most likely to be successful. so we're going to have to start to customize this much further. which is the whole point of the academic detailing initiative that has now been mandated and will be required for full implementation by the end of june. >> i want to followup on two points you just raised in that answer. one, you know, one of the real problems at toma was that obvious, dangerous prescribing practices were considered within the bounds of acceptable care. and so, question one is do you believe that the current va prescribing guidelines, which were last updated in 2010 are due for an update? and then the second question and it may have to wait until a second round, relates to driving these down to the patient level and involving patients and their

families more actively in treatment protocols. >> so, two quick responses given time and happy to followup with more. first is that the guideline which was developed jointly by the department of defense and va will be updated this year. they're going to be starting their process this fall. because we know that on average practice guidelines need to be updated about every five years, absent some kind of new breakthrough evidence. that's the first thing. and the second thing is that we actually now require that all patients on narcotics actually sign and informed consent, and that's part of their medical record every year. i would say that's a down payment on the kind of conversation you just referenced and again happy to follow up further.

>> thank you for calling me i feel like i come in like a gust of air. first of all mr. chairman, mr. chairman kirk, i would like to really congratulate you on the work you've been doing in the va. you've been proceeding with due diligence, you had that usual sense of bipartisanship that's been characteristic of this committee and both of you have been fighting like hell for our veterans. just as the vice chair of the floor committee, i want to thank you for the job and do what i can to get you a juicy allocation. i would like to first off say hello to secretary mcdonald and to his team here. i'm going to engage though in a bit of a maryland question. first of all mr. mcdonald thank you for the job you've been doing but you've got a big job. and i think you're finding that under every rock is another

rock. and we found the same thing in maryland. i asked the inspector general of the va to investigate claims that have come to my attention in my constituent area program. allegations that somebody had mouth cancer and was not properly tubed or fed. somebody who didn't get mental health appointments and then later committed suicide. it was not me to finger point, but to pinpoint and the inspector general came back with findings. some were deeply troubling. that my own, the facilities in maryland didn't follow the outpatient feeding policy. that they needed to comply with policies to basic protocols on mental health services. but what the inspector general did was come out with nine specific recommendations. rather than taking the time to read them, you know them, i have

the report here now. could i have, could you comment on it? and could i have your commitment that you will do everything you can to followup on the inspector general's recommendations? >> yes, ma'am. i'm a big fan of the inspector general and the work the inspector general does. when i was confirmed, i had i think about 100 ig investigations pending. i think we're down to somethingless than 70 now. so they're still coming out. and most of them date to a year to two years ago. but we take them very seriously because they're an opportunity to improve. and we mediate we remediate every single finding they come up with, and we will certainly do that in the case of those in maryland. >> did you want to the say something, dr. clancy? >> no, i just would have added exactly what the secretary said. we will followup closely.

>> are you familiar with this? >> yes. >> kind of surprising. >> yes. >> well first of all, i really do appreciate it and look forward to staying in touch on the followup of the recommendations because they're not only for maryland, but they're also for the rest of the country, feeding tube protocols, mental health response time protocols, the basic, really bread and butter. now the other is the question related to choice and the implementation of choice. and i've been an advocate of that. have you all covered that in the questions? >> yes, ma'am. someone in my -- go ahead and ask and we'll fire away as quickly as we can. we also covered the replacement, 155 bed community living center in perry point, maryland, that's been stripped out of the house budget. >> you're replacing perry point?

>> yes, ma'am. we had in our 2016 budget money to replace the 155 bed community living center in perry point and that was stripped out of the house markup. >> well, i would like to mr. chairman, mr. vice chair, talk with you about this. this is a facility that is really oriented to mental health. and it takes care of veterans with significant mental health challenges, as well as alzheimer's unit. some parts of that building are -- oh my gosh, pre-world war i. i won't ask the committee to come up, if the staff would just to validate the need and the necessity for the request. i think it's a compelling need. and we'll talk with about it. >> we do too. >> but on the choice card, i understand that, and it's a program that i supported to

