Transcripts For CSPAN3 Politics Public Policy Today 20240622

Budgets. We had employees willing to give up compensation to meet this need of veterans in the community. Maybe some bonuses too. Miss walorski. Thank you, mr. Chairman. Mr. Secretary good to see you. Thanks for being here today. The problem that i dont understand with this, this is what i dont get, is that it seems like it keeps coming back to this issue of perception. You know you come today and you have your stats and your tables and your graphs and thoed kind of things and we over here, we want Solutions Just as badly as everybody else because were fighting for veterans in our district and fighting in a bipartisan matter and doing everything we can do legally through a legislative process but what weve been up to since you been here last is multiple hearings that go on every other day and look at the whistleblower retaliation, and systematic failures in denver and waste and fraud and abuse and ive been involved and every time your i. T. Chief has been here and we talked about this as well earlier getting answers from the i. T. Department do you need any money to upgrade what you have . No maam no, we dont. Do you have what you need to keep up with . Yes, we do. Do you have a domain issue that needs to be encrypted . No, we dont. And that is what weve been answered in a body like this and this issue of trust and verify becomes dominant in my mind. Because my fear is that, you know, i love the issue of flexibility. I sit with another member im on the Armed Services committee and we did that with the d. O. D. They needed to move funds and we did that. But there was a history that we could track that was transpatient transparent and open and the American People saw it and there was a verifiable need. And my concern is back to what the other folks made is what is the guarantee when we leave here today and well continue our pursuit of this over sight of everything that goes on in the v. A. And the American People think of and i sit here shocked shocked, man, we just heard about this crisis and is there anything other than shutting down the medical facilities to take care of our veterans, str anything else that can be done, number one and if the flexibility of funds is the answer, where is the guarantee . Are we looking for a marker in six months, this is what were going to see and i guarantee it and i put the power of my Office Behind it . I think the only guarantee i can give you is one were putting the right leaders in place and those leaders are leaders who are trust worthy and we have to earn your trust. I think that is the strongest guarantee i can give you. I understand and i appreciate that and with all due respect i accept that as your answer. I guess the problem is this that weve been at this longer than youve been at the table and we are still celebrating the day that you came and took this. And i apologize for everything that happened before me. And your confirmation was a year ago and in some areas youve been incredibly helpful. But my concern is this when we talk about being flexible and moving funds and we dont see and were the eyes and the ears for a quarter of a Million People each of us and that is what we hear and see and when we get the information back and sit here in hearings and dont have the verification on 1300 people whether they are probationary or full employees and we dont see the shake, rattle and rolling on your side and those are the kind of things i want to see. It wasnt too long ago that veterans were dying because of intolerable kinds of in stances that were exposed here in this place through media of what was happening to our veterans. I want to see people go to prison. There were people that were died that will never be accounted for again and the gross abnormalities at the hands of the administrators. And i would think with the 1300 people terminated, the fbi investigations and those kind of things we wouldnt have as many hearings as weve had but we still have instances of offenses against whistle blowers and i. T. Issues that the American People shake their head at the billions of dollars spent and no reforms and nothing is working and we still sit here today and i feel bad. I wouldnt say nothing is working. A year ago more than a year ago we had virtually 300,000 people on wait lists and today we have 7 million more completed appointments and wait times on average that are five days for specialty, four days for for primary care three days for Mental Health. I defy you to find another medical system in the country that has that. We are here we are all for shining light on what were doing because we think it makes it better and we appreciate your partnership to do that. Just like we appreciate your i understand. I dont want to make light this is an easy decision and i dont want the American People to think in the state of indiana where i live. 2. 5 billion is more than real money. It is shocking money. And we toss that figure around out of 168 billion budget like were just asking for this little amount of money but im asking for a guarantee and for somebody someplace to stand up and say never again on my watch never again on the secretary of defense watch or anybody elses or this president will we tolerate what happened and i want a guarantee that says here is what history said and were still having hearings on massive amount of issues and i want a guarantee Going Forward that this will stop. And the final question i have is when did the president know there was a crisis in the v. A. . I think the president has been working on the crisis in the v. A. For a long time. When did the president know about the budget crisis. The first conversation i had was the crisis with the budget. When did the president know about this hearing today that were 2. 5 billion short. Did you tell the president . Pardon me. Did you tell the president . Of course. I told chief staff sure. When did you do that . In june, may, when it started happening . I knew about the middle of may so probably about that time. I appreciate it. Yield back my time. I do have information that your office did provide to us regarding terminations and i have 958 were probationary terminations, out of that number. Mr. Orourke. Thank you mr. Chairman. Thank you mr. Secretary and dr. Tuchschmidt for your answers today and your testimony and your service to the country. I had a town hall meeting this saturday and as with almost every town hall that i have it was dominate bid concerned about access to the v. A. And primarily Mental Healthcare access which accesses your own recent rankings out of july 1st, el paso ranked 141st were dead last. One of the veterans who came up wonderful young man, incredibly patient and polite said the friday the day before, he had a Mental Health appointment scheduled for sometime at 9 00 a. M. At 7 30 a. M. He was called to tell him his provider wouldnt be available and somebody would call him back to reschedule. In one called him back and he came to the town hall to let me know. I called gale graham the new interim director and she got him an appointment this week so he will be seen but i tell you that anecdote because even though we are ranked last, you show us that at about 17 days. When i asked the veterans in my community, we did a statistically valid survey in el paso with a margin of error under 4 and they say it takes 16 days on average to see someone. So i want to register this note of concern, given the wait time scandal that we had last year that i dont think v. A. Statistics and reporting on wait times reflect what veterans actually experience. And when i ask veterans as opposed to the v. A. I get a very different number. And so i just want to register that with you and thank you for your commitment to turning the situation around in el paso. It could not be a graver crisis. Mr. Secretary you said your Worst Nightmare is a veteran not getting access to health care because we havent given flexibility and veterans are experiencing that in el paso, despite record funding, they are unable to get access to see somebody and 34 of the veterans could not see a provider at all for Mental Healthcare access whether it was 16 days, 34 days, 16 could not get in at all. So i want to make sure we go back and look