>> next, "newsmakers" with veterans affairs secretary robert mcdonald. then president obama and chancellor angela merkel told a joint news conference following their bilateral meetings in hanover, germany. our guest is veterans affairs secretary robert mcdonald. secretary mcdonald came to this job almost three years ago and his background includes the military academy at west point and he is an army veteran himself. he came from private industry and served as ceo at procter & gamble. let me introduce the reporters -- leo shane of "military times" and david wood is the senior military correspondent for the "huffington post." i want to start with the wait times issue. over whatew report

constitutes wait time and where we stand now. and whatalk about this confidence veterans should have that the v.a. is addressing the problem? there still seems to be discrepancies over how the time is calculated and frustration over how it is being handled. if you ask me, the ultimate measure for any at thatand how we deal veteran is how they are satisfied with what we do. we have put together a transformation program where the first strategy is to improve the veteran experience. we have used some of the best companies in the world like disney, starbucks, and procter & gamble to teach how to progress -- how to process experiences and build light into those experiences. takeneight time thing has

over control of what should be the real measure. in terms of weight times, we isieve the data we are using good data and we believe wait are, on average, three to six days, depending on the specialty that you want at which location. .ut we have admitted to things if you go to the end of the bell curve, you have people getting same-day access, almost 20% getting same-day access. on the other hand, you have much -- people waiting much to long. there are some specialties we have to fix and here in the program we have put forward, it is a huge opportunity to fix those. ultimately, the measure of satisfaction is really what is

important. and to veterans trust the v.a.? put out a study that over 80% of veterans love coming to the v.a. and love the care they are getting. we are working hard to improve access so more veterans can have that care. are you confident you are heading toward the more friendly customer service model you have been talking about? am comfortablei that the transformation we are undergoing is heading in the right direction. with try to move forward this, we have hired more doctors and more nurses, we have opened up over 4 million square feet of new space and have evening and daytime clinic hours. the under secretary for health took the fight about our stand down on the weekend where we get people who need urgent care in. we are moving in

the right direction and it is politically popular to drag us back to some of these other measures, but i spend a lot of time working on moving us forward to where we need to be. we are trying to be veteran centric. on that point, you measure wait time not from when the veteran makes a caller gets in touch with the v.a., but from when -- does it matter how we measure wait time? it does to the veteran when there are three weeks before he gets a call back. sec. mcdonald: we are getting more and more veterans in for care. we have 7 million more completed appointments, over 1400 new doctors and 2300 new nurses. we have clinic hours in the evening and the weekend, we built women's clinic to deal

with the burgeoning number of female veterans. the veterans and for care but as we continue to improve care, more veterans will seek their care from the v.a.. 78% of veterans already have a choice, even before the choice and. private health insurance, medicare, medicaid, they have a choice. the average veteran uses ba for only 34% of their care. medicare toto go to get your knee replaced, let's operation,a $25,000 you pay a 20% co-pay and if you are a veteran and want your knee replaced, it is free. and there are going to be more people coming in for care. we need help from congress 35%,se of that goes to that's an increase of $1.4

billion in our budget we need to pay for that increase in demand. the demand is going to increase and we are admitting that. reporter: let me talk about the cost model. i've looked at the demographics and the cost, and everything is going up. ander per patient costs service-connected, disabled veterans, all of those things are going up. severely injured veterans whose lifetime costs are still out ahead of us. let's go back to 2014 and take a look at the demand. congress is not exactly paying even with you in terms of growing your budget. where is the friction? you're absolutely right. if you say what happened in 2014 that created the crisis, it was

a mismatch of supply and demand. congress passes the laws that provide that if it's for veterans. congress passes the budget that meeting the means of those laws and providing those benefits. when those two don't match, you have a serious problem. what i have tried to do is we have been clear -- we've done -- deep business analysis the problems in 2014 were not because of the wars in afghanistan and iraq. it was because of the aging of the veteran population. westear i graduated from point, 2 million veterans were over the age of 65. canary in the coal mine for american medicine. occur.it for they the aging of the veterans

population was one of the biggest issues that created that demand. the other issue, survivability , 10 timestlefield more likely to survive the battlefield. like orange, things posttraumatic stress and brain injury, things we did not know about, we are giving post dramatic stress treatment to vietnam veterans and we did not know what it was. but the reason this is important and i'm thrilled you brought it up is if we do not build the capability today to take care of afghanistan veterans, four years from now or 30 years from now, we will have the same crisis on our hands. that is why we're trying to transform the system. reporter: why are you having so much difficulty with congress? frankly, i am encouraged. we are working with senator

johnny isakson and richard blumenthal. bipartisan,g on a on the bus bill that would solve many of the legal issues we have today with running the v.a.. number one, there are seven different ways of a veteran getting care in the community. each one has different criteria and different reimbursement rate. methods came from seven different laws that are very complex for v.a. to administer and virtually impossible for the veteran to understand. last october, we put together consolidated legislation and we are working to get past. as i have gone around the country visiting the a sites, i've been to about 300 and i've noticed emergency room's are

being outsourced. why would you outsource and emergency room? that's a key capability. we discovered was there's a law that does not allow emergency room doctors who work 12 hour shifts. that is what is done in the private sector. hireresult, we cannot emergency room doctors. everyone agrees that rule should be changed and is archaic, but this is one of about nine different pieces of legislation we need to get done. host: are you equally as optimistic on the house side of the freedom caucus? sec. mcdonald: i'm optimistic about the senate and i'm optimistic under the leadership of jeff miller as the chairman and with the ranking member that we can get it done in the house. that was most encouraging to me was we put together this transformation plan that has five strategies.