shrink the waiting list, but i understand of the 8.5 veterans, that have been issued choice cards, only less, i mean less than 1% had been authorized care, non-va facilities. could you give us the status of the choice program is it working the way we hope? if it's not working, is it bureaucratic delay, what's the issue here? because this was meant to be an opportunity for veterans who either work quite, my mountain county veterans. they're far away. i mean the eastern shore, nine counties. particularly -- >> first let me start, senator with the thought that community care is important to the future of the va. currently today, even before the choice act, about 20% of our appointments are community care. meaning outside the va. so this is very important to us. in the choice act, it's not yet

worked the way we thought it would. we haven't had the number of veterans go outside the va system and use community care. so what we've done is we've redefined the 40 miles how you measure the 40 miles that's driving distance now. we think that'll double the number of veterans using the choice card. we think that's a big improvement. we're also looking at other improvements, we're doing marketing, we're doing websites, we have a public service ad. we're writing letters to veterans, making sure they understand the system because many of the cards went out over the holidays, and mentally a lot of people don't look at their mail over the holidays. marketing is necessary. but we're looking at everything we can to maximize the impact of the choice act. >> well, thank you. my time is up, i would just say to my colleagues, the choice act does offer an opportunity and perhaps you could use the 535 members of congress throughout town halls and so on our news

letters, to help trub dor that. we hear the complaints we'd like to share with them and an opportunity that -- >> that's a great idea. >> you know and not political, nothing political but really about this opportunity particularly for the primary care that this could provide. >> we would love to join you in writing letters. we'd also love to put a link on your website to the choice care website. anything we can do to increase communication, we'd love to work with you on that. >> i think that would be fantastic. >> all members. >> thank you very much, mr. chairman, coming in on that. >> dr. clancy. >> dr. clancy. listen, a friend of mine i'm a liver doctor, a friend of mine tells me that the va budget for treating it is exhausted. currently the only folks that can clear hep c are those with voe sis. now, i suppose, i mean if you

have is a row sis that's great. really, you want to catch it before then. >> as you're aware, the treatment for hepatitis c is very expensive in the private sector it's roughly $1000 a pill. we get it for about $650 a pill. so our treatment is cheaper and arguably we have the best protocols of any medical system. so we do want to use it. but it has become a huge proportion of our budget. and as a result of than, we've asked for incremental money in a supplemental appropriation for hepatitis c specifically because i think it's a moral and ethical issue that we have the treatment, we know what to do and we have patients that need

it because our population is disproportionately has hepatitis c, and we can't use it. caroline, do you want to -- >> sure. we are doing a far better job than the private sector in terms of screening and treating those with hepatitis c and getting those identified. so forth, we have cure rater twice as high as the private sector -- >> it's about 90% in the private sector. >> the proportion of eligible -- >> got you. >> sorry i used the wrong terminology. >> now let me ask, just a followup, i want to learn here. the fella told me that listen, what we're told is send someone out to get their prescription from an outside provider which would trigger the choice act fund of money, but then they can get their -- once they have the rx, they can get their followup in the va. i guess, you eluded to this in

the earlier part of your testimony. if the pot of money for the choice act is not being used for pharmaceuticals, we cannot that's not fundable i am gathering. we can't say listen no one's treating hepatitis c except the va docs and they have room in their slot. so let's let them access the portion of the money, is that correct? i'm asking, i don't know. >> your point is correct is that the the inflexibility of moving money causes us to try to do different things with different pots of money. by sending someone out, we can use the choice care money and get them treated, whereas if they were internal given our budget issues in form si, we may not be able to treat them. >> so the pharmaceutical portion of the patients care is also under the choice act. it isn't just the doctor's visit, the surgery whatever it's also the pharmaceutical? >> so what we're thinking tle

and no final decisions have been made although our doctors are, very, very strong opinions because we have they have built up a tremendous capacity and expertise, is that we would refer eligible veterans to a community provider, and that they would come back and get the medications from us which we think would be -- >> i get that. >> in the tax payers, it would be what we paid for the medical -- >> going back to your protocol. if off good protocol and whom to treat and whom not to treat as a doc i would not like that kind of discoordinator natoed, we'll go out here because that's how we access this pool of money. is there no way around that? >> what we're trying to do is get as many veterans to this treatment adds possible. this probably wouldn't be the

ideal design it would have some payoff, i think, of expanding the capacity in the private sector to take care of other patients with hepatitis c, but it would require a lot of it very close coordination back and forth between va docs and docs in the community. and it wouldn't work everywhere. it's not going to work for example in new mexico -- >> there's no way for a va doc to get to that pharmaceuticals. it seems like we are trying to really jerry rig -- >> right now that is not the case. and it gets back to the secretary's point about inflexibility of budgets. >> another question, but i'm out of time. i yield back. >> we would not need a liver transplant, as i know, as i have heard, it's about $1,000 a pill. a liver transplant is about 300,000. if we can avoid 300,000 grand by curing the veteran, we'll have a much better outcome. >> mr. chairman.

