captioning performed by vitac >> -- which i say in a -- with a sense of urgency. my job becomes even more critical as the state itself runs out of funding because we have got to look for ways to leverage what kind of revenue we can project from user fees, toll revenues on the network in the city. and i appreciate being part of this session. i hope -- i hope we are collectively able to deliver the

message where it needs to be delivered, that the time is critical and i look forward to being part of the solution. >> thank you very much, mike, for your comments and your contributions. i'll take it a little bit out of order now and take my law partner and former member of congress, state of georgia, congressman jack kingston to give his perspective on some of the things they're doing down in georgia, particularly in the port project area and he's now with us, with these projects probably had something to do with them back when you were in congress yourself. jack, why don't you go ahead and tell us about what is happening down there. >> thank you very much, senator. i have to take a point of personal privilege that i really came here to lobby jennifer on going ahead and getting a fast lane on 395. i think we all would like to see that happen. and, mike, i want to say my mother actually lives in louisville, colorado, and your toll road is great. >> thank you. >> i've driven it many times.

it is such a great alternative to 36. but as a member of the house, i was on the appropriations committee and served in the house for 25 years. and probably the biggest infrastructure project in the state of georgia right now is the deepening of the savannah river. that project we lived and breathed for 13 years. i'll put that in perspective for a minute. it took $40 million to get four federal agencies to sign off on it. we had hadto have the okay from epa, and from noaa and along with that we had to have state and stake holders and all kinds of people who had an opinion on it. it took forever and yet 300,000 jobs in the state of georgia are involved almost directly with the port. 15,000 businesses. and of the 15,000 businesses that export in our state are import either one, 70% of them

have less than 500 employees. so it is always this thought well, you know, port and export, that's the big folks but that's not the case at all. we had to jump through all kinds of hoops as you can imagine just to get the river five feet deeper. and we were going to 47 feet when general ogle thorp sailed up the river in 1743, it was 12. we have been playing in the mud for 200 years. this was not some new concept. but the global part of this is that during that period of time, china built a port from start to finish that was bigger than the port of savannah. savannah is the fourth largest port in the united states of america. but if we're going to compete in the marketplace internationally, we can't have such a slow tedious really

uncertain working permitting process. the state of georgia was ready had skin in the game. the project, by the way, went from $250 million to over $650 million, but the state was there, dollar for dollar for their share, always ready to kick in. and i think that's important. but now that -- and the point is, of course, to be able to be deep enough to get the panama -- post panama ships, really is what we're focusing on now. panama canal is supposed to be finished 2014 fortunately for us in savannah they got delayed. that helped us. but it is part of the world trade, but the second part of it now that we're in is railroad access, railroad crossings, making sure that there aren't delays, and then of course, truck lanes and so now we have to get back to traditional

surface transportation issues. and that's one of the things that we're working on from a state level, the state of georgia just passed a transportation bill. congressman defazio talked about what virginia had done. georgia is a red state. georgia is a republican governor, republican house republican senate but the state legislature increased the hotel, motel tax $5 a night. pretty big slug if you think about it. but that -- there had to be some funding mechanisms. but beyond that, one of the things i can say, i served in the state legislature and in congress, from a legislator's standpoint, in my opinion, you need to have leadership that we really don't have on a complete level. and by that i mean leadership from the white house to the core. everybody has to pass the baton. what i have seen from the other side, from the voting side of

this issue is you get transportation type people whether they're, you know, directly involved with cars or railroads or highway contractors and so forth, but they tend to call on members of the highway transportation committees. they don't call on somebody from a health care committee. and, yet, health care is very involved in transportation. they don't call on somebody from the agriculture committee but agriculture depends on good roads and transportation as well. one of the things i would say that we as those who support more transportation funding or a better vision, you got to call on all 435 members of the house. because calling on the transportation committee members, and i would say bill shuster is probably my best friend in the house, but they live and breathe it. they're for it. they're going to make it happen. pete defazio and shuster, they'll come up with the program.

they can do it in half a day, but they need 218 votes. unless we're working on the entire congress then it is not going to happen. that would be kind of my report from my little foxhole. and, senator, i appreciate you -- >> thank you very much, jack. a quick question. i know you have to leave. one of the arguments is since the congress eliminated earmarks on special projects and member districts, that's been a really tantamount to having projects that are essential, being authorized and approved. do you think the idea will come back to allowing those type of endeavors by members? >> i think that what happened with the earmark debate is it got out of hand numerically and in substance but what it really is is a member directed project. and traditionally when bud shuster held the gavel, we already mentioned, he would go to the individual member of the house and say what do you need in your district?

you already heard from your mayors and county commissioners and governor and state legislator so you had an idea. there is -- we have some projects, they add up to $25 million. that's not paying for the entire project, but just the federal match that the state was ready to go for. and then he would say well you're not going to get $25 million. what can i get mr. chairman? you can get 20. let me go back and shop it back home. that's where i think a lot of the leadership came from, because suddenly that county commissioner, that city councilman, everybody had a buy-in. and you went back and you were going to vote for the bill but right now, it is sort of an academic thing gets fuzzy. we passed transportation bill. not sure who actually makes the decision, all that money might go to ohio. not to pick on ohio. i'm just saying it might go elsewhere. and that's what a legislator cares about what is going to come back to my district. i do think there needs to be a way to address member priorities as a way of getting -- of

growing the vote. >> when bud shuster was chairman, every highway in pennsylvania became a six-lane highway. thank you very much jack. i'll excuse you. i know you have another thing to get to. i with like to welcome new our next presenter chris -- no, mike. let's do mike. mike sharute. >> i'm going to cede my time. >> we only let you do it once. >> chris guthridge is a project director on infrastructure development. we're delighted to have you here. we look forward to your thoughts. >> thank you very much. ready to introduce scanska a swedish company, 127 years of pedigree. it is one of the world's largest developer and contractor companies. it is a champion for sustainable

infrastructure. it drives the way the company looks at its opportunities. it has 10000 employees in the u.s. and the u.s. is our number one growth market. we're just completing a 2020 five-year business plan cycle, but within the infrastructure development side, we think ten years ahead. and this is a hugely competitive market. lots and lots of international companies. all vying to get the next opportunity. and so, you know, we need to be teaming some two to three years ahead before formal procurements start. you know, we're here to -- we want the opportunity to invest in america's continued growth. but i would also include workforce development. it includes minority supply chain development. because in reality, we cannot

grow the way that we want to unless we can actually create these centers of excellence. but we need a reliable program of projects, both federal, state and local levels. we want an opportunity to be able to show the value that can be created by using innovative procurement and financing means. we want fairness and transparency. you know, don't blame public/private partnerships for short falls in permitting and right away acquisition procedures. we want decisiveness. once you set a path, you know you need to stick to it. and last but not least this is all about execution and it is execution in a timely manner. just to put a personal side to it, when i was the project director for the midtown tunnel when we won the bid for this, 2

billion project, down in hampton roads, a really large construction worker came up to me and gave me a big hug and said thank you for assuring my job for the next five years. that's the reality, the impact on families and, you know their bread winners and so on of unreliable project streams. quickly, sort of talk about the midtown tunnel with which i was very proud to be associated, this is a huge technical undertaking of elizabeth river and hampton roads area of southern virginia. this is a public/private partnership, this cannot be done without one side or the other. this is a 5,100 foot immersed concrete tube tunnel. 11 segments, each of them 16,000 tunnels. it was fabricated up in sparrows

point, baltimore, and then the segments floated down the chesapeake to the elizabeth river. then each segment laid in 100 feet of water, with one inch tolerance. that's the sort of engineering you get with these you know, megaprojects. you can't do projects like this without things like, you know, federal loans. the loan was the key part of the financing for this project. what we see is critical success factors. firstly, joint stake holder management. we learned a lot about stake holders and the representatives. talking about getting the whole house on side. but this is much more than that. this is about getting you know, all the political spectrum and the taxpayers and the users of

these assets, going through educative process. and i would like to applaud what colorado has actually done in terms of the approach that they have had driven by the governor, to actually get public -- critical to these projects. if you don't have a project champion that's the real issue. project champion many of these projects will just flounder. last but not least is just to make the point dbe, you know, disadvantaged business enterprise, i mentioned it earlier on just for the midtime project alone we have some 28 dbes and 124 vendors already on board. a key area of these projects is not just creating and constructing the project but actually bringing up the community around it.

thanks. >> chris, thank you very much for that perspective. next we would like as our presenter dr. oliver mcgee, a good friend of the secretary and slater and served with the secretary in the department of transportation. he's now at howard university and professor there. and will share some thoughts, i think, on technology and positive train control thoughts? >> thank you, secretary slater for having me here. and senator breaux and lott. i want to congratulate squire peyton fox for representing transportation infrastructure week in this fashion. it is so very, very important. transportation in my eyes and many others is about economic choices. it is about moving people, ideas and things as secretary slater oftentimes said. but more importantly i'm a mathematician, engineer and scientist scientist scientist. and so i would like to put things in mathematical formulas.