we may not be here after december because the president changes office, we put together the 12 priorities we want to get done this year. one of them promises veterans they will get same day resolution of their issue if they come to the v.a.. and in the comes same day, they get to talk to a doctor orders and they get some resolution on their issue for top but to get these things done , we have to have the laws passed. committees and said would you please hold a hearing on the transformation of the v.a. and let's talk about these strategies and priorities. where id the hearing was able to talk for a number of hours about how we are transforming the v.a.. in the room was tremendous

bipartisan support. senator isakson said compromise is not a bad word and that's why i am hopeful we will get this omnibus group. if it gets to the senate, i think the house will act on it. getthe first time, we will the system right so we can work on behalf of veterans. onorter: that is cooperation the policy side. on the budget side, this is the second year where it has come in lower than you expected. do you feel like you are getting the message across that we need to invest this money now or is there something to be said for their argument that the v.a. budget has tripled or quadrupled over the last decade? dumping more money isn't the only answer. sec. mcdonald: you are right. the house appropriations committee cut from the request

about $1.5 billion, which seems like a small percentage but is still money we need to serve veterans. senate, in contrast, passed a budget with agrees with the president's budget. we are very encouraged by that. what we have submitted as a budget is what is needed to care for veterans. suggestingin any way that less is ok. as we put these budgets together over time, we have gone as far as to put in their what productivity measures we are taking. productivity measures are we taking to turn up money so we don't need to request it? one of the 12 rake through therities is to establish

spiked chain. believe it or not, we do not have a consolidated spy chain. we have it for our pharmacy and not surprisingly, we have the .est rated chain in the country but we do not have it in the operations field. if we can get the laws we need and budget we need, we will turn up at least $150 million year in savings we can use for other things with veterans. we happen working hard to treat all veterans who have hepatitis and there was at one time only one drug that solve this. we got that for a lower price than the market does but now that there is a competitive drug, we have accelerated the program in order to get every veteran cured of hepatitis c.

this would be the first time in history that people with hepatitis c have seen a cure and i think we can cure all veterans with hepatitis c. reporter: if you are trying to run the health part of the v.a. like a business, why not privatize it? there and iout understand you are an opponent of that idea. sec. mcdonald: we are trying to run all of the a like a business. we are not focusing on the bureaucracy. we look at it through the lens of the veteran, not the bureaucracy. change and cultural will take some time. when i came into this position and was going to be confirmed by the senate, i asked a couple of senators to take a look at that. should we get rid of the v.a.

and hand out some vouchers. what i found out is that it's not only necessary for the but theare of veterans, v.a. is necessary for the american public. any one of the three legs, the school. her. leg one is research. research in spinal cord injuries, research and prosthetics, research and tbi and post-traumatic stress. research for profit medical systems are not going to do. has goneour research to the american public. we invented the nicotine patch, we at the first electronic medical records. there was a v.a. nurse that came up with the idea of putting a prescriptions with medical records to keep them straight.

that of the innovations have affected american medicines came out of the v.a.. in a for-profit world, where is that going to come from? doctors in% of the the country. omar bradley set up in 1946. aligning the hospitals with the best medical schools in the country. share 300arolina, we doctors with the duke medical school. third is the clinical work. do fact that our doctors clinical work for veteran veteran, if you are a isn't it nice having someone work with you who has to teach what they are doing because that way you are sure that they know it. system andt

privatization is not the answer. veterans don't want privatization. if you ask veterans, they will tell you they don't want privatization, especially -- reporter: we have seen the commission on care floating the strawman argument, working more to push on those video services outside. if the system is that valuable, be able to stand up to a more private-sector scrutiny and competition. where do you draw the line at expanding that care? that tipping into the privatization area. sec. mcdonald: we are already doing the outside care. now, we are doing more in the community and we believe care in

the community is something we should be doing. we also believe in the transparency of saving our data publicly. i would like to see other medical private-sector organizations. we are holding ourselves up to transparency. do hearings on a handful of the 360,000 employees we have. i am all for that. in that strawman proposal, and you know this, the veteran service organizations came out strongly against it, pointing out the fact they are and of thevatization seven commissioners who signed have anrt, many of them interest in a private-sector medical system, so it's no wonder they would like the privatization of the v.a.

because that is is this for them. , they tend to present 1 -- 10 to represent one of the two political parties. guy, not ar business politician and the one thing i don't like about this job -- i retired from the procter & gamble company, but i'm here for one reason and that is to care for the veterans, the brothers and sisters i served with and admire so much. reporter: i can't let you get out of here without asking the accountability question. you proposed changing the important rules for senior executives. there are quite a few folks who want that to go further. how do you assuage concerns at this point that you are taking accountability seriously?