>> we agree. >> if i may say now speaking as a liver doctor, there's four stables with cirrhosis the stage before transplant need is the fourth stage. you want to catch them in the third stage because it slides into the fourth. so if it there's any way to expand coverage and i'm going over and i thank you for your indulgence indulgence. >> mr. chairman, just speaking as vice chair here -- first of all, there's the medical reason of like staying with one place. in other words, va is your medical home. and it seems then just sending them out is because your inability to have flexibility in money. so, here is what i'm suggesting to my leadership here, i'd like to hear what are the -- why -- what is it that you need from us

to give you the flexibility to do that? and number two what are the impediments to do that? either we have to go to authorizing could we do language here, could we do something because it would seem one patient, doctor-relationship, you want a medical home -- >> yes. >> you actually get these pills at a cheaper price because you can buy in bulk. >> correct. >> and now there seems to be just bureaucratic restuff based on our law. i would, with your capacity and the concurrence of senator cochran to talk with you about this. i think dr. cassidy you've identified an excellent point here -- >> mr. secretary -- ma'am, this is a an important issue for hep c because we're putting our doctors in the position of making decisions about

somebody's life or death, whether they go to community care or our care but this is an important issue for the committee in general because once we decided the choice program, we're allowing the veteran to choose where they go. i don't have the ability to move money from va care to choice care or from choice care to va care, yet we've introduced the invisible hand of adam smith allowing the veteran to choose, and i don't have the ability to move money to care for them. my biggest nightmare is that somebody goes for care and i have money in the wrong pocket. you wouldn't run a business this way. >> well, can you help us -- >> yes, ma'am, i'd love to. i'd love to. >> i would like for you to communicate with the chair and the ranking member who will then work with the leadership -- >> we have talked with both of them, and they're both supportive. >> i think senator cassidy has a great point and you hit it right on the head. i think the challenge is beginning to be, we're the

problem. congress is the problem on this. and the challenge is going to be congress pointing fingers at the secretary saying, you didn't promote the choice act enough and unless we keep that money in there, you won't promote that. the truth is i think he needs the flexibility of transfer both directions, depending on where the veteran's demand is. >> thank you very much, mr. chairman. thank you to all of you for taking so much time with us today. we have probably exhausted the subject of the implementation of the choice pranlogram, but let me add another wrinkle from our experience in connecticut for you to ponder as you're thinking on how to implement this in a way it works. and i agree with the senator been i may have a question on this but you certainly are going to have to prove, right, that you have extended the reach of the choice program to everyone that deserves to be under its umbrella before you're going to get the ability to transfer money.

and so, let me add another wave which they be happen to your laundry list. so when the rule was 40 miles to the crow flies it was meaningless in the state of connecticut, small state, one va. when it moved to 40 miles by way of car travel, that helped. but it ignored one reality in connecticut which is probably not exclusive to connecticut i bet you it plays out in places like chicago and los angeles which is that often the 40-mile car ride brings you into new york city. which is a root that veterans from many parts of connecticut are not going to make, and frankly should not make. but because they are technically 40 miles away from a new york va facility, they don't get access to va choice in their, in their hometown because they technically could get in their car and wait in traffic for three hours to try to get to

manhattan or queens or the bronx. i know this is tough to solve for because what you're essentially trying to figure out is adding the ways in which people commute to the, to the very basic numbers that you've signed based on mile anl. but is this something that you're think abouting in terms of how you make sure that you're bringing as many people into the program as possible? >> yes we're looking into having the flexibility to terminate geographic burden, and that would solve the problem that you're describing.