competitiveness equals risk, uncertainty and growth. and i learned that from a great economic teacher, an absentee teacher, frank knight, at the university of chicago, great book on this subject. and when you look at risk, it is about what we know. and uncertainty is about what we don't know. it is our innovation enterprise. and growth is about jobs. and more importantly, how we remain competitive how we remain competitive in the united states and the world. and when you're looking about -- looking at growth, you have to start thinking about how you're invested in technology. and how do you employ it. positive train control is about taking advanced technology that was developed 45 years ago and implementing it today. we're basically running a 19th century railroad system in the northeast. 50% of positive train control

has been implemented between new york and boston. but only 5% has been implemented between new york and washington d.c. and through the philadelphia corridor. without that employment of technology lives are lost. so oftentimes what i do is i look at what are we looking at and the public understanding of science and technology. and oftentimes that's what science and technology and transportation is all about, understanding transportation in the science and technology realm. there are really seven grand technologies we're trying. one is information technology. you've heard from the folks at its really saying we're trying to acuate information so you engage it. biotechnology is how health issues can incorporate and couple with transportation. we want a healthy transportation

enterprise, but also healthy people engaging healthy transportation. and then there is also advanced wireless and communications. transportation is always about megascale engineering as chris was outlining here, big, large, projects. but transportation is also getting smaller. we are actually doing virtual transportation more often than we are physical transportation. so when we had these wireless communication devices, we're moving people and ideas and things virtually. with telecommuting virtual offices, that's transportation. but it involves wireless communications. microtechnology. microtechnology is about computing transportation computing the choices and decisions that are involved in transportation. researchers are now looking much further, 50 years out, in mental technology, where things get very, very small. and oftentimes what i was sharing with secretary slater is we're going to be looking at

molecular computing. looking at 750 times faster than the high performance commuting we have now. why do we need to compute transportation? because we're trying to figure out the traffic patterns in the northeast corridor for daily flight and now rail systems. the derailment today that we're faced is costing our economy $100 million a day. so do we want to advance in these advance technologies or do we want to lose $100 million a day and get into the business of moving derailed trains off the tracks instead of moving people? cogno technology is looking at advances in brain research. this deals with the human factors. human factors is really what positive train control is about. but when we look at air travel southeast asia is suspected to be the largest growth in air travel by 2050.

but we have close to -- well over 1100 people who have died in airplane crashes in the last year since march 8, 2014, which was the inception of, what? mh-370. still trying to find the aircraft. and also, in other parts of the region, of the world, we are impacted by germanwing airline where we had to look at the psychological factors involved inside what we call a cockpit post 9/11. what is a locked cockpit door and who belongs in it? should we bring the navigator back so we can make sure that when we lock that cockpit door, we have very strong human factors and cogno issues in looking at psychological factors of pilots and personnel inside the aircraft cockpit. and then finally, we need to look at elder technology as in the western society as we get to an older society how do we gauge with moving people ideas

and things, the mobility issues in engagement of transportation. finally, i would like to tap into what we're looking at in the government university and industry partnership that really involves not only developing the advances in transportation of these technologies, which involves a lot of investment, a lot of uncertainty management, but more importantly deals with workforce development. how do we gauge a new supply of scientists and engineers to understand these advances in technology engage them. more importantly as we look at heightened engagements who are actually engaging in transportation, and this will involve training many, many scientists and engineers not only in america but also across the world, particularly when we look at the southeast region. flying, we have to look at pilot shortages, how are we training the pilots for advances in technologies, say, for an airbus or aircraft, which has a glasscock pit. and then how do we look at those

technologies that are developing in the western side of the world and engage with the eastern side of the world when you're basically trying to fly the aircraft. imagine, for example if you were flying an aircraft made in china, and it was largely in a society of mandarin chinese and you're english and trying to flind that fly that aircraft in a digital aircraft aircraft. it is very difficult. that's what we're talking about in the new age of workforce development as we go forward. in closing, i agree with frank knight. i think frank knight would probably say that infrastructure and transportation week is very important. he would say how risky are we taking our risk and how certain are we about our uncertaintys? and how will we grow the transportation enterprise for 2050 and beyond? it is about moving people, ideas and things, physically and virtually. >> thank you very much for those

thoughts and insight. our final presenter will be beverly swain staley, the head and president and ceo of a project right near here that we all visited probably many, many times, the union station redevelopment corporation and here to tell us what they're doing and what they've done. beverly. >> thank you very much. and, again, i want to thank you very much for the privilege of being here today. i always say i have one of the best jobs in the world. i have the privilege now of working on washington union station. and preparing it for what we call the second century project. just a little bit of had history, i'm sure you're familiar with the building and probably the challenges that it presents. but it was about in 1901, thanks to the leadership of the senate, senator mcmillan -- saw the need to revitalize washington, d.c. and we had the mcmillan plan and washington union station was built as an anchor to that plan. in the early 1980s, it had fallen into major disrepair as had rail travel. but, again, fortunately to the

leadership of congress, the usrc was established as a public/private partnership with the goal of reinvigorating and rebuilding that station as a multimodal transportation center and also a commercial center that would revitalize the neighborhoods. and i think we can see 30 years later it certainly achieved those goals. it is now time, however, to go into the next century and once again rebuild and build a new transit oriented development and link the eastern side of the city and the neighborhoods of capitol hill, noma and the downtown. and so two years ago, amtrak announced its vision plan for 2012 and there are a number of partners involved in that plan, including usrc a nonprofit, and two developers as well as the city and other regional entities. so just to briefly give you a vision for that plan, we -- it entails, of course, preserving the historic building, but

completely rebuilding all of the infrastructure behind the facility, new railyard, new -- that infrastructure is 100 years old now and not working very well and certainly not with the northeast corridor needs in order to address the issues and provide for long-term transportation for the next 100 years. so redeveloping the station is critical to amtrak plans critical to actually serving the northeast corridor. washington union station is also the busiest metro station in the system even though it is not a transfer station and serves one line. metro fortunately also has plans to expand the metro services there. we also have a very active bus station there now. we serve over 37 million people a year in washington union station. to give you some comparison i call it the fourth airport largest airport in the region serves less than 25 million people. so it is a very busy place. i'm sure you're all very

familiar, it is bursting at the seams. it is still a great place to be. but we definitely need to take it to the next evolution. so that's what we have been working on. and we are deep into the planning phases. we hope that next year actually amtrak begins construction in the current concourse, though the full buildup, which will take us -- conservatively speaking let's say 20 years, the plan would be to do the inside of the station in the first phase, which we're working on that design now, amtrak would completely rebuild the east side of the railyard and then a private developer will literally build a transit oriented development with hotels, homes offices over top then we would build the west side and again, the developer would then complete the west side. we're essentially not only creating new transportation system in washington, but also creating a new neighborhood, so it is really a very, very exciting project. obviously to do a project like that, it will take a long time and we need a stable source of

funding and certainty of funding. we have preceded however for the past couple of years and into the planning and nepa and early design and the way we have been able to do that because our partners consist of private developers in amtrak public/private, and nonprofit. we literally at the beginning of the year sit down and look at what we want to do and what we need to do to keep the project on schedule and one partner does not know in that fiscal year if they're going to have the money to put up to keep -- to fund the project. fortunately, one of the other partners at the table, including the nonprofit, has been able to say, well, we will front you the money this year, so we can keep the project going. that's how we have been able to get into the planning. obviously that works when we're talking about tens of millions of dollars but we don't have -- no one has the deep pockets when we get into design and we're talking about tens of millions or hundreds of millions of dollars. so within the next couple of years, we're going to be at a

place where we need to know certainty of funding and stable funding. we want this to be and plan for it to be a significant public private partnership. we'll have a number of options to fund it. but we can't ask the private sector to step up and to be there if we can't make the commitments for the public funding. and certainty, they absolutely need certainty. we obviously cannot embark on this project and the large and expensive phases that we have, we certainly can't start to build a railyard and stop building it halfway through. or start to build the development of the concourses for the private sector and stop it halfway through. so i think we have very close to here a great example of why we need -- we need flexibility in funding, we need options for the public sector and the private sector can work together to finance projects as well as stability for funding. so i'm confident, we had the leadership in 1901 and 1981 the vision and creativity, to make sure that washington union station was one of the most

iconic multimodal transportation centers in the world. and i'm sure that we're going to do that again. we definitely need to step up with funding sources, creativity and flexibility. >> beverly, thank you very much for that update on a very important project and thank all of the panelists. let me open item if up if anyone has a question, our panelists, you're welcome to ask. yes, sir. in the back. speak up a little bit. >> sorry. >> i'm old and deaf. >> maybe this is -- >> technology deficit. just speak up. we can hear. >> i'm just curious, this may be a simplistic, but how much of the project is expected to be public funding and how much is it going to come from value

capture or the private side? >> well, we're in -- we just started the master development plan. hired grimshaw and bbb. we're starting the process. we're hoping in the next year to 18 months to have the details. but as i mentioned, we have multiple, i think potential sources of funding. we're currently as a nonprofit funded primarily from parking revenue, for example. as i said, we also have the bus company and bus companies are paying. i think we're going to have multiple areas that we can monetize. but the reason that sort of flexibility is so critical is to be able to bring the different kinds of sources together, and be able to do a financing package and so that's what we're working on now and don't have the answers. and one of the critical pieces is going to know how much money we could expect for the public parts, for example. >> let me throw out a question it seems we always hear how other countries and passenger rail transportation like china and japan and some of the european models are averaging