at the numbers and reflect the reality veterans are experiencing. I would suggest we do that. Lets get your numbers and our numbers and understand the basis of your research and our numbers and sort through it. Obviously we have work to do in el paso. You and i and others have been working on that and we know that. And we submitted a proposal a Pilot Project to you and i thank you for reviewing it so quickly. Would love to work with you Going Forward to implement that or a better idea if youve got one. But weve been at the bottom of the barrel and that translates into care deferred care denied suffering on the part of veterans and veteran suicides in my community and ive met with too many families surviving members of veteran families and this cant go on. I dont mean to be parochial but i have to on behalf of the veterans tell you that we are in crisis right now. So whether it is our plan our your plan, lets turn this around. I would like you to talk about i dont disagree with your request for flexibility. I think it makes sense. And i dont know that i would have a problem longterm if i knew you were going to be the v. A. Secretary for the next five or ten years to carry this out. But in thinking about a policy and a set of rules that we lay down for future secretaries and the v. A. To follow Going Forward, how do we not create a moral hazard in the aurora funding and this 3 billion shortfall and future requests from the v. A. That whatever happens at the v. A. And Additional Resources are needed congress will provide them without necessarily getting accountability or safeguards Going Forward that we wont need to plug additional gaps to the tune of billions of dollars . We want to help with that as we put together this proposed legislation we would like to put in the safe guards and restrictions that we think would be necessary regardless of who is in office. We think that is certainly a part of it. And i said that in my prepared remarks. The thing we have got to work on is to find a better way to predict what the mand will be. I talked about the 34 of veterans accessing care on a 1 point of difference being another billion and a half dollars, we have to get a handle on that and Work Together on forecasting what that will be and building that system. Because remember i said in 2014 the crisis was because of the Vietnam Veterans. If we dont get ready for our iraq and afghanistan veterans we wont be ready for them 20, 30 years from now as they age. And i would like you to consider, not my original idea, but it was brought by the somers family at a hearing on the survivors of veterans who had committed suicide because of lack after access or problems within the v. A. And that suggestion on their part was as you are referring care out and you said you had a 36 increase in Community Care last year, their suggestion which i think holds a lot of sense, is why not refer that care out that is comparable to what the civilian population would need. I use the example of diabetes or you have the flu or dental care. And then for those signature disabilities and conditions related to service in combat, post Traumatic Stress military sexual trauma, the v. A. Becomes a center of excellence for access, quality of care and outcomes. Any quick thoughts on that suggestion from the somers family . My only quick thought is that patients like to go through the same medical doctor. So if you have a primary care physician, you want that primary care physician connected to the specialty physicians. One of the things im trying to work, given Community Care, im trying to improve the understanding of the military culture amongst private sector doctors. Were working with secretary burwell on this and if somehow weve got to do that. Because the primary care physician in the private sector has to ask the question have you served and because there is a different culture and set of questions that need to be asked if they have. So we are working on that. And i think we agree with your position, actually. Im not i think coordination of care issue says we need to provide as much of the services as we can, but there are some things, Mental Health is one of them that you cannot go out and buy and we have to be the center of excellence and provide the infrastructure to support those services for veterans. Great. I would like to use this basis of agreement to actually prototype this in el paso, somewhere in the country so we can see if this works. Why el paso . I dont know. If comes to mind. Want to wish a happy birthday to dr. Rowe who is now recognized for his five minutes. Thank you, mr. Chairman. And a couple of things. Obviously, mr. Secretary, youre hear for the same reasons were here and that is to provide the highest quality of care for veterans we can provide in this country as they have earned. I think one of the frustrations that ive had on this committee is that we have, as a committee, ive been here 6 1 2 years and we keep providing more and more and more money and then we have the v. A. Come back for more money. And we see things like the building aurora we beat that horse to death and moves that cost hundreds of thousands of dollars and i think of billions of dollars wasting in aurora that could have provided v. A. Veterans health care. I dont know where it went. We have a failed system between d. O. D. And v. A. That spent a billion dollars before you got here to try to integrate two Health Care Records and vanished an the money is gone. That is the waste that i see. And no way on this earth will you have allowed that to happen at your shop when you were and no way would i have allowed that to do that when i was a mayor of the local city in tennessee where i was and in my own practice i couldnt have survived doing that. And both sides of the aisle want to provide for the care and we feel like were caught in the trap. And the chairman mentioned bonuses. And the things that we see when we go home and talk to our veterans and to mr. O rourkes point, in johnson city, tennessee, at the Mountain Home v. A. Hospital and they do a fine job and as a matter of fact, i get veterans all of the time that tell me how much they appreciate the care they get there but there is no way on this earth that the health is four day and the Mental Health is five days an the Specialty Care is three days. And mr. Orourke, not to beat a dead horse i dont know where that came from but that is a fairy tale where i live. I would love to get the information from you as to the veteran, the name, the date where you believe that is not true because we do need to make sure that our data has integrity and the only way to solve that problem is if we Work Together to make sure we have the right data. But we cant anecdotes are helpful but we need names and dates to dig into it. I can provide you a big long thick stack of names and dates of people that cant get in. And i think that is amazing that you could if this is true, i certainly couldnt do this in my own private practice. I couldnt meet that criteria, a clinic appointment four or five days, most doctors are booked up weeks and months ahead. Any way, another thing i want to bring up the Choice Program, as i understand, as we envisioned it, was to help get rid of the backlog, not the v. A. Care going on currently, but to eliminate the backlog. If that program is going to continue and it is sun setted, then i think you are right, there ought to be one system ever taking a veteran from the v. A. To the outsource care. There shouldnt be three or four ways to figure out how to do it. It ought to be easy. And i talked to one of the veterans and ill be delighted to let you talk to a veteran in hawkins, tennessee that cant make sense of the program to this day. His comment was it was a joke. I put that in the record in his letter to us and he doesnt mind us using his name. And the other issue that i think that disturbed me was when the Veterans Choice Program came out the first 500 million spent and we had a hearing on that 300 million was administration. And i dont think i dont understand that. I dont understand why 60 of the money went to the bureaucracy and 200 million actually went to get veterans in to see me as a doctor. And maybe that is maybe that was a need. I dont know. But that seemed a