>> you know notwithstanding the wait times, backlogs, accounting scandals in other vas. we been able to get veterans in pretty much on time to west haven, they've done a phenomenal job there, but it's an old facility. hvac system that needs to be replaced. absolute floi parking, which is a big deal in connecticut. big deal everywhere. so if you don't get the ability to transfer to the extent that they are in va choice elsewhere do you go for these kind of capital volleys? you're just going to have projects that simply aren't going to get done and dollars that are going to go unused potentially if you don't get that transfer authority. >> that's exactly right. we have about 70 plus line items that money is not movable from one to the other. as we talked about the house markup on the construction bill

virtually cut it in half eliminating many of the projects that are very important to us. we don't have an alternative. it's ironic to me that congress passes the laws telling us what benefits we need to execute to get to veterans, we're all for that but if we don't get the money to do. . you know, i can't make the two match. and i think when i look back at what happened in 2014 to the va, before i became secretary i would say it was a total mismatch of demand versus supply. you would not run a business that way. the way that the agency has been run is working to a budget not working to requirements. not working to what customer needs are. so i'm going to change the department, and i'm going to get as much more focussed on veteran needs, but i need the wherewithal to do that i can't print the money myself. and so there's a choice for congress the choice is you know, decide some different benefit profile for the veteran,

or provide the money that's needed for the benefit profile you've already approved. >> hallelujah. long question, but i'll save it for the second round for the record. thank you, mr. chairman. >> yeah just very quickly because i've got to go. i have several questions for the record on billings partnerships for mental health and for cboc i want to thank you for your service and we'll look forward to the response to those, thank you. >> thank you mr. chairman, and secretary, welcome to the committee. and i appreciated the opportunity that we had to visit last week as you kind of walked us through some of the changes, and i was so appreciative that you took the time to visit with katherine, who of course not only an alaska leader, but truly a national leader in innovation and working between systems, federal systems whether it's ihs

and nva, but to really provide for an innovative level of care. i'm excited about this proposal. and plaurm, and ranking member and to our agust vice chair, she didn't hear that. i do think that at some point in time it would be wonderfully instructive for this committee and those of us who are focussed on the va health care benefits for our veterans around the country to understand the very, very innovative models that we are utilizing in alaska where given large spaces and limited facilities, we are figuring out a partnering through systems. working through the ihs, working through our many times our community health centers, and it is providing a level of service to our veterans that is, is immediate, we're breaking down some silos. and working with the secretary

here, i think we can look to some models that may work in rural parts of our country that that will provide the benefits that our veterans have so honor bli earned, but in a way that is good care. i'm always sicker away from home. if i'm back home with family and native people being with their native foods, being in a place that is comfortable it's something i'd like to talk to the committee about further and let you know what we are doing. in that vab, you can also jump in on this. we do have these partnerings that are going on and i think the range of choices is good, we

are still offering range of choices within systems that still have their structure. i worry about moving of records and sharing of data and really making sure that these separate rules within these differing programs don't cause more confusion. and thus limit our veterans in terms of their abilities to access these things. secretary mcdonald can you give me any greater assurances to how we're coming along with a more fully integrated system with this very unique model that we're seeing play out in alaska? >> we have a lot of work to do together to get to a single model that's integrated. let me give you one example. we have five different ways that a veteran can get care in the community. of those five different ways, each one has a different reimbursement profile.

sop when senator tester and i were in montana, and he organized a town hall meeting of providers, doctors hospitals, systems, and so forth, everybody there wanted arch. they loved arnl as a system. well, arch pays medicare plus. choice, pc3 medicare minus. everybody loves arch but they don't love the others. to get to the right integrated system, we need to get all the providers on board to get them all on board, we need to go to one integrated reimbursement system and we're going to put that together and come to you and hopefully get that passed z so that we can have no question as to get the providers on board and the veterans have a place to go outside the va. >> the sooner that can be done, i think it is to the veteran's benefit. >> absolutely. >> the one point i would just add in alaska, what is working well are sharing arrangements with the triable health services. alaska is probably the most