150 miles an hour on brand-new sleek modern trains and we don't see that in the united states. what are we doing differently in this country? what are they doing differently in these other areas that we might learn from? any thoughts from anybody? chris, maybe your international perspective or anybody? why are they doing it differently from us and is it more successful than what we're doing here in this country? >> i used to commute from oxford oxfordshire into the city of london every day using the great western line. and for those who know the history history, the kingdom bruno actually designed and built that railway. and the whole point about it, you know, this is back in the 19th century, the whole point was it was literally to give you

as smooth a ride as you can take. you run the high speed 125 trains up and down that. the point is, this is technology which, you know, was in existence in the 19th century. there is no reason why -- i mean it is a lot of the investment but, you know there is no question you can create -- >> because of investment over there is from the governmental sources as opposed to the private sector or combination or what? >> this is private -- this is private investment in the railways. >> i take it the private passenger rail system pays for itself with the ridership and those areas? >> you have -- >> sorry? >> you hope. what i would say -- if we were looking at public/private partnerships for improving rail systems in this country particularly, actually, on the heavy transit or sort of light

rail in particular, light rail, the reality is these projects don't pay for themselves from the actual sort of fare box itself. in reality, the actual risk of the revenues itself still sits with the public sector. but you can achieve an enormous amount with both partnership of both public and the private sector. >> obviously one of the problems with amtrak doesn't pay for itself, not anywhere close. jennifer, you have any comments on how we have a virginia project, i-95 and 495 from a public/private partnership. you're a private company but tell -- how are we doing it as far as the funding operations? >> from our perspective, these projects partnerships are successful when you can align commercial objectives with policy objectives. that is a very difficult thing to do. and not suited for every project. we think the case of 95 and 495

we have that alignment where from a policy outcome perspective, you heard me talk about the time savings, the increased transit, the jobs, the economic outcomes that have come from the projects, and from a commercial perspective, we're very pleased that 495 is on solid financial footing and that 95 has come out of the box, you know, in a solid position, so that we can get a term for our shareholders as well. that's what we need in the u.s. and chris can speak to this as well, in our sector, you know, we need more examples in the u.s. of projects that have struck that alignment and been successful and delivered outcomes on both sides. i think those kinds of case studies will give, i hope policymakers, you know, encouragement to try these kinds of public/private partnerships and to be able to move projects forward like we have seen in other markets around the world. >> any questions from the

audience? let me ask one more, maybe to dr. mcgee oliver. you mentioned positive train control, which obviously has been in the news because of the recent derailment in philadelphia area, tragic derailment. and the argument that had you had positive train control, it would have been able to stop a train before the accident. how are other countries doing on ptc? i mean do they have it in place? do you know? are we the only ones lagging behind? can you comment on that? >> sure. positive train control is 45-year-old technology. but we're dealing with trying to turn a train at 50 miles per hour slower than the cars on i-95 parallel to it in a turn that was designed for freight system. so we have to separate the freight rail from the commercial rail. commercial rail is largely a

straight line. and when you look at maglev, it is floating. so it really challenges us as the united states, are we really ready to do megascaled engineering development in a funding model like in map 21, that has 27 increments as we step forward? it is very difficult for private enterprise to anticipate, make investments, risky investments, to partner with the government, that is really taking baby steps and increments for megascale and development like chris is talking about. when you go in a straight line, and you have advances in high speed rail technology then we may not be talking about positive train control but further advances in technologies that i talked about in information systems, and wireless systems and digital and computing technologies that

could put a glass operation system inside a very -- the train system. much like what we see in the aircraft. i had the privilege of traveling from paris to belgium and back and i was on that train. and had a glass of wine and it was -- it never even shook. i said this is better than flying southwest airlines. we look at flying in this country like we're flying on the greyhound. how many people enjoy engaging in an airport these fees got to hold on to your wallet when you get out of the cab in the national airport. everything is feed to death. we're basically -- it is not an enjoyable experience. right now, we're looking at $100 million a day in costs, i always say we will develop the megascale engineering technologies and do this when we're tired of the pain. but more importantly, in a serious matter, this is lives

lost. i think our transportation enterprise is in trouble when it loses seven lives or over 1100 lives like we lost in air travel in the last year. and that's the most in six decades. so i'm always mindful about that. about safety, but at the same time, when we do advances in technology, we get a safer transportation enterprise. secretary slater said safety is our north star in transportation. but as we engineers and scientists develop these new technologies, we have to deploy them so that we can become more safer and keep advancing the transportation enterprise forward, because everything we do today is an economic choice. and every single morning we have to make a choice on the transportation system. and that engages us every day. congress is doing incremental analysis, that's how they bring home the bacon. one of the most discretionary

budgets -- areas in the budget. that's how we say to our constituents, look what i brought home to you, a new bridge, a new parking lot, a new train, a new curve in the highway, another lane in the highway, but that's all incremental analysis. but as contrary to advances in engineering, a megascale project, i will close, when is the last big transportation project we have done in this country? i think i can remember the big dig in boston. that was just about it. and when we do big projects, it engages the public understanding of science and technology. and we have more hope in the transportation system. and that's what infrastructure week is about this week, providing that hope. >> thank you dr. mcgee. i would like to thank our entire panel. chairman shuster left baltimore and is tied up in traffic, appropriately for our transportation conference. but i will thank this panel very much for their presentations and

for all of our audience. let me just bring up secretary -- secretary slater to come up and close the program. thank you. >> and we would like to thank you for the great job you did in moderating the panel. let's give the senator a round of applause. [ applause ] just a couple of points to close out, you should know that coming into this room we actually asked the chairman and the ranking member if we could sit in these chairs. you know, that are a lot more -- they're elevated can you imagine sitting up there and that's the thing, they told us can you imagine? no, you cannot sit up there. you have to sit here. so we're here. a little power thing, but we have enjoyed -- we have enjoyed the experience. let me also say, clearly we have learned some things. i did not know, beverly, that we

have as many passengers moving through union station, 37 million, and more than the number of passengers moving through the largest airport in the region. i mean that's fascinating. i did not know that. and then clearly oliver, as is always the case, helping us to really appreciate the importance of science and math and technology as it relates to transportation. i always like and enjoy our conversations. chris, thank you for letting us know that this is a ripe market. i don't think we always knew that. i don't think we always fully appreciate that. and so thank you for saying that. and then michael, when i look at you and when i look at jen, i think about congressman kingston. did you see what he did? he took care of some personal business, right? he said to jen, he said take care of i 395 and then said to

mike, my mother really appreciates you for that -- i mean, this is our partner at the firm. so he took care of some personal business and we acknowledge that too. and hopefully all of you have taken care of a little personal business as well, because clearly we have got the movers and shakers who can get things done. let me close with this. regina harper mentioned her father. and if i may, just as a point of personal privilege, i would like to mention him as well. his name is bobby harper. and bobby owned ford dealerships and we used to call him bobby harper ford. as you know president clinton served as governor for a number of years and got a chance to appoint bobby harper to the highway commission twice. these are tenured terms. he served 20 years as a member of the arkansas highway and transportation commission. and when i came on board in 1987, he was the chairman.

and one piece of advice i got from one of the members was do you want to be successful on this commission. i said i would love to be. he said all you have to remember is how to count to three. and i said that's interesting. i said, what do you mean? he said, there are five members on this board. it is constitutionally independent. so once we're appointed by the governor, we can basically do whatever we want. and all of the money runs through this commission. he said so if you can get two other members to go along with you, then you can do practically what you want to do you know that is legal and that sort of thing and if we have got the money. and then i had a conversation with bobby harper. and we talked and he said -- he said i represent the richest part of the state. and he said, you are from the

delta. the most economically challenged part of our state. he said i think we should follow the governors advice. and that is we should always try to count to five. that's a lesson in power. and i really think that's what the senators have been talking about as they have been leading these panels. they have been saying, let's go to all of the members, not just those on the committee, but to all of them. let's, as republicans go to democrats and as democrats go to republicans. let's as members of the public sector go to member of the private secretary and as members of the private sector go to members of the public sector. so tell bobby that he gave not only me a good lesson but we have heard that lesson espoused in this meeting today.

and with that, we are adjourned. thank you. [ applause ] >> we're waiting to bring you live coverage of the house veterans affairs subcommittee on health. they're holding a hearing this morning assessing health care staffing at the department of veterans affairs. there is a delay while committee members vote on the house floor. in the meantime, the senate veteran affairs committee met this week to discuss veterans affairs and we'll show you that now until the hearing begins.