little excessive to me. Well that was the amount that was required to set up the network. Nevertheless, were trying to maximize the use of that network as much as we can to provide more care to veterans. I think the other thing i would like into and certainly the flexibility is talked about you need any ceo needs that to operate their shop, i agree with that. The only thing i want to comment in the last few seconds i have is the morale at v. A. Hospitals is down. They folks feel beat down. And i think there needs to be a evaluation of the morale of the physicians and so forth. I think ill bring a bill up very soon as a trial process and a lot of people have done this when you go to your doctor any more, not only does the assistant comes into the room but another person shows up and that person is the scribe and because of Electronic Health records a doctor uses a scribe so they can see more patients and i would like to do a program and let scribes and see if the physicians there or the providers are not more productive. I guarantee they will be if you do that. I had friends at the v. A. Tell me they could see 25 , 30 more people. This is a big issue about a scribe. We are piloting a program with scribes. It is uneven right now but we are in the process of systemtizing. Morale is a big issue. 91 of the Medical Center with new directors new leadership teams. We have a lot of people leave for various reasons and morale is a big issue and v. A. People a third of which are veterans dont want to be called out as somehow different and failing to perform. They really care about veterans an they are working hard every single day. I yield back, mr. Chairman. Miss rice, you are recognized. Thank you, mr. Chairman. Mr. Secretary, i just want to make sure i heard you correctly. You said you found out about the extent of the shortfall in may . Yes. So, i believe that we were given information, this committee was given information, that the shortfall was actually discovered as far back as either february or actually we think it goes back to even december. Can you explain that discrepancy . No i cant. I havent heard that. I dont think we knew there was a shortfall. I think we knew in february there was a difference between the the increase in authorizations that were up substantially, and the obligations for that care which were on plan. So all of the data we had in february actually suggested that financially we were on path to for our 7. 6 billion estimated expenditures for the year. We questioned that data right. So it doesnt make sense. Why would you have 40 more authorizations, but the obligation rate isnt up. So that is what we knew in february. And it was at that time that we sat down and said we have to figure this out. Maybe there is a good explanation and it makes sense but maybe it doesnt. And it wasnt really until april that we understood the problem and the magnitude of that problem. So that just sounds like semantics to me . In what way . You knew about a shortfall. You just dont want to say it sounds like you just dont want to say that word . No i think it gets to do you have a solution . We thought we had a solution until the middle of may and that solution fell apart as we tended to work the different options for that solution. Okay so we said that earlier in the hearing. So mr. Secretary, if you can put it in 30 words or less the reason for the shortfall. Tell me. Hep c, just give me on idea concisely. The easiest description is more veterans are coming for care. 7 million more appointments than a year ago. So that is the reason . Thats the reason. So i kind of feel like this is you see the movie mr. Chairman, groundhog day, i feel like once again this committee is sitting here with members of the v. A. Will it is whether it is you or sloan gibson or anyone else talking about a crisis in the v. A. Right. That is a recurring theme. Another request for yet more money. And the most disturbing point to me is a complete and utter lack of accountability. Yeah, i dont agree with you, obviously. And this money is already appropriated. Were not asking you to appropriate new money. Were asking you to use money appropriated already for the Choice Program for chair in the for care in the community to be spent for care in the community. And then how are you going to pay for care in the Community Next year . Well what were asking for is a part of the choice budget. What weve talked about is lets put together an integrated way of doing care in the community. One budget one way to do it not the seven that we have today that members of the committee have already said veterans members of the committee dont understand and our employees have trouble actually executing. So where is the accountability, i guess is what im asking for . There is no part of the shortfall related to misuse of funs or potential funds or potential fraud or anything like that . There has been no misuse of funds or fraud have you done an audit . Have you had someone externally do an audit yes or no . We have done an internal reconciliation of these. So is that a yes or no . We have not an external audit. Okay, well do you think that might be a good idea yes or no. Im not sure it is necessary. But i think that we have 40 more authorizations for care in the community. You asked us to make sure no veteran was waiting more than 30 days for care. And weve done that. That is exactly what we are trying to do. And what i think is disgraceful disgraceful, because i have 20 seconds left yes. Is for you to insinuate by not giving money no one on this committee cares about veterans. I think you hold on a second. Im so sick and tired of that insinuation. I yield back. Just to be clair. We didnt insinuate. We think you all care for veterans dramatically. What were faced with is you pass the laws to give Veterans Benefits and you pass the budget to pay for the benefits and we have to execute that. When there is a mismatch between the laws an the budget it is a difficult proposition. I get letters from all of you every single day trying to give more benefits to more veterans and im all for it but we have to have the money to do it. I think the law also says that the secretary must manage within available resources. But the choice act is not a resource that is available to you at this point. Mr. Coffman. Thank you mr. Chairman. Mr. Secretary, thank you for your service in the United States army and although i think that the president i would like to think that the president shows you in recognition of your experience at proctor and gamble. And we had, in this committee my predecessor on the over sight subcommittee had requested a jao study of Major Construction projects and that study was done and published in april of 2013 and it said at that time that there were four ongoing projects, one in las vegas one in orlando, one in new orleans, and one in aurora, colorado, it listed as denver that they averaged 366 million over budget and that they were each on average was about three years behind schedule. So we clearly knew there was a big problem. Now if you and proctor and gamble were to step in and you had a department that was that dysfunctional, you would have fired the management team, straightened it out and spun it off. And when i look at the v. A. That your competency is really benefits to veterans is obviously health care being a very significant part of that. Construction management is not a core mission and i would love it if you would reexamine extricating from management projects. I know well have legislation today and ive talked to sloan gibson about this on numerous occasions and i think he was at the 250 million and probably above 250 million would be outsources to the gsa or army corp of engineers and today i think we have legislation today for 100 million. And one of the problems in the legislation today is that the denver construction administrative Investigation Board was supposed to be finished with the work in june and it will not be done in june. It may be done in september. But i just think that it is a real concern. And we held a the subcommittee oversight subcommittee held an investigative hearing in denver on the aurora project at the state capital and i think the chairman was there and mr. Lamborn was there and mr. Hatcher