enthusiastic proponent and using of those agreements. so we're thrilled about that the. about $10 million from the va has gone to the service. >> i appreciate that and know that we want to the work with you. ly just make one comment, we had an opportunity to sit down and talk about this, this regional alignment or the realignment, and i have to tell you, i am concerned. because as i look at these, these divisions it seems that we're getting bigger. it looks like the territory that alaska is in is almost identical to what the ninth circuit u.s. court of appeals looks like. and we've been fighting to break that up for a long time. so i'm just sending the the heads up to you that i'm concerned that when you have one region that's covering thousands of miles three different time zones, the concern that the regional offices will be able to

provide for that, that level of care that our veterans expect. i'm sending out the signals. i have several different questions that i would like to ask. we've talked a little bit about how we're focussing on reducing the backlog and i know it's always about numbers, but at the end of the day for the veteran, they want to know have you heard me have you sat with me? what kind of care have you provided me? i know that my caseworkers in my offices back in alaska work hard. and we're not pushing them to, to close out constituent cases boom, boom, boom and we're assessing you in that level. sometimes it's hard, but which we have one great success with our veterans, it makes our staff feel better, like they've really provided a service. i'm concerned that as we focus on we've got to reduce the numbers, we're forgetting the customer service. and as we forget the customer service, we're forgetting not

only the satisfaction to the veteran, but the satisfaction to the va employee. who gets great personal satisfaction in knowing that they have provided a level of care. they have fixed a vet's problem today. and if they can't feel that they're doing that, if they feel that they're just processing numbers, the difficulty in recruiting and retention is going to continue, which means that our backlog is going to continue. >> we agree with you entirely. this is why we're all doing this. it's not because of the stock options you get. you know we're doing this because of the inspirational mission that we have for caring for those who have protected us. >> and we can't ever lose sight of that. >> we can't. it's more than numbers, it's the picture of the gentleman behind you. every one of those we feel it's exactly the reason i gave out my cell phone number during the first national press conference in september, and i take calls every single day from veterans, and i listen to them because

you've got to keep that visceral empathy of what we're trying to do. it's all very personal. >> well thank you for your dedication. thank you, mr. chairman, and i questions that i'll submit to the record. >> thank you mr. chairman. also secretary thank you for being here today. appreciate it. i've visited with you before about legislation that i've put forward, the veterans access to extended care. and it's all about making sure that we can encourage nursing homes to take va reimbursement for veterans by eliminating the small business contract and requirements they're currently under when they take the reimbursement, but they don't have to deal with when they take medicare reimbursement. and you know, that's a burden that really makes no sense for them, and they even have to undergo separate inspections, there's a lot of red tape, compliance issues so that many

won't take that reimbursement. i would just ask you to comment if you would on how you can help advance that legislation so that we can get it in place. >> well we're very much in favor of us. we'd like to talk to everyone who's going to vote and make sure they vote in favor because we think that that's the way to go. we've got to focus on veteran outcomes, veteran customer experiences, and there's just soech red tape that's getting in the bay of it. in the sense our people are trying to work in a system where they are prisoners of the system rather than working on meeting veterans needs. and so we're very much in favor activity legislation you've described and we want to work with you on it. >> thank you mr. secretary, recently at a round table in my state, and many nursing homes were represented there, and they said you know, if we could get this passed, that they would then look at taking the va reimbursement. i think it would be helpful. i appreciate your willing to help. the second is similar, but it

goes to the health care medical care from local providers. and you've touched on it here in a number of your responses, but i'm a co-sponsor, senator moran is the prime sponsor. it's similar, it's a veteran's access to community care. and you've touched on that and some of the cost factors, but essentially the idea is to get veteran's care closer to home when they have to go a long distance to a health center. for example, in my state, we have one va health center. it's a very good health center, covers north dakota and most of western minnesota, and they do a good job but it's a long way, it's an 800 mile round trip from places like williston which is the fastest growing in the country now. maybe over 50,000 i don't know but where they can't get the service, we have geographical

issues here. your thoughts on addressing it in a way that serves our veterans and then makes sense in terms it of dollars and cents to affordability. >> i think job one is to really execute the redefinition of the 40-mile limit and do that as quickly as possible so we can really determine how many people will want to use community care. we really don't know today how many people we to want use community care. we know that the redefinition of 40-mile limit will double the number of veterans who will take advantage of it. that's what we think. we need to find that out. secondly, i want to redefine or reinterpret the geographic burden so that we have more flexibility, i have more flexibility to provide the ability for people to call it a geographic burden and go to community care. and then the third thing we're looking at which we talked earlier is whether or not we looked at whether we define it as a va facility that can