>> -- the state senate to order. we have a vote on the floor which should be over in the next ten minutes, ranking member blumenthal, i passed him going in as i was leaving. he's on his way. i'll talk a little bit and tell you what i want you to know about the opening statement. if he's not here, i'll start with the testimony from sloan gibson. if he is here, we'll start with the ranking member. is that fair enough? is that okay? make the note that his staff said that was okay. i hate to get people in trouble. but i want to take a little extra time on this anyway. this is a very important hearing for the va and very important hearing for us. last year culminating with august's passage of the veterans choice bill in the house and senate, the va every morning i got up it was bad news. veterans dying in phoenix problems in raleigh, problems in denver problems in orlando, and answers that were incomplete at best for understandable reasons because an awful lot of the personnel at the va were new. i'm the first person to

recognize that robert mcdonald had just gotten there. i'm the first person to recognize that secretary pettisle left a year earlier and secretary shinseki was gone as well, so there was a transition. in my way of thinking there is no excuse for the plethora of problems the va was having in the transition should have been much better but wasn't. we -- the va demonstrated to me in the last hearing we had on veterans choice that they were finally listening. all i was hearing on the 40 mile rule in terms of where the crow flies or how far the car drives was nothing but stone wall until sloan walked into that hearing and pulled out a new rule to make the number of miles driven be the governing factor which i think everybody on this committee appreciated and agreed with and was happy that they found a way to do it. i believe we are satisfactorily working toward the care you need definition being defined in such a way to make that change which won't happen today, but will happen in the very near future. i want to commend sloan and

mcdonald and others for the work they have done on that. to the vsos in the room, i know some of them don't like the veterans choice bill, because they fear it will be a replacement for the veterans administration. you're not going to replace the veterans administration. it will always be there. but you can empower the veterans administration, you can empower the veteran by saying they have access to world class care in a close proximity to where they live, and in an affordable amount and in a manageable amount, whether from the private sector or from the government. in fact if anything this is going to sound harsh, but it should sound harsh, the va demonstrated it can build a hospital by running over 100%, 200%, 300% or 400%. every time we can have private sector help given to veterans without having to build a hospital to put the people in is saving the va money, saving the united states money and giving the veterans far better services. so what we need is a partnership between the private sector and the veterans administration to deliver the ultimate goal to see to it that the veterans get

world class health care and they get it in a timely way. that is my only goal. however we do that the most important way to do it is to get it done. i think veterans choice is the way to do it. we had some bumps in the first i think -- november 1st is when it was rolled out. we had some bumps. i met with private contractors and i appreciate those meetings and their confidence in the job they can do. i appreciate the fact that va is now cooperating, i think, in ways that it may not have been cooperating before. see to it that the two are working seamlessly. if they can't work seamlessly, it will never work. the private contractors have to understand their contracts are not just subject to their performance for the veteran but also their willingness to work cooperatively with the va and the va needs to understand that the veterans health care drives the decision and nothing else. there are some in va health care who don't like the nonva health care provisions anyway. i understand that. they have to get used to it. we're going to make this thing work. we're not going to put a square peg in a round hole.

we're going to match the round peg with the round hole and make this work for our veterans. today's hearing is important. understanding that as we talk today, remember the first person we're here to serve is ourremember, the first person that we're here to serve is our veteran. we can expect no less to make sure they get the world-class health care. with that said, i'll turn it over to ranking member blumenthal. >> thank you to each of you for being here today. we went through a terrible tragedy and debacle not long ago that prompted the veterans access choice and accountability act which sought to relieve some of the problems and underlying issues including deceit and fraud that caused delays and misreporting within the va

system. the discussion today is centered on the remaining flaws and failings in the va health care program, particularly the veterans choice program. and as much as this program was established to deal with the immediate crisis of access to care in the short term with an investment of $10 billion to provide direct care services in the community and $5 billion to provide the choice program there is still a lot to be done. the program was just a down payment, just a first step. and i believe that it has to be improved even further. there remains, for example underutilization of the choice program. the reasons for it have yet to

be determined or discovered. the underutilization may be a result of a failure to publicize or make aware veterans. it may be the result of other more fundamental issues within the program. and i share the chairman's view that changing the 40-mile rule was certainly a welcome step. the most important fact that brings us here today and we can't lose sight of it is we have still not solved the crisis that led to this problem. veterans still wait too long for appointments. health care delayed is health care denied for veterans that suffer from health care conditions that require immediate treatment.

the most recent data of may 1st indicates that wait lists have increased. 377,300 veterans had appointments scheduled in more than 30 days. as of the may 1st release, that number jumped by approximately 56,000 to nearly 434,000. anybody who believes that this crisis has been solved is living in an alternate universe. it's not the universe that our veterans inhabit. these delays have real-life consequences. they cannot be tolerated. too many veterans are still waiting too long for appointments and i'm glad that the va is finally going out to the facilities with long wait times trying to determine why

exactly they are not utilizing non-va care items. every time there's an additional change to the 40-mile criteria, the 10 billion allocated for the choice program will be devoted to paying for access. this money is due to our vas. we still do not have accountability for the delays. we still have no reports on action and i mean disciplinary action for the delays that were intolerable. accountability is absolutely necessary and i believe the inspector general needs more

resources to effectively that will send a message to the health care apparatus and professionals in the va that we really mean what we say when accountability is our watch word. thank you, mr. chairman. >> thank you, senator blumenthal. i want to thank mr. sloan for his willingness to take on tough situations and i appreciate the fact he's approaching it in a positive way. we have a few more tough ones coming up.

i'm appreciative of the cooperation. just to reiterate for those present, including the press secretary mcdonald and undersecretary gibson invited the ranking member and myself to the va for what they call a stand-up, which we did in february. we were invited to come back in june. it's for the entire committee if they want to go. as many members can go and they can see the way in which the va is benchmarking itself against itself, so to speak, to try and find better ways to do things and flush out the problems in advance and get them solved earlier and we're looking forward to doing that and we've got big problems to solve in the next few months which will be a testimony or a test. i appreciate you being here to help mr. sloan. we appreciate you being here very much. our private providers mr.

mcintyre i appreciate the help that you gave me and we look forward to hearing first from sloan gibson. >> thank you mr. chairman. ranking member blumenthal and the committee, we're committed to making the choice program work and to providing veterans accessible quality care using care in the community whenever necessary. i'll talk shortly about what we're doing and the help that we need from congress to make all of that happen. first, i want to talk very briefly about access to care. most mornings at 9:00 a.m., for the last year, senior leaders from across the department gathered to focus on improving veterans access to care. we've concentrated on key drivers of access, including increasing medical center staffing by 11,000 adding space, boosting care during extended hours and weekends by 10% and increasing staff productivity. the result 2.5 million more

completed appointments inside va this year than last. relative value units a common measure of care delivered that measured care delivered across the industry are also up 9%. another focus area for us inimproving access has been increasing the use of care in the community. in 2014, va issued 2.1 million authorizations for care in the community which resulted in more than 16 million appointments completed. year to date in 2015 authorizations are up 44%, which will result in millions of appointments for community care. veterans are responding to this improved access. more are enrolling for care at va among those who are enrolled, more are actually using va for care and those using va are increasing their reliance on va

care. this is especially the case where we've been investing most heavily due to long wait times. in phoenix for example where we've added hundreds of additional staff we've increased completed appointments 20% this year. i should also note that we have increased care in the community 127% in phoenix over the last year largely due to the extraordinary effort of tri-west in that particular community. but wait times aren't down. the wait times are not down because of the surge of veterans coming in for care and the veterans that are there asking for more care from the va. in las vegas, we have a 17% increase of veterans receiving care since we opened the new medical center there less than two years ago. in denver, we've added more than 500 additional staff. veterans are using va for care there and are up 9%.