was in charge of the construction and stuck to the 604 million and it was lost in litigation late in 2014 on every single count that this was a plan over a billion dollars that could not be built for 604 million and the army corp of engineers is in the process of taking over the project but were talking about a shortfall today and were also talking about a half finished hospital right now that will cost another 625 million, i believe is the figure. Which is more than the initial projected amount to finish the hospital. And so i would just really ask you, i mean as a veteran, that it is just not the core competency of your organization and to focus on health care, to focus on benefits and to leave as many other agencies of the federal government do, major these Major Construction projects to others. I would love your response. Congressman kaufman you know we agree in part with you. As you indicated the only difference between your point of view and ours is what that right level is, if it is 250 or 100, but weve taken steps to improve our construction process. Were doing integrated master planning require. Were requiring that Major Construction has at least 35 plans design made prior to cost and schedule information. Were doing very deliberate requirements, control process that were instituting a project review board that were using a project management Planning System and establishing a v. A. Activation office and i could go on but all of these are best practices that come from the private sector. At the same time we have met repeatedly with the association of general contractors. They had boycotted v. A. We met with them, deputy secretary gibson and i did, and took them through the changes were making through the process and asked them their point of view if we are missing anything and they are helping us redesign. So wherever we end up with the legislation, what i can assure you is we are now operating against the new and improved process and what happened in denver, which is really regrettable, awful should never have happened will not happen again. Weve gone through these cycles before, where the v. A. Was going to try to reinvent itself and i think a 100 million ceiling will be a 300 million ceiling when costs are over run and i dont have confidence that the culture will change and with that i yield back. Thank you. Mostly sunny brian. I want to be quick. But as we move forward with this construction discussion, when you say General Service or even army corp of engineer i think you have to have some other input. And i know in one likes the word czar, but we have to have someone because when i look at the army corp of engineers and i know what happened with katrina and that project. So we need accountability, i dont care what agency is handling it. I yield back. Mr. Tack tauno. Thank you. Mr. Secretary, you are introducing in my view a new way of talking about contract, care with nonv. A. Providers providers not salary within the v. A. Is that correct. Yes, sir. So you are calling this care within the community and i think on a bipartisan basis we are encouraging the v. A. To cooperate more with what you refer to as the community or nonv. A. Providers and i think youre trying to change the culture of the v. A. So that there is not this enmity it is not a conspiracy to disappear the v. A. That is why we changed the name of care in the community to nonv. A. Care to care in the community because we own that care even though it is in the community. And relative to that ive seen others within v. A. Health testify before this committee the concern, since you do own the care and you are ultimately responsible for it there needs to be ways in which the contractor the contract providers are also accountable, that that care is accountable. And ive raised a number of times of in operability of health records. Now you have centralized the billing and payment authorizations from the regional areas and you are saying in your testimony that what ive heard is that that centralization had a lot to do with driving this shortfall, the misunderstanding that arose from what you knew from the regional to the centralized billing is that somewhat accurate . The requirement in the choice act to centralize the accounting and billing and administration of the choice act helped make it more obscure for us to figure out what was going on. So when you so in february you were seeing a discrepancy between the authorizations and the payouts and you werent able to figure that out. This centralization obscured was obscuring a clear understanding of what your cash position was . Yes, sir. It was a new practice. My concern is there any feeling that the centralized authorization has resulted in inappropriate authorizations that because my concern is that the regional offices had problems with with records that were paper records being passed back and forth and there was complaints that even registered mail wasnt being acknowledged and envisioned stacks and stacks of records that had to be scanned in and there were delayed in pages to doctors because of that. Has the centralization improved that situation at all . So far from what we know, the centralization, not just of the choice act, but across the payment function of v. A. Has accelerated our ability to pay bills. It has accelerated it but you are not worried about the rise in authorizations is is authorizations that were authorized that shouldnt have been the accountability is still sound . If anything, the centralization usually leads to better security. That is my experience. The care is still determined at a local facility level. A clinitian seeing a patient decides the patient needs something and puts in that request and the authorization is entered at a local level by the Business Office people at that facility into the system and the medical record information is transmitted to the thirdparty administrator. So there is a great deal of hum bruges about this surprise but the over all narrative im getting is that more money is being pushed out the door appropriately, meaning more veterans are being served and more veterans are finding out about the superior service meaning that you used the example of the Knee Replacement and there is no copay and they are significant under medicare so it is a racial decision that veterans are choosing to come to the v. A. And that accounts for can you give me that number again. The increase in number of people coming to the v. A. That you had before . It is over 2 million. But what were talking about is 7 million more appointments in the last year versus your i was looking at the increase. 7 more appointments and 7. 5 out in Community Care and 2. 5 in v. A. Care. And part of it was obscured by the change in the choice act and how you did the accounting. While i dont like the short notices but we have to act quickly and the more important thing is we serve the veterans and got news is that we are serving more and more veterans and lets keep doing it. Dr. Wenstrup. Thank you. Thank you gentlemen for being here. And you spoke about the increase in productivity and you said every 1 of in crease in 1. 4 billion, is that the number i got . I may have confused you. There is basically veterans are getting 34 of their care from the v. A. Any increase of 1 point of that leads to a 1. 5 billion increase in budget need. That is different than an increase in productivity. Okay. But on that vain also, with the increase in productivity the v. A. Is different than the private practice because when you increase your productivity that is not money coming in that is money going out in most cases, there may be some silos there. Whereas on the flip side in private practice, you increase productivity productivity, you have more come in. And that is the reality we have to face. We asked for more productivity. And i have to ask is the amount of productivity, the increase, the same amount of hours, and if i increase because i work saturdays and sundays and that is different than did i increase my productivity during the same amount of time . Right. And also what we looked at was productivity disregarding how many more physicians we brought in. But as we shared, the first chart we shared was on the 8. 