provide that service or va facility that doesn't. opening up that could potentially be extremely costly as i said earlier. it could be $10 billion a yearle to $40 billion a year, of course the whole choice act, this was $10 billion over three years. that's a conversation we'll have to have but we need the numbers. we need experience to drop that algorithm. >> and i think that that is really an important area to figure out how to do this. because, again, if they're within 40 miles of a va health center well then that 40-mile rule. they have to have open heart surgery, sure, then maybe that trip i understand, and so do they, but there's a lot of situations where there are services in between what a cboc

can provide and what a va health center can provide where it actually would be cost effective for the va too because that veteran may have to travel one day, get the service the second day, travel the third day, and you're going to pay for both the travel and the accommodations as well as the service. and in a case of a very senior person, think about the burden of the travel, for a younger person who's working they're now taking three days off work. so it's not only about figuring out how to do this for the veteran, but i think it can be cost effective for the va too if we do it as you say if we figure out the numbers and figure out how to do it. all right. so there's a difference between doing it in a way that makes sense, right? >> okay. >> thanks for your help. and look forward to working with you on it. >> thank you very much mr. chairman, mr. secretary, good to see you again. last year, i introduced legislation to expand the care

giver's support services. the va offers and to finally make the full program available to veterans of all eras. i'm going to be reintroducing that legislation tomorrow. senator collins is my i want to work with you to make sure we strengthen the program and make sure it has the resources it needs to take on an additional work load. i really was happy to see the department requested a significant increase in funding for that program and i've also asked for additional resources for the department to hire more caregiver support coordinators. i want to ask you today, do you know how many more caregiver support coordinators you think you'll need over the next two years to support the current needs, and to take care of new veterans while eras coming into this program. >> i don't know exactly but i do know we are very supportive of the legislation you've written. we think that pre-9/11 caregivers should get the same

benefits post-9/11 get. i spend a lot of time with caregivers myself. they are the unsung heroes of our nation. many of them have to give up their jobs. >> absolutely. >> and many of them have to purposely not take on work and not take on income because then they would fall out of the program. so it is a real conundrum for them and it is life changing for families. we've got to do this and we are eager to take it on and we're eager to hire the people we need. i've been to several college campuses. there are people who want to join the va to do this job. they're really eager to. we'd love to work with you on the legislation. >> if you can let us know what you think you are going to need over the next few years, particularly with the addition of this, i think it is absolutely vital, so thank you. i also wanted to ask you about the spokane va medical center. as you are very aware, the emergency room at the spokane medical center has dramatically cut back its operations because of staffing problems. the medical center has

repeatedly pushed back the date to resume full-time operations, and now i'm being told that isn't going to be until next fall. the spokane va has also recently asked for its surgical complexity rating to be downgraded. i'm really concerned about that request and the potential impact on the access to care for our veterans in that region. last year i asked secretary shinseki and the under secretary whether there were any plans to reduce programs and services at the spokane medical center and they assured me there were not. yet we now see this facility being downgraded. the medical center is not getting the job done, so i want to know what you're going to do to restore emergency services and surgical care for veterans that rely on the spokane va. >> so one of the big challenges that we've had, senator -- we've discussed this previously -- is actually recruiting top-notch -- >> i've been hearing that for ten years. >> yes. well, i'm meeting with the

college of emergency physicians either next week or week after that to try to see if we can help with them. american legion also has some idea about how we might work with some of the hospitals in there. we've also raised the available salaries that we can be paid to people there. ultimately if we can't recruit top-notch talent i think we're going to need to explore some kind of partnership between the spokane facility and local hospitals vis-a-vis emergency care. >> well, look. this has been ongoing forever and it's not being resolved and it is a huge issue for our spokane veterans. so i want to talk with you again, mr. secretary. we've got to get this resolved, however we do it. >> while i know it's been going on forever -- we accept full responsibility for it -- i have been to over a dozen medical schools recruiting doctors. i've been to the osteopathic convention recruiting doctors.