in fayetteville north carolina, wait times continue to be a problem and we've increased appointments 13%, relative value up 19% and veterans using care are up 10%. in all of these locations, we've had dramatic increase in care in the community. as secretary mcdonald has testified, the primary increase for demand are an aging veteran demand and the rise in disability and, as we can see here improving access to care. as i mentioned at the outset, community care is criminal for improving access. we use it and have for years in programs other than choice. in 2014 that rose to $8.5 billion and we estimate that at the current rate of growth, va will spend $9.9 billion

including choice a 25% increase in care in the community in just two years. at the same time we've had a large increase in care in the community. choice hasn't worked as intended. here are some things we're doing to fix it. on april 24th we changed the measure from straight line to driving distance using the fastest route. this roughly doubles the number of veterans eligible for the 40-mile program under choice. but there is much more to do. we've just launched a major change in internal processes to make choice the default option for care in the community. additional staff training and communication, extensive provider communications, improvement to the website and ramped up social networking new mechanisms to gather timely feedback directly from both veterans and front-line staff.

these are all already in place or about to launch. in the longer term we must rationalize community care into a single channel. the different programs about different rules and reimbursement rates, methods of payment and funding routes are too complicated for veterans, for providers and for va employees who coordinate care. i'm confident we will need your help on that. next, let me touch on the other 40-mile issue. we've completed in-depth analysis with data to estimate the cost of legislative change to provide choice to all veterans more than 40 miles from where they can get the care they need. we've shared that analysis with some members of the committee, with staff and with the cbo. it confirms the extraordinary cost that had been estimated previously. we've also briefed the staff on a broad range of other options

and believe there are one or more options worthy of discussion and careful consideration. while we are working together on an intermediate term solution, to expand the hardship beyond just geographic barriers. this authority would allow us to mitigate the distance and hardships for many veterans. we request greater flexibility among some requirements that preclude us from using choice for dentistry and long-term care. as described above, we accelerated access to care in the community this year, anticipating that a substantial portion would be funded through choice. for various reasons, most touched on previously, we will be unable to sustain that pace without greater program flexibility and flexibility to utilize at least some portion of choice program funds to cover

the cost of other care in the community. we are requesting some measure of funding flexibility to support this care for veterans. on may 1st va sent to congress a legislative proposal providing major improvements to use provider agreements for the purchase of community care. we request your support. lastly, we are requesting flexibility in one other area of veteran care, hepatitis c treatment. you are all familiar with the impact of this new generation of drugs. veterans that have been hep c positive for years have a cure in reach with minimal side effects. because of the newness of these drugs, there was nothing in the budget or appropriation. we moved $688 million from care in the community anticipating the shift in cost to choice to fund treatment for veterans with these new drugs.

it was the right thing to do but it wasn't enough. we're requesting to make this cure available to veterans between now and the end of the fiscal year. so, we are improving access to care notwithstanding the reported wait times that you see. that means we still have work to do on wait times but we are improving access to care. we're committed to making choice work and have very specific actions to do just that and we need some help, especially additional flexibility to allow us to meet the health care needs of our veterans. we look forward to your questions. >> mr. chairman, ranking member blumenthal and members of the distinguished committee, i'm grateful for the opportunity to appear before you this afternoon on behalf of our companies' employees and nonprofit owners

to discuss tri-west work in support of the department of veterans affairs. i would like to focus my oral testimony on three topics. the realities of this program's implementation the process of identifying gaps and those that remain to be resolved and what i believe to be possible going forward. mr. chairman before the veterans choice program, there was pc-3. as you know and as secretary gibson has said purchasing care in the community from community providers has been a long practice of the va. in fact, in september of 2013 after two years of planning va sought to change that with the awarding of the patient center community care contracts that we and health net. that contract was denied to have a consolidated, integrated delivery system built in the community to under gerd the va facilities in the pacific that

we're privileged to serve. and make sure at the end of the day that we weren't there to replace the va we were there to supplement it. in fact, it worked as intended. when the furnace lit off in our hometown of phoenix, arizona, 6300 providers leaned forward at the site of the va medical center to assist in the backlog and by august, 14,000 veterans had moved through that process. around the same time, we got a modification to add primary care to those contracts. and within 90 days we stood up a network of primary care providers. we now have over 100,000 providers across 28 states in the pacific under contract along with 4500 facilities and we're not finished. the reason we're not finished is we need to make sure that the networks are tailored to match the demand that exists in a particular market that is not able to be met by the va facilities itself.

the fact of the matter is, that was a complicated program to set up. it was done under very short order but it was training if you will, for what was to come next. because on november 5th after 30 days of work, we were to stand up in support of va the choice program. we had to partner with va to receive a list of all eligible veterans. we had to design and produce a card and put it out with a personalized letter from the secretary. and we had to stand up a contact center to handle all of the calls coming in. after two weeks of design and two weeks of hiring and training of 850 people. no one went into three-hour waits, the phones were answered but the work had only begun. and we've been on a pathway since to try and mature the operations. the secretary talked about the 40-mile issue. there's additional refinements that may well be needed and desired in that area and, if so we stand prepared to support

what those might look like. there's some other changes that may well be needed to the program as we go forward. secondly, we need to aggressively identify and resolve our gaps and fix our operational performance and we're in the process of doing that together. we're modernizing our i.t. systems after a 24/7 build, a new portal system that will serve all of the facilities and our own staff as we seek to move the veteran information back and forth between the two facilities as care is rendered downtown. and we're in the process of tailoring networks to match the demand that exists in each market across our area. the choice program is up it's operational and there's refinement still needed. i believe that because of the collaborative work that's been under way between all of us that are engaged in this that we are refining the pieces that need to be refined and the policy gap

that we need to work and those that the secretary said are getting attended to. i think there are a couple of policy issues though, that remain the jurisdiction of this particular committee. one is, i would encourage a relook at the 60-day authorization limitation that's been applied. secondly, i would respectively submit that there needs to be harmon nye zags between the two programs and between all of the facets of how the va buys its care currently and how the va operates in order to make this work right. at the end of the day, i believe the art of the possible which you sought, is truly within our grasp. i'd like to point to dallas, texas, where under the engaged leadership of the 17 director a couple of weeks ago, we sat with

the medical director and the entire staff there, including behavioral staff, and looked at the full demand that exists for veterans in that market. we then took out and looked at what's the network that is constructed to stand at its side, which is the base on which choice rides. so, in other words, if there's not a network provider, you can set up an engagement with an individual provider to deliver services under choice. we then designed a network map that we're now in the process of constructing together and over the next 90 days from behavioral health to primary care to specialty care we will rack and stack the network to meet the demands that otherwise cannot be met by the va medical center in dallas. that is being repeated across our entire 28-state area in the pacific as we seek to do our part to ensure the operations of choice. it's a privilege to serve in

support of those that serve this country. it's an honor to serve the veterans from the states represented by half of the members of this committee. and mr. chairman i look forward to taking questions after my colleague, donna hoffmeier is finished with her remarks. >> thank you. miss hoffmeier? >> i appreciate the honor to testify on behalf of the veterans program. health net we are dedicated to ensuring our nation's veterans from prompt access to needed health care services and believe there is great potential for the choice program to deliver timely coordinated and convenient care to veterans. in september 2013, health net was awarded a contract for three

of the pc 3 regions. completing implementation at the beginning of april 2014. then, in october after congress passed and the president signed the veterans access choice and accountability act of 2014, va amended our pc 3 contract to include several components of the choice program. with less than a month to implement choice, as dave just mentioned, we literally hit the decks running. i'm a navy veteran to use a navy phrase, and we haven't slowed down yet. to meet the deadline, we worked closely with the va and tri-west for the implementation schedule and timelines. we hired and trained staff quickly and reconfigured our systems for the new program. despite this very aggressive implementation schedule, on november 5th veterans started to receive their choice cards

and they were able to call into the toll free choice number to speak directly with a customer service representative about their questions on the choice program or to request an appointment for services. having said that, there certainly have been challenges that have resulted in veteran frustration as well as frustration on the part of va and, to be honest even our own staff, including call center and appointing staff. with such an aggressive implementation schedule there was little time to make system changes. we literally had less than a week from the date we signed a contract modification with veterans to the actual go live date. while the collaboration with the va since the start of the choice program has been good there is still considerable work that needs to be done to reach a state of stability where the program is operating smoothly and the veteran experience is consistent and gratifying. we appreciate the opportunity and offer our thoughts in the future of the choice program.

the choice program is a new program that was implemented in record time. as a result, there are a number of policy and process decisions and issues that are either unresolved or undocumented. if choice is to succeed, these items must be addressed quickly. as i mentioned earlier, we've been working very closely with the va to address these issues. many of the items simply could not have been anticipated before the start of the choice program. others, however should have been addressed before the program started but the implementation timeline did not provided a quitadequate time to do so. the issues and concerns have been occurring very quickly. as a result, we've struggled to keep up with developments and adequately train our staff with the most up-to-date and accurate information. this information is not ideal. based on these dineynamics, we have a recommendation for moving

choice forward. we recommend va develop a comprehensive strategy for choice that clearly defines the program requirements, the process flows and rules of engagement. the strategy should provide a clear road map for all of us to follow. one that is communicated to all of the stakeholders. va leadership, both contractors congress and, most importantly, the veterans. while the strategy needs to identify key initiatives and reasonable timelines for implementing those initiatives, it needs to contain the flexibility to address issues as they arise and make necessary course corrections. the strategy must include resolution of outstanding policy and process issues, development of policy and operational guides that are mandated across the program, comprehensive training of both va and contract staff, using consistent process flows operational guides and scripting.