5 increase in productivity jim can drill down on this more. So weve done it i think increased productivity in a number of ways and one is what you suggested in that we have evening clinics. We have had weekend clinics. And particularly those the evening clinics have been very popular with younger female veterans in particular. Well one of the things i think we need to focus though and again this is a comparison of private practice to the v. A. , is how do we increase the productivity within the same amount of time. And weve talked about poor setups within a clinic, you have one room when you need four and those type of things and the increase in productivity has to be looked at realistically. These are good things to add. But if were not giving the caregivers the same productivity in the same amount of time we are hurting ourselves. It is a little bit of both. Increasing productivity during the normal hours and using extended hours and one of our biggest hurdles to improving access to care is the physical planned infrastructure we have and if we can use that more efficiently by having extended and Weekend Hours then everybody benefits from that. I know i had a little frustration when i first came here and this is before phoenix broke and Everything Else where i went to the former secretary and said ill go into clinics with you as a doctor, ill go into the o. R. And tell you where you are not productive and getting more out of your caregivers. We have doctors on this committee willing to partake in that process. And we talked one time before about third party payments. And i would love to see the v. A. Be centers of excellence for things our veterans wouldnt want to go anywhere else and where people outside that arent veterans would prefer to go to the v. A. Because of the center of excellence and we do have veterans that come in and have other insurance. And im not sure how this has taken place and what percentage you are capturing and that can bring more money into the v. A. But maybe we should turf that out to people who do claims like this all of the time and take it out of the v. A. And increase the revenue to the v. A. These are productive things we can do. And we see more people wanting to go to the v. A. And especially if they have other insurance that is what we should do and be good at it. Our collections are up substantially but we are sitting down and reevaluating our Business Office practices and one of the things we are looking at is whether that collections is something that should be outsourced. And i suggest we take bids on outside sources on what that would look like. An the other thing and at some point we have got to know what we spend per rvu relative to value unit and if we dont know that, then we dont know what our cost is compared to when we pay somebody per rvu outside of the walls of the v. A. I do believe in what you said in care in the community. I agree with that rather than nonv. A. Care because if i was still in practice seeing veterans i would like to say im a v. A. Provider even if it is in my private practice. We have cost purview and we can discuss that with you. Ive been asking about it for several times. Secretary gibson said we cant do that. And im talking about everything. Not just what you are talking about the doctor. Im talking about the physical plant, the staff, the supplies, everything involved because that is very important to this entire committee. Well get you the information. I think the secretary should understand the cost of the pampers is not just the paper. Thank you to the chairman for holding this hearing when brave young men and Women Volunteer to serve in our armed forces they swear to support and defend the constitution of the United States against all enemies foreign and domestic. The Service Members make a promise to the country and to all of us to keep us safe and protect our way of life. In recognition of that service, we promise to care for them when they return to they have served and sacrificed to hold up their end of the bargain and we must do whatever it takes to hold up our end. Many veterans in many district who are excluded from the strict requirements of the Choice Program are unable to receive care in the community for which they are statutorily authorized because the v. A. Has begun delaying elective care due to the budget shortfall and as a physician can i tell you even if a condition does not meet the v. A. Urgent and emergency working standard for authorizing nonchoice purchased care it may feel painful and urgent to the patient. Veterans being deprived of health care they have earned whether due to unforeseen increases in cost or demand budgetary mismanagement at the v. A. Congressional dysfunction or any other problem outside of the veterans control is completely unacceptable and it is critical that we stabilize the immediate problem and resume serving veterans who need Community Care at full capacity, prevent any furlough or facility closures and reform any anything anything at the v. A. You need to predict the future needs of veterans. This is a problem due to the success of having 7 million more appointments but as a physician and Public Health expert i understand that you really cant predict to the t. The health needs of a growing population and a population in transition and identifying best practices and understanding the best practices may fail and we may need to learn from those lessons in order to improve. And you mentioned before the term manage to budget which is what this committee has done in the past and now you are managing to the requirement. But i want to warn you that the one requirement that you are that you are managing to is only one of a larger piece and complex. Because whether a veteran gets seen within 30 days is not the same whether they get the quality care, the respect that they need and the efficiency of care when they are being seen and thankfully that in a lot of the v. A. S, veterans rate their care very highly. So we need to manage to the Veterans Health care needs with efficiency and to the point of measuring how much it cost to rvus, that is the efficiency in this. And the Percentage Rate of cost due to or the amount of cost due to an increase in 1 of v. A. Care, that reflects on the efficiency of the v. A. So i really want to stress those points. And my concern here is these claims that were shutting down facilities that it is not and the way it is being presented is that you are holding these v. A. S hostage because you are not getting your way and that is absolutely and i know, with the sentiment, not true. And so first question can you explain more what is going on in denver, and how this is effecting the care of our veterans in receiving that care. And two, one of the concerns is that if you take if with flexibility, which i think it is a great idea, if you take money from one pot that you already have for another, there is always going to be takeaways. So is this a surplus fund, is this what is this takeaway that is at risk here . Well, the choice care act itself that Congress Approved was to provide care in the community for veterans. And there is a 10 billion appropriation that is to expire in three years. What were talking about is care in the community largely there is another half a Million Dollars for hepatitis c drugs so we are using the money for what it was set aside for which is care in the community and in that way we are using the money for what it was set aside for. It is not a new appropriation. Secondly, the issue, you raised about denver, because we havin flexibility of moving money between accounts, the money that came from this fiscal year for denver do not effect the health care of veterans in other locations. So in that sense, denver has no impact now. As i said in my prepared remarks, we have to get denver the denver medical complex, we have to put that money in the 2016 budget and im concerned about that since the original house budget cut our construction by 50 . Okay. Thank you. Yield back. Mr. Costello. Thank you. I would certainly like to associate my comments those with congressman rice veterans in chester and montgomery counties that i will work at 110 to make sure that there is no uninterrupted care for veterans out there. And im very confident in the leadership of this committee with