we are the canary in the coal mine. we see the problem that exists in american medicine. we need more primary care doctors, we need more doctors that will live in rural areas and we need more mental health professionals. we're working extremely lard to do that and to find them, identify them and convince them. then give them a monetary incentive to locate there. we're going to continue to work very hard until we get that spokane facility up and running. >> i really appreciate it. one other question. i just have a few seconds left. right now the veterans affairs committee is holding a hearing on va service for women. i want to stress how important it is to prepare for the needs of a growing population of women veterans. i was pleased to work with senator heller to introduce the women's access to quality care act this year. that legislation will go a long way to helping the va provide safe, private health care for women. va already has a serious backlog in construction but it is the number of women veterans increase, as and they age, there is going to be a need for more space dedicated to

gender-specific care. so i wanted to ask you what the va's going to do to meet the treatment space for women veterans over the next ten years. >> some of our budget that was cut dramatically in the house mark-up was slated for women's clinics. we're installing women's clinics in our facilities. we're hiring the gynecologists and other specialties that we need in order to staff those clinics. and to us, this is critically important. 11% of veterans today are women. it is going to go up to 20% by 2017 or so. so we've got to get this done. many of our buildings, as i said earlier, are over 70 years old. >> they don't have private space for women, i assure you. >> and they have single-gender bathrooms.

we've got to get this fixed. that's why our construction budget was as high as it was. >> mr. chairman, i am out of time now. i'll submit the rest of my questions but i really appreciate that. i want to keep working with you on this. >> mr. secretary, let me talk about the hippopotamus smoking a cohiba in the room. where do we go in your view? >> where do we go in terms of -- >> what is your end state for denver? >> our end state for denver is to finish constructing the medical complex. we would use -- >> i would say finish constructing the medical complex under the supervision of the army corp of engineers. >> yes. they're already on the project. and they would complete the project with us. and we plan to use the army corp of engineers in the future for major construction projects. >> i'll make it simple for you. my position is cory gardner's position to make sure you work very closely with senator

gardner. >> we agree. >> thank you. >> in fact, the deputy secretary was out in denver yesterday and has been there i think seven times since he's come in to position. >> let's go with senator baldwin. >> thank you, mr. chairman. hopefully three questions i can get in this second round. i'm sure there will be follow-up, for the record, also. dr. clancy, you were at the field hearing in wisconsin on march 30th. i joined the -- i'm member of the senate homeland security committee that jointly held that with the house veterans affairs committee. it was -- we heard incredibly powerful testimony from family members of veterans who had lost their lives at that facility or after care there, as well as whistle blowers. now several months into this investigation, even at that hearing we were hearing of more deaths that were unexplained

that we hadn't heard before. in fact, i sent you another letter today, not based on testimony at that hearing, but somebody who came up to me after the hearing and said, my husband was treated there and i have concerns related to all of those that you've been hearing testimony about. and so i just want to stress how important it is to have the investigation, sufficiently expanded to review those deaths and i want your assurances that the degree that we can follow up on every one that has been reported during the conduct of your investigation that you will follow those -- follow the evidence where it leads. >> you have my full commitment. absolutely. >> i appreciate that. >> if the senator would yield, let me add i would associate my comments with senator baldwin

because a lot of illinois veterans would use the toma facility. we want to make sure we fix the candy store, it was called -- >> candy land. >> candy land. yeah. >> on the issue of property treatment for pain, secretary mcdonald, not only do we have to increase -- to crack down on individual use of narcotics, we have to better manage. we're here in the appropriations committee so i want to ask you how the va budget request supports the expansion of complimentary and alternative medicine and wellness programs that would help veterans dealing with accuse and chronic pain. >> as we look at va opioid use, which is -- dr. clancy said we track quite closely, it is moving down. the reason it is moving down is i think because we are the largest users of alternative approach in the country. we had tremendous success with acupuncture, with yoga, with electronic stimulation, and we want to continue that. anything we can do to provide a different approach than opioid

use we want to do. and as i've been touring all of our facilities, i think i visited about 125 so far. i'm always inspired by those people teaching yoga. in one location there was an art instructor who was helping use art as a way to allow people to become themselves again without opioid use. equine therapy in placed like bedford, massachusetts. anything we deem to be a