and a clear and responsive process for resolving legitimate issues and challenges. in closing i'd like to thank the committee for ensuring our nation's veterans have help to the needed services. we believe there is great potential to help va deliver appropriate and coordinated convenient care to veterans. we are committed to collaborating with va to ensure the choice program succeeds. working together with the leadership of this committee, we're confident that choice will deliver on our obligation to this country's veterans. thank you. i look forward to your questions. >> well, thank you all very much and i had all of these preplanned questions and in listening to your testimony, i've canceled all of them and raise the ones that you started in your testimony starting with you, mr. mcintyre. you were encouraging to put in an authorization of what? >> i would look at the limitation on 60 days for authorized care under choice. it puts people who have cancer

in a position where we feed to move them back and forth between the va medical center. it takes a person who might be with us under choice because of a pregnancy and does the same. and i don't think that was intended. i think it was intentional that there were parameters drafted around it but the notion that certain types of care would have to move back and forth between the va medical center and downtown is neither efficient or effective in the delivery of care. >> all right. i don't want to spend too much time on this but this is very important, i think, from listening to your testimony and watching everybody's head bob. you want to expand the 60-day authorization to a longer period of time? >> i think i would leave it to the clinicians -- >> okay. you won't get off with that. >> okay. i got it sir. what i would do is evaluate which types of care are there needed authorizations that would last more than 60 days. >> so what you're saying is the

60-day authorization requires things like cancer treatments, a pregnancy and things like that for the patient to have to go back and forth between private and va health care because of the 60-day? >> reporter: the process requires us to go back and forth in support of that veteran when it's unnecessary. >> it's like medicare and two nights in the hospital. it's one of those unintended consequences. >> yes, sir. >> is there any reason we can't fix that? >> we're going to work on it and come back to you with a proposal. >> just listening to it it seems like it would be more cost effective to the va to fix it rather than go back and forth because there's got to be money involved every time you're doing that. is that right? >> yes, sir. there is a fee that's paid for each authorization but the bigger concern is the potential disruption to the veteran. >> so efficiently is always less expensive and that's more efficient, it seems like to me. >> yes. >> i appreciate you raising that

in your testimony. >> yes. >> miss hoff meyer, do you have any credit cards? >> you have a right to remain silent. >> i'm trying to think which ones do i acknowledge? yes, sir, doi. >> do you ever get the required mailing, the four pages long and print is so small and you don't read it anyway? >> i think that goes right in the recycle bin, mr. chairman. >> okay. in your testimony i heard from you a clear statement that we need to simplify and coordinate the rules and processes under which veterans choice works. is that right? >> it is mr. chairman. >> go ahead. >> i just think -- as i said in both my written statement and opening remarks, everything has been moving very, very quickly. as a result, there are a number of things that maybe haven't been addressed as completely as ideally we would all like to see. it makes it really difficult. it's hard for us, you know, we

talk about this at our level to keep up with everything. you're talking about call center representatives and appointing clerks trying to keep up with all of the developments and somehow we have to find a way to make it easy for not us to understand but the people that are working closely with veterans to make it work. >> i think the veteran needs to have a -- all of the stuff that i did as a businessman, we wrote everything to an eighth grade level, which is what the newspapers do as well because that's the way you can communicate to the majority of the american people. some of these things i read on drug notices, the regular drugs the real ones, prescriptions, you read all of these things that you're not supposed to do or look out for, it's so long and cumbersome i don't do the

right thing sometimes. i think that could be our veterans as well. i would hope that what all of you would do is find ways to simplify the process to the veteran and the provider, the local proceeder in veterans choice. i know it's complicated. i'm not trying to oversimplify but sometimes out of a fear or desire to make sure we covered everything, we cover so much that we don't accomplish the goal. my last question is going to be for sloan until we come back for a second round, if we do. you kept talking about wanting us to give you more flexibility. >> yes, sir. >> put some meat on that bone. flexibility on what? >> i would say at the very top of the list is flexibility around the determination of hardship for veterans to have access to choice care. and so the way the law is written today it's restricted

to geographic barriers i think is the right -- the language that is in the bill. we want to open that ap pa tur that would give us more flexibility. >> open that ap pa tur to be a type of illness? >> it could be a type of illness, it could be distance, an instance where a veteran lives within 40 miles of a va facility that doesn't deliver the care and we want to deliver the care into the community. >> in other words -- i'm going to interrupt you and i a apologize. you want the ability to exercise judgment. >> yes, sir. >> in terms of judgment? >> yes. >> in terms of the 60-day authorization, is that right? >> yes, sir. >> there ought to be ways that we can accomplish both of those things and in raising those -- he's excited about that answer or he needs to leave, one or the other, whatever the case is, you can help us write that because i think those are both determinations we ought to be

able to do. i recognize in your flexibility on the 60-day authorization sounds more cost effective and less expensive and yours raises cost questions but in the end, again, we've got to remember the person that we want to serve is the veteran and deny them service because of a hardship is not the right thing to do. >> yes. >> ranking member blumenthal. >> thank you mr. chairman. at the outset let me say that you will be asked shortly by senator sanders i believe, about the letter that he's written to secretary mcdonald that he use his authority as secretary of veterans affairs to break patents on hepatitis c medications for the treatment of veterans suffering from that disease. i would strongly urge that you consider using your authority under 28 united states code section 1498 to take that action

that will make this medication more widely available to veterans, especially since the va was involved through one of its that undertook this to fund construction costs at the denver facility specifically the $1 billion cost overruns out of the choice programs provisions for long deferred maintenance and capacity issues in the va system. these funds were very specifically designated and intended by congress to improve veterans health care. veterans in my state who are aware of this proposal are absolutely

absolutely absolutely outraged that the care at the west haven facility would be indefinitely referred because of cost overruns in aurora colorado. i expect the same reaction will be felt equally deeply by veterans at the more than 220 other facilities whose health care will be compromised as a result of the proposed redesignation of these funds. so i would like to have assurance from you secretary gibson, since we're talking here about choice program fund and we're talking about not just a few dollars here or there but actually one-fifth of all of the funds in that $1 billion pot that you are considering alternatives to that action.

>> senator we've sent a letter earlier today to this committee, to the house committee and to the appropriations committee requesting the increase in the authorization to be able to complete that facility as well as requesting the use of $730 million of those 5 billion to be used to complete the denver facility. we have identified $100 billion from -- >> i apologize for me that alternative is a nonstarter. it's just unacceptable. i've expressed that view to appropriate administration officials. i realize that you're dealing the hand that you were dealt. i'm simply urging you to consider alternatives. there are alternatives, in my view, responsible and available alternatives that do not involve deferring health care

improvements through construction and maintenance at those facilities across the country, whether in connecticut or georgia or montana or louisiana or vermont and all the other states represented on this committee, as well as many who are not. >> senator in years past i would tell you it's very likely if va had gone looking for that kind of money there's a pretty good chance that we would have found it. but because of the work that we've been doing over the past year to accelerate care, to make hepatitis c care under the circumstances, we don't have $700 million sitting on the sideline. there are no easy answers here. >> i'm not asking you to find $1 billion sitting on the sideline but this nation is capable of doing better for its veterans. and a supplemental appropriation, for example, might be an alternative. i'm asking you to go back to the

drawing board and use different pencils. not necessarily sharpened pencils but different alternatives to compensate for the absolutely unacceptable cost overruns and delays in aurora. the project should be completed but not at the sacrifice of health care for other veterans around the country and whenat i say to you is not personal to you or to secretary mcdonald and we have talked at great length about this issue. we have visited that facility together along with the chairman and i have seen that vast shelf a campus that is a mockery of government contracting.