chairman miller and minority ranking minority member brown that we are going to resolve this. So that there is, in no way, a diminishment or any interruption in the care of veterans. But i do also want to focus on a couple things either in your written testimony or that ive learned that are very, very frustrating for me. And i want to start with the issue of technology. I want to talk about technology and your use of the term flexibility. In 2004 the v. A. Received 475 million for their i. T. System. Gao report comes out and says that theres essentially nothing to show for it. In 2010, congress was going to provide another 400 million for another update and the v. A. Pulled the plug on that. You werent around then. I wasnt around then. But its clear in the past the v. A. Has identified the need for updated technological capacity, as well as congress being willing to invest in that. Part, i feel, of your explanation in coming here with this request relates to the Financial Systems that are in place as being as attributable to why you have a budget shortfall. I dont want to put words in your mouth but thats sort of what youve said in your testimony thus far. But on the issue of flexibility, you indicate and ill just quote you on page three. Over 70 line items of the v. A. Budget are inflexible. Freed up theyd give us help us give veterans the v. A. You envision and they deserve. These 70 line items of the budget, are you talking about the entire 170plus billion dollar budget, and is that all the line items . Yes, what were talking about is very simple. With the choice act weve given the veteran a choice whether they get their care within the v. A. Or outside the v. A. Very simpplistlistically, those two budgets cannot be commingled. I have to predict how that veteran makes that choice. Right. Or come back to you each week and say i get where hes going. The need, you dont always know what the medical need is going to be. There has to be flexibility within a budget in order to appropriately address the medical needs of the veteran. I also feel in a budget of 170 billionplus, that if that is itemized amongst only 70 line items. 70 line items for 170 billion really isnt that many line items. In terms of flexibility, the more money we say, heres the 700 billion. Do what youd like with it. I fear the more we get into the issue of 475 million disappearing into an i. T. Budget or that didnt really work out over there and so i dont like the aspect of just shifting things around without there being accountability to congress. We agree with you. If were able to do this, wed Work Together on what are the restrictions and the budget that should be commingled. In the case where the aim of the budget is exactly the same, i would argue they should be commingled. Next question related to that. You are looking to use choice money and theres i continue to hear that there is just a reluctance by many in the v. A. To sort of buy in, pardon the pun, to the Choice Program. So Congress Last session made a legislative determination that from a policy perspective, the Choice Program was something that not only did we want to offer but wanted to encourage through the allocation of dollars. I feel because some in the v. A. Either dont like that program or feel that since theres money left over and it was popular to institute that legislation that we can take it out of the popular programs and shift it elsewhere and it gets back to the issue of accountability and transparency. While you use the term flexibility, i also feel we could be painting too much of a broad brush when using the term flexibility for budget purposing and well lose the accountability we need and havent had and is frankly the source of some of the problem that causes us to be here today. Were very much in favor of care in the community. As you would expect then, were in favor of the Choice Program. If you or any of your veterans are encountering v. A. Employees who somehow suggest theyre not in favor of that we need to know about that, because that would be wrong. Were trying to create a culture where we dont care where the veteran gets their care as long as they are getting great care. Final point here. As you are talking about a new i. T. System in order to better handle budgeting and planning, from my opinion mismanagement can be very visible and im not suggesting you have mismanagement here but it can be visible and it can also be not visible. I think on the i. T. Side its very easy to mismanage things through the years and not really have any ability for those doing oversight to really know about it. On the planning side, its behind the scenes. Moving forward as you are talking about coming forward with what your Capital Needs are going to be for a new i. T. System it has to be thorough, comprehensive and the ad hoc, we need money here and a little money the year after isnt going to work. I really think it needs to be a comprehensive plan so we have confidence that what youre proposing is going to solve problems and over the long term reduce costs, because from a management perspective, youre going to have more trancesparency and things are going to work more efficient. Wed love to have laverne council, our new head of i. T. Come over and docktalk to you. The chairman had an opportunity to meet her. Shes going to be terrific for us. Has experience with Johnson Johnson and dell. Were taking the best out of the private sector. Mr. Mcnerney. Thank you, mr. Chairman. Thank you, mr. Secretary for your service both in the army and as secretary in this very complicated transition period. Were hoping it turns out well. Were going to do our best to make sure it does. My first question is with Public Private partnerships. Under secretary gibson mentioned at a june 25th hearing that he and you spoke about this and you were in favor. Can i ask you that question. Do you feel the v. A. Could benefit from Public Private partnerships . Yes. One of the five strategies for my v. A. Transformation of the v. A. Is strategic partnerships. Weve set up an office of strategic partnerships. We have a leader of that office, matt collier. And yesterday when i was in pittsburgh working in our Medical Center, there was a wonderful example. I met with the chancellor of the university of pittsburgh, the dean of the medical school. We have a Great Partnership between upmc, a medical provider, with the university and with the v. A. This is a system omar bradley set up in 194647 to ensure veterans get the best care in the country. Its a system that works today. Those partnerships are critical to us. Thank you. Mr. Secretary, i have taken a look at this graph. Youre familiar with it. The v. A. Care and Community Funding shortfall. Its kind of a straight line. If you divide 7. 6 by 12, you get 3. 6 billion per month. Over even the first few months its clear youre going to miss the target. Why did it take so long given this kind of information or was this not available until just recently . Actually, we went back and reconstructed it. That represents our actual obligations. What we projected earlier was lower. The obligation data was understated earlier in the year. But that reflects our actual experience. How much of the 3 billion shortfall is due to under forecasting . I dont think its under forecasting. I think we had anticipated that more of the care in the community would have gone through the Choice Program and been paid for out of choice 802 dollars that were appropriated for the program. That program im not going to sit here and tell you its working perfectly, but its not. And its a complex program that was, as it was structured. It is we have piggy backed on our pc3 contract to get it done because no one else in the industry was interested in taking this on. And we have business processes that quite frankly need improvement. Were working on those things. I think we have a Choice Program that we we and you thought were going to get more care in the community for veterans and make sure that veterans were not waiting over 30 days for care. We have not been able to get and maybe some of it is cultural. But weve not been able to get the volume, the number of authorizations through that program we had anticipated. That has not stopped us from trying to be faithful to the intention of congress when it passed the choice act, which is no veteran should be waiting. So really what were asking for is to be able to use funds that were appropriated for the purchase of care in the community through the Choice Program to pay for care that we purchase in the community that not through choice but through our normal mechanisms because we have oversubscribed those programs. How soon do you think we can provide that flexibility . Were asking you to do it before you leave in august. So by the end of this month. It would require a bill to be passed and signed into law by the end of august, by the end of july . The money has been appropriated. Im not an expert on what congress does so i yield to the chairman on that, but yes, i assume its some kind of bill. We would have to authorize the transfer of those dollars out of a finite amount from the Choice Program. Well, a painful question, can you provide a list of the facilities that will be closed if you dont get that money . Or how soon can you provide that list . We have an entire plan together which we can share with you. All right. I would just say when we run out of money, we will move funds around between facilities. As best we can. Medical services will be the first that runs out. It will affect essentially every facility in the country. Thank you, mr. Chairman. Dr. Abraham. Thank you, mr. Chairman. Let me just start by saying the old adage in business, you can delegate authority but never responsibility. I know you were ceo of a major firm before you came aboard. I would think if you had come to the board of directors at the 11th hour like ms. Brown indicated, they, too, would be a little incredulous at the shortfall, i guess the lack of vision, so to speak. We dont want to disparage that. We understand everyone in this room, certainly on this committee, you yourself and everybody in the room, has the veterans best interest at heart, and i do believe that. Let me hit it just from the hepatitis c. You and i both know its a very insidious disease. Takes many years to get to a point i was back in my district this weekend. I had three Vietnam Veterans come up to me and said that they had yet to receive anything from the v. A. Because i understand thats in the pipeline, and i do understand that the other hepatitis c drug was only approved in 2013. But saying that it still gives us about a year and three quarters, two years, to formulate plans, delegate how the medicine is going to be divvied up, so to speak. And it hasnt been done yet. Can you give me some indication as to when our Vietnam Veterans, iraqi and afghanistan veterans can expect some hard data as to if they are at this point of the disease they can get the treatment . Yes, so we of course, the drugs were not approved by the fda when we submitted our budget. I understand that. But so we have a plan. Weve had a plan all along for the treatment of hepatitis c. When will it be implemented, when will the veteran know they can get treatment . Weve treated over 20,000 veterans for hepatitis c. In the v. A. Are you basing that on liver biopsy results . How are you delegating which veteran gets treatment . Which veteran does not . You may be getting over my head in terms of hepatitis c. Our helptologists are managing that, but we have a severity score based upon whether the veteran has advanced Liver Disease. I guess if you would just get me that information as to how that determination is made. Their viral loads, liver biopsy. Ive treated hundreds, if not thousands of hep b and hep c cases. If you could get me that information. I would be happy to. And today weve treated over 20,000 veterans with hepatitis c today and continue to treat patients with advanced Liver Disease and patients who can go out into the community, have the Choice Program as an option to do that. And secretary, you said of that 2. 5 billion to 3 billion youre anticipating a shortfall that 500 million would be designated for hepatitis c treatment or the treatment itself . Yes. Okay. I yield back, mr. Chair. Mr. Bilirakis. Thank you, mr. Chairman. Thank you, mr. Secretary, for testifying today. With regard to they talked about the medical scribes. Elaborate on that. I know in the private sector these are great private sector solutions. And i know that the doctor will have more time with the i mean its been proven the private sector the doctor will are more time with the patient. I had a town meeting that lasted four hours. People were bringing that up. So you want the doctor to focus on medicine. Elaborate on that program, that pilot program. Ive heard a lot of this. Ive been to 195 different v. A. Facilities and every one i go to theres a different approach. But were pretty consistent in the operation of a pac team, a patient care team. A team of people working with a particular patient. On those teams today we dont yet have a scribe. I think what jim was describing was lets pilot the scribe so that everybody on that team can be working on the patient and not just entering information into the medical record. I didnt come prepared today to really expect this question, so i will have to take it for the record and get you information about where we are in terms of standing up a pilot program. Thank you. Any other Innovative Medical Solutions coming from the private sector that youve implemented in the last year . Do you have an Advisory Council set up, physicians possibly, to work on those ideas and make them more efficient . We have more than 25 Advisory Councils but two id like to tell you about. One is our special medical Advisory Council, which is the best medical minds, i think, some of the best medical minds in the country. Its chaired by john kerlin, the chairman of the American Hospital association also the chief medical officer of hca. Hes also a former undersecretary of health. They are providing tremendous leadership. On the my v. A. Work that were doing to transform v. A. , weve set up an external Advisory Council. We have many doctors that are part of that including toby cosgrove, the head of the cleveland clinic, rich carmuna, a former Surgeon General and also a veteran. But i have to tell you, one of the things they are bringing is not only their innovations and ideas but taking away our innovations. A couple of weeks ago, we published an article picked up in medical journals, not broadly in the newspaper about a new monte carlo simulation technique we can use to predict suicide. This is a breakthrough. If we can validate this model, of predicting suicide this will be a breakthrough for the v. A. But it will also be a breakthrough for the american public. And a lot of what weve seen and talked about in the past has been innovations that start in the v. A. , part of our 1. 8 billion of runch spending you appropriate and we appreciate it, that result in positive results for the American People. Heres a copy of the article. Id be happy to put it in the record about this breakthrough. And we have more of these breakthroughs coming. Sir, we need to get the word out on this Choice Program. A lot of people dont know. I know you sent out a card. What else have you done to get the word out . And then i have another question with regard to access. Weve mailed letters to everybody. Weve mailed now three letters totally to everybody. First with their card and then followup. Another flyer weve just developed. We have a website that we have just reengineered. Weve been doing surveys of veterans who use the Choice Program asking them what they think about the program. And one of the biggest issues theyve had is with the website and availability of information. We now have a redesigned website thats about to go live. It has a live chat so that the veteran, if they cant find the information, they can click the chat button and talk to somebody right then and there. Weve really done a lot. We had a set of outbound phone calls to people who were initial ly waiting for care more than 30 days. To contact them about the Choice Program. Weve tried to do a lot of outreach. My constituents are having trouble getting access to the program. Describe, for the benefit of the constituents, our veterans, our heroes, describe the scenario, how would it work . Theyd call the v. A. For an appointment . Can you describe