again, we are involved in a political season and the people who look at this are, by nature, politicians. and interest would i have not taking accountability actions? i come from the private sector and spent 33 years with one of -- most admired countries in companies in the world. by the meritstayed system protection board and unfortunately, what happened is when the choice act was passed , there law was passed were limitations placed on what they could do. they could not come back proposing a more lenient punishment. finding butwith our

disagreed with our punishment. is to take ourd senior executive service employees and take them to title 38 which is what they should do because they work in a medical system. that makes for a faster hiring process and gives the capability to pay competitively. the medical center director who is a title v employee has a maximum salary of $167,000 and they can get twice that much on the private sector if not 2.5 times that much. we have to be competitive because we are competing for the same people. one thing we are hoping that will be in the omnibus bill is giving us that competitive ability to have medical professionals paid competitively and hired competitively.

this is not a short are 47,000 private non-governmental organizations that care for veterans. there are things the v.a.'s not allowed to do by law, so they are picking up the slack, which is a great thing. do you chafe against the restrictions congress has put on you? are there laws preventing you from doing the kinds of things you want to do? sec. mcdonald: one of the things we do is submit legislative proposals. many deal with the archaic natures of the law. year,which were new this things we discovered this year. that, in coming in

and send the -- setting up this transformation program, we were very clear in putting together a , enhancing and partnering with strategic people. we love having partners to do it with. these other organizations are force multipliers. why not work synergistically? ane a summit doing on washington, d.c. called brain trust where i listened to 50 of the newest and best ideas to better care for veterans with traumatic brain injury and post-traumatic stress. take advantage of that in the private sector. this one is ethically and morally important -- there are veterans who got dishonorable discharges who, by law, we cannot care for. i have to have a capability i can partner with with similar

high standards of care to get those veterans the care they need. is that something you are waiting for congress to approve? sec. mcdonald: we are moving out and we have created strategic partners. we have a strategic ownership with the elks. million andd $4 800,000 volunteers. should tell the viewers that you donated your brain to the research you just talked about. sec. mcdonald: i did. i don't think they're going to find much. host: donald trump on the campaign trail has been extolling the virtues of reading business sensibilities to government. you now have two years experience. what is your explanation about how government response to business sensibilities? things inald: the learned at west point about leadership i have tried to apply throughout my life.

the idea of putting the needs of of the organization above yourself. jim collins calls that level five leadership. the idea of character being a most important point. you choose the harder right rather than the easier wrong. all of those leadership principles work just as well in government as the private sector. the execution may be different, but they work. the bureaucracy is responding? would say yes.i it will take time, but we are making progress. host: we're back with leo shane and david would. he's back at his job after spending the last year writing a book about our military service people. just spoke to secretary mcdonald about his major transformation program.

he is out of a job in a relatively short time. will be of this plan hardwired into place before a different secretary comes along? see if he iswill out of a job. there has been some talk that they would love to see him stay on into the next administration. he may not be able to escape, depending on who wins. a lot of the last two years has been set up to try to hardwire this in. there's still a lot to do and a lot of help they need from congress to get these regulations and policies put in place. if they can get this omnibus pass later this year, that will make a big jump forward for things like appeals reform and consolidation of care issues. but without that, there's a lot

of work to be done. of numbersard a lot and statistics and you spent a lot of time talking to veterans. are they seeing change? reporter: when you talk to veterans, there are two views of the v.a.. one is that guys are angry that they can't get what they feel they deserve. on the other hand, most people who go in for medical care sing the praises of the v.a. and i've got to say that the medical people and mental health people i have met there are superb. they are really good. a lot of what secretary mcdonald has tried to do is to bridge the gap between the really good resources they have and the problem of getting people in their. problem is they cannot force a veteran to come in. a lot of guys i talked to grumble about the v.a. and alleys ask have you signed up

for health care? -- they say there there are a bunch of idiots. it has been my experience -- i've been around for a while watching secretaries at the v.a. come and go and they always want to come put their own stamp on it. replaced byif he is someone else, it would sweep the top executives out and the problem will continue to fester. asked questions about congress and the appropriations process. congress is generally pro-veteran and pro-military, but they have been giving the speaker a run for their money on issues. reporter: for the first time in the last few years we have heard more people saying we want to support veterans but we don't think more money is the solution. easy to backup but we

have seen the committee come in under what has been requested and say we need reforms more than we need more money here. i would guess that in the end .hey're going to come close it's tough to say no to veterans, but the fact we are having more discussions and the fact that the v.a. is looked at as a place for there could be a lotavings, that speaks to the fiscal restraints on capitol hill right now. will how much pressure senator isakson be able to put on? reporter: a lot. it struck me that where he has indicated he's making progress is when he sat down with the veterans committee in the senate and i think he said we spent hours going over it and they came up with a bipartisan agreement that this was something that needed to be done. clearly that has not