so we need to address the situation to complete the project but it cannot be done, in effect, at the sacrifice of other veterans. my time has expired. i apologize for interrupting you and thank the witnesses for being here today. >> i won't ordinarily do this but in light of the question raised and for the benefit of everybody at the committee to know -- and i don't want this to limit it, but we have an obligation amongst ourselves to make out of the box suggestions about the cost overruns in denver, particularly those of us have that have been there and seen it. i've taken a couple of actions which i will share with the committee leading up to a et moo meeting tomorrow to say what are we going to do with this which i hope that the va people are saying what are we going to do with this, too, not just there's nothing that we can do. i've ordered a surplus of property that would be

liquidatable to raise money to go to veterans choice to offset what might be borrowed from it. you're dealing with a situation where you've got until may the 20th about as much time as we've got right now and get to july 15th. we have a way to do that. it's going to take an action of this committee but that gives us time to determine how close to 100 million we need to work to get that. in the time period, we're going to have interim bridges to i'm going to present to the committee tomorrow. if everybody on the committee would think outside the box, if it was your problem, if you were in sloan gibson's place and inherited a shortfall in an agency second biggest than the government, where would you go being looking? i want sloan to look where i mentioned in denver. if we take you out of the construction business, which we are, and that's going to happen at least to a major and certain extent, there are going to be savings within that

appropriations department and also look at the ftes that you're looking for an increase in the budget, maybe those ftes are not as necessary as building that hospital in denver. i think if everybody is making a contribution like that, it's like that movie the american president when the guy became a president as a fill-in, they got a yellow pad out and worked on the solutions. we need to get out the yellow pad and start working on solutions. just saying we're going to borrow it from the veterans health care benefit, i agree with mr. blumenthal, that's not the way to do t i apologize for injecting that. but -- >> i want to thank the chairman because he and i have woulded together. i am not speaking for the chairman obviously, but i have some alternative suggestions as well. i have no pride of authorship, i don't think anybody does, of meeting the needs of completing that facility but doing it without sacrificing these other

projects and i'll have ideas and proposals tomorrow. >> my apollogies to the members of the committee and now i turn to senator moran. >> thank you for your comments and conducting this hearing. welcome to the committee, secretary and others. i hope to answer a series of questions but the time on the clock will run quickly. i want to start with a story that i've told before about a vietnam veteran named larry. he lives in florida and he's a vietnam veteran a swift boat veteran. indicates while in florida he received excellent care from the va moved to rural kansas, became my constituent lives about 25 miles from the sea bock and 20 miles from the hospital. i started this story or this story began in july 2014 when

larry, this vietnam veteran, needed a cortisone shot. the va's instructions were to come to wichita. so a three-hour drive each way to get a cortisone shot. we raised this issue with secretary mcdonald at a hearing here on september the 9th. larry contacted it us and said i don't care how it comes the choice act or any way that the va can provide this service. we raised this topic with the secretary in september of last year. then, in -- shortly thereafter the director took this issue to heart and at least solved the problem but unfortunately temporarily. in december, larry was granted an appointment in hayes. the sea book that doesn't offer cortisone shots but he got it in september of last year. the doctor who treated him who

provided the colon os skop pea wanted to follow up and va denied that and sent him back to wichita. they denied that request because he was not eligible for choice. it exists within 40 miles of his home. he's back to wichita, ultimately he needed to -- instead of a cortisone shot, a colonoscopy. he is trapped in this system of no one telling him what he can do except that he doesn't qualify for choice go to wichita. just last week he received a letter from va approving him for choice. he then calls tri-west and tri-west says you're not eligible. we don't have you on this list. but i got this letter. he indicates that he talked to

four different operators at tri-west all who gave him a different answer than anyone else than the three other operators. he called the 866 number and was told he wasn't eligible got the four different answers and now we're back to the question, what happens to larry? and my point here is why not it be larry's problem for what happens to larry but even if he's not eligible for choice or today because it's there and doesn't provide the colonoscopy or the courtrtisone shot why is someone not saying oh we have these other authorities, this would work for you, as compared to leaving larry hanging and whether he's eligible and what he should do. how should we solve that problem problem? i don't think it's totally unique. i hope it is but i don't think larry is the only veteran that

experiences this. >> i doubt that the problem is unique. i bet that other veterans are having similar experiences. as i described in my opening statement, we are asking for additional flexibility which would give us more authority to be able to handle that situation inside choice. we actually handle many of those situations through other va care in the community routinely, which is why we have incurred so much expense but we find ourselves running out of resources in order to be able to sustain that. and so we wind up making suboptimal decisions. you've just given two great examples. chairman asked earlier about whether or not we would be using judgment around the nature of the procedure. the answer is yes. i would tell you, for someone who has a routine requirement

like a cortisone shot, there's no reason to travel 150 miles to do that. that's something we ought to be getting done locally. for a veteran that has to get a colonoscopy, i'm not going to travel 100 miles. now, if a veteran needed a knee re replacement, i might say, under the circumstances, make the trip. but the therapy that has to follow up after that, i don't want the veteran having to travel 150 miles each time he has to go to physical therapy. the challenge that we have is 40 miles to get care, we keep running the numbers and the tab is horrendous. it's huge. what we've got to do is find a way to be able to manage this in such a way that we're doing the right thing for veterans and we're being the best stewards of the taxpayer dollar. >> we've had a number of discussions on this topic and today i would argue given the

chance but i won't argue today about whether or not how the 40 miles should be interpreted. my point on this episode, one, is the uncertainty and the burden lying in the frong place. it ought to lie with the va or tri-west, not the veteran. my second point is, if you have these other authorities, whether or not larry qualifies for the choice act, ought not matter in the answer he gets. >> i agree completely. >> thank you. >> senator manchin has -- senator manchin has kindly yielded to me because i've got to run out the door. and to the gentleman that has to run out the door, senator sanders. >> thank you for your work that you've been doing and maintaining the bipartisan spirit of this committee. congratulations for all you're doing. >> thank you. >> i want to make two points. first of all, i want to thank sloan gibson and his boss bob

mcdonald for the impressive work that you are doing. i understand how easy it is to beat up on the va. running 151 medical centers, 900 cbocs. in a nation that has a dysfunctional health care system, the private sector also has one or two problems. i won't go into them but i think we should recognize when you talk to the major veterans organizations, the american legion, the vfw, you know what they say? you've heard this mr. chairman. when people walk into va, the quality of care is pretty good and i want to thank you for trying to improve that care. i will fight vigorously for those who want to try to privatize the va or dismember the va. i think our goal of trying to use the program that we have developed so the people can get care in the community locally has a good mention but i will

oppose to trying to privatize the va which is serving our veterans so very well. i want to get to another issue and senator blumenthal touched on it today. i wrote a letter to secretary mcdonald about an issue that has concerned me for a while and that is the high cost of the drug sovaldi, which is a very -- a miracle drug, so to speak, which is now treating the veterans of our country who have very high rates of hepatitis c. mr. chairman, to me, it is an outrage that you have a company whose profits have soared in the last few years. their revenues have doubled, i believe, in the last year. they've come up with the drug. they are charging the general public $1,000 a pill for that drug. they are charges, i believe -- i don't know if this is a great secret but i will tell it

anyhow, something like $540, is that right? no comment. all right. but that's because the va negotiates drug prices. but you're running out of money. now, we have several hundred thousand veterans suffering with hepatitis c which can be a fatal disease and you don't have money to treat them and, frankly, i think it's time to talk to the manufacturer of this drug and ask them if they are being very generous in providing these drugs, hepatitis c drugs, for free. very generous. for whatever reasons they are doing that. but maybe at a time when their profits are soaring maybe they might want to respect the veterans of this country who might die or become much sicker because they don't have access to this wonderful product. and as senator blumenthal mentioned, if they are not prepared to come to the table -- you think you've done well by getting the prices down by half,

i'm not impressed. paying 540 bucks per pill for people who defended our country. you sit down with them and say you're prepared to use 28 usc 1498 to break the patterns on these drugs unless they are prepared to come down significantly lower than they are right now. it's not a question of taking money. i know you've requested to take money out of the choice program. maybe that's a good idea. but it's a better idea to have them treat the veterans of this country with respect and charge the va a reasonable price rather than ripping off the va as they currently are. with that i would yield. >> turn that clock on and start talking, if you would. we have senator round followed by manchin and tester. mr. rounds? >> thank you mr. senator. i appreciate your work and the

ranking member's work on the hospital in aurora. i agree it shouldn't come out of the program as the alternative. mr. gibson, i was looking back at the notes i've taken here and you gave some very encouraging notes with regard to some of the stats about some of the areas of the country with regard to additional care being provided. and that's encouraging. i'm just curious, do you believe the stats are consistent across the country? are you finding evidence of that across -- >> actually that's -- i always worry when people quote averages to me and what you find is wide disparity across the country in terms of the length of wait times and, therefore, in terms of the specific areas where we're making the most intensive investments. so what i would tell you is, where we have been making

investments, you see improvement in access measured by appointments and relative value units. but what we are not seeing pretty consistently is a material improvement in wait times. and so you look behind that and you realize that what is happening is, as we improve access to care, either more veterans are coming or veterans that are already there are making additional utilization of va care. >> i'm just curious. it almost sounds like we have a -- i think senator sanders suggested this in a way. i think we have to have the discussion about how we deliver care long term for our veterans. and i guess i come back to it. i'd love to be able to allow the veterans to make that decision themselves as to how we deliver the care to them. and i think the choice act allows that to begin. and, you know, and i understand right now we've got a significant investment. if we've got over 150 health

care communities right now what do you see as the answer here? one of the comments was made that we're looking at providing the choice opportunity there if we can't -- or if the care can't be met by the va itself. and it sounds to me like what we're saying is that the va should be making the decision about whether or not they are delivering the care and or whether or not the veterans should be making that decision. and it sounds to me like maybe we ought to take the other approach here and say if we gave that choice to the veterans, i would suspect that a number of them who have a very great care being delivered to them by va facilities, might very well want to continue that on. but there's others that i suspect would say, look i'm not near a facility and i don't expect you to build a new

hospital near me. you've looked at asking for the ability to have flexibility to make that choice. what would happen if we took as an alternative -- and once again, we're talking about dollars and cents now being the deciding factor in this case, what would happen if we allowed the veterans to decide for themselves whether they nt wawanted to utilize the choice program more fully and skip all of the stuff that you've talked about in terms of the 40-mile rule and whether or not they've already had care and now they've got to go back in after 60 days and so forth, still the va making the decision. why not -- and share with me your thoughts. i'm sure this is not a new thought. share with me your reasoning and logic and why you are where you are at in terms of not allowing the veterans to make that choice themselves. >> we've spent a great deal of time talking about it and

options that we've briefed the staff on. one of the things to first keep in mind, 81% of all of the veterans that we provide care for have either medicare, medicaid tri-care or some form of private health insurance. oftentimes what you've seen today, you mentioned the fact earlier that veterans if given the option for choice some would elect to stay in and, in fact, that's precisely what happens today. roughly half, 40 to 50%, somewhere in that neighborhood, depending on whose survey you're listening to. and i would tell you, my perspective, part of those are deciding to stay because they want to stay. they are getting great care, enjoy the camaraderie with other veterans, they have continuity of care because they have been receiving care for a long final. others come there because they have an economic incentive to come there. because if they go out to medicare, they have a 20% co-pay for a procedure. so you look at that colonoscopy

or the knee replacement and the veteran can get it with medicare but he's going to wind up with a $7500 bill to foot. and so i think part of the answer comes -- and it's one of the options that we've talked about here -- is that we step back and we look at some of the economic distortion that exists today and find ways to eliminate that. so for example, what if medicare, medicaid tri-care and others become the primary care and 20% co-pay and then you are really providing the veteran with choice and you wind up the taxpayer doesn't wind up paying twice for the same care. so i think therein lies the kind of answer. this isn't about protecting the turf. we're about being good stewards to veterans and wherever that

leads, that's where we should go. >> my time is up but i think that's something we should seriously consider on this committee. >> thank you very much and thank all of you for being here today. let let me just say that needless to say that the va has a lot of problems that you all have been dealt. some of you have been there longer than others. some of you have had careers at it. some of you have become private sector. i have problems in west virginia like every other state. nobody has problems like colorado has right now with the -- with what's happening there. but let me just say i need to get this on record. i have a situation at the v.a. medical center. i don't know if it's been brought to your attention or not, if it's gotten that far up the ladder. switching anti psychotic drugs. the providers said this is what the v.a., this is what our veterans need. and they made an executive decision that it was too cost prohibitive. cut the medicine. didn't get the right

application. i was told there was a new policy in place dispensing the drugs. i haven't been able to obtain a copy of that. i'm also told there's a follow-on investigation into the matter. i haven't heard much about that. the same clinic has been closed three times. and i'm having a horrendous time, because we have a very rural state, trying to get our veterans the care they need. if you can get me answer back as quickly as you can. >> one, we'll get you the regulation. two, i believe the follow-on investigation referred to here is often times well routinely, when the office of special counsel has a finding that substantiates whistle blower allegation, then if it's medical care it's turned over to the office of the medical inspector. we do. it they come and determine exactly what happened. where the accountability was.

and those often times will come to me. >> i would appreciate very much that. really what it comes down to. this leads up to everything that we've talked about here. and i think senator sand ers says privatization. i just care about the veterans. an awful lot of them coming back. with that being said, do you believe the prift sector? private sector? okay. all righty. well those who have more private would understand. do you believe we can get better care to our veterans? to private -- through the private sector? and i mean that in the case of quality care the time, and also

the cost. and i'm not saying we're going to cut the v.a. down. but i don't think we're going to build anything else. we have to maintain what we have to get better care for more people. >> no, i don't believe that's the case. if you look at the typical veteran we provide care for, they're older, sicker and poor. we have a highly fragmented health care system in america. that's precisely the person that i don't think fairs best when turned loose in that praguementedpraguement ed -- fragmented system. if you talk to a large number of veterans, are there instances where they had to wait too long for care? are there instances where we made a mistake? yes, there absolutely are. >> use alaska as an example. we use alaska for the choice. that's how we come up with choice. we use alaska and how they were given better quality of care and quicker.

quicker wait times than anywhere else. they don't have a v.a. hospital. >> you know that market very well. >> if i might, i know alaska a fair bit. and about a decade of public service experience. i would offer the following, i think it takes both. >> okay. >> and i think the real question at the end of the day is which things fumtndamentally are done best by the v.a.? and which things ought to be supplemented by the private sector? there isn't enough demand to justify a build. or where it makes sense to spread the supply because of the amount of resourcing needed to deliver services. i think that's always been true. that's true in the d.o.d. system. that's why you see tri-care constructed the way it is. and alaska has a joint use facility in anchorage. when you get outside of anchorage, most of the footprint

tends to be either public in the d.o.d. public through the indian health service or private. and it's those two pieces working together that are ultimately going to deliver what needs to be done. >> my time has run out. but the thing on drugs, the drug dispensing to our veterans are almost criminal what we're doing to them. the cost of the drugs we're giving them wourt proper guidance. and you look to it as drug addiction. we got to do something there. in my state of west virginia. it's horrific. it's just absolutely off the charts. so we're putting a drug -- precipitation drug abuse caucus together. democrats and republicans working together. we're going to need your help. >> we would love to participate. we agree with you. we recognize it as a national problem. it's a problem inside v.a. >> it's a problem in general

society. thank you, senator manchin. senator tillis. >> thank you, mr. chair. thank you all for being here. just a couple of things, and one is based on a comment here earlier about in the senate thinking we should completely privatize the v.a. i honestly have not a single serious discussion with any member that saw that. if they did if anyone here did, all they need to do is spend some time in the v.a.s to understand the unique nature of what the v.a. has to offer. there's no other more welcoming place for a veteran than the v.a. not that there aren't opportunities for private care. there clearly are already. the nonv.a. care is a very significant part of what you all do every day before choice was ever implemented. choice is just another safety. so i realize in the committee

meetings, sometimes the words carry more weight than perhaps they should. i don't think anybody should leave the committee meeting thinking smib has a serious goal or or objective to privatize the entire v.a. i want to go back to a point that smart blumenthal mentioned. you have to figure out a way to get it billed out. can you give me an idea of the thought process. if you were going to shift that over to the buildout of the aurora facility. what would that cause in terms of delay or ramping down of what we would be doing with choice over the period of time that that money would not be available? >> what we basically did is pulled in -- we have a capital planning process that actually

builds a prioritized list that's years long based upon the pace of funding that we normally expect to get. and so when we looked at the $5 billion in choice funds, we basically reached into that skip list and pulled a segment out to put into that priority bucket. you know, what happens now is the sub substantial portion of this, if we were permitted to do this, in all likelihood would wind up in the 2017 budget. because they then fall back -- would fall back into that prioritized cue. >> that's why i was asking the question. you could infer from some of the discussion that there's a $700 million hit and care not being provided, versus taking a look at how the money was spent over time to build the ramp out of the choice program. that's why i was asking. it sounds like a leveling of

assumptions. >> that's exactly right. the commitment has been we would work these back into the funding stream as quickly as we could. there are hundreds -- >> i think that's critically -- in order for the the letter you consider us to have any prayer of consideration, you need to map out how we would have assurances that it doesn't materially affect it. because of the way you planned to spend the money anyway. >> thank you for raising the issue. >> otherwise i would tend to go back to the well articulated position of the ranking member. the other question i had, or the thing that is very important is we need to get a five year, ten year, 20-year picture of what choice nonv.a. care means i mean to get parameters set about it.

that's important at looking at the plan and figuring out how to do it. the answer is going to be different depending on where you are. senator sullivan will say his state has a per capita veteran in the nation. i have a veteran population that exceeds the population of several states. the capital planning requirements will be necessarily different than non v.a. care, but we have to come up with plans based on what appears to be the interest of the senate to continue down the multiprong path so you are taking pressure off requirements in some areas and maybe redoubling them in other areas. that's a very important thing that this committee needs to see, but we need to be very