a reallife scenario . Theres two benefits under the Choice Program. One is if youre waiting more than 30 days. If youre waiting more than 30 days for an portment, our staff if you call in or while youre checking out of a clinic and getting a followup appointment our staff will tell you if you cannot get an appointment in 30 days that the Choice Program is available to you. They have information they can hand out to the veteran about the Choice Program. At the moment, we are both booking an appointment for the retrn in the v. A. And offering them a Choice Program and making that referral to the third party administrator. The veteran can decide which of those two options they want at any time. Were about to change that program so that what will happen is at the time the veteran asks for the portment, if we cannot give them an portment in 30 days well ask them if they want an appointment in the v. A. Beyond 30 days or if they would like to go to the community, and then our staff will contact the tpa and get an appointment for the patient. We need to do a contract modification to put that program in place but its coming down the pike and should improve the coordination and level of service. If you are in the 40mile group, what happens is the tpa, our health net, already have your information and you can contact them directly. You dont need to go through the v. A. To get an authorization for care. Weve got to make it easier for the veteran. Thats what ive been hearing. We totally agree. Thank you very much. I yield back. Members, we are not going to do a second round of questions unless theres one thats just absolutely pressing. And with that, ms. Brown, youre recognized. Mr. Chairman, thank you for holding this hearing. As far as im concerned, failure is not an option. Weve heard a lot of discussion today, and i find it well, when i was coming up there used to be a program on sergeant joe frey, facts, maam, just the facts. I want people to understand the facts before they walk out that door. Ive seen a lot of people snapping pictures and us making different statements. I want you to give us a list of the facts while were in this emergency situation, and why, if we dont act before we go home, well have a crisis at the v. A. Every member needs to understand where we are. This is nothing new. You have been saying it from day one. You need flexibility, and we need to give you the flexibility. And then we will hold you accountable. But i mean to sit up here and act like we dont have 7 million additional veterans coming into the system wait a minute 7 million additional appointments and 4 million veterans and we have a Community Program that youve taken money for and used, and you used the choice where you could, but had limited ramifications how you could use it. Give us the facts before any of us walk out the door. We will. Thank you. No, no, i want you to answer it. You said it but i want you to go back and check the boxes for me. What i said was what wed like to do is get the authorization to use 2. 5 billion from the Choice Program for care in the community and 500 million for hepatitis treatment and get that before the end of the month because weve run out of care in the Community Money in the v. A. Budget and want to keep our care going for veterans. We think were in a good place in the sense more veterans are getting more care. 7 million more appointments. Average wait times, three days. Mental health, four days. Primary care five days, stelshty care, admittedly, we have issues we have to work on in other parts of the country but were making progress in the right direction. We want to keep it going. Or veterans deserve it. Id like to just add that we continue to buy care in the community for patients so they were not waiting more than 30 days. When we ran out of money in our budget to do that we took money out of operations to continue to buy that care. We can probably sit here and debate whether that was a wise decision or a bad decision. Had we not done that and used it in operations we wouldnt be facing any shutdown or closure, but we would have told people back in june, in the beginning of june end of may, there was no care in the community. You either waited in the v. A. Or went someplace else. We continued to buy care for the patients that could not get care through the Choice Program. And so today, because of that, we find ourselves not having money out in the field to be able to make payroll and stuff during the month of september. Thats really what were asking today, is to be able to use choice money set aside to buy care in the community to pay for care in the community. The last thing, i know one of the discussions was were having some problems in certain parts of the country, but some of the veterans, particularly those in florida, they like the care that they receive from the v. A. And i dont personally want to see v. A. Just going to a specialty. We need comprehensive care in certain areas, and i do know around the country, its a real problem getting comprehensive care. When you look at the approval rate veterans its like what is the percentage . 80 something to 90 something, like the care they get in the v. A. Can you respond to that also . That is what the vfw study told us. The other thing that we see is veterans have always had choice. Remember 81 of veterans have multiple ways of Getting Health Care whether its medicare, tricare, v. A. What were seeing as we improve care is more and more veterans are deciding to come to v. A. The thing we have to be more vigilant about, and i take responsibility for sharing the forecast for you as we continue to improve care, how many more veterans are coming to v. A. For their care. All right. Thank you, mr. Chairman, for this hearing. Thank you for the time, and i yield back. Did i hear you just say that in june you were at the point that you were going to have to tell veterans you were out of money and there was no longer the ability for them to have care provided for them in the local community . To the Purchase Care Program we started pulling money about 290something million from vera to supplement that pool of money in probably early, middle of june. Is that an accurate statement to say that veterans would not be able to have care provided for them outside of the v. A. . Except through choice. Except through choice. Again, you couched your comment to make it appear that you were going to shut the spigot off in june. Theres 9 billionplus finite dollars, which is why weve been so protective of that money. You are the ones that sent out the notice with the card saying that its a temporary program. And as you drain the money out of this program and somebody made a budgeting decision, and youve already said rightfully or wrongfully, you missed. You thought you could weather the storm and just squeak by, but you cant. You got caught. Somebody made a bad decision. Veterans will still get health care in the community through choice. Doctor, is that right . Some veterans will get some i understand. Look. I know there are some restrictions on dental issues and things like that. But you are making it appear with the statement you just made that as of june you thought you were going to have to start telling veterans they couldnt receive care i think i said that veterans who could not get care through the Choice Program would have to wait for care. Its not exactly what you said but ill go back and check the record. I stand corrected. We are at a crisis situation. Many of my colleagues have already brought that scaring veterans that their hospitals are going to close, that were not going to be able to pay their salaries i think, is just that, trying to scare them. We are the ones that will have to make the decision whether or not this money gets allocated. I dont think theres a Single Person up here today that advocates anything less than trying to solve the problem that exists out there. What were asking is when these issues arise internally, the sooner you can inform us, the better off everybody is. Were still not satisfied with where we are with the Choice Program. I dont think you are either. You have made those comments, but all hands need to be on deck. With that, id ask all members have five legislative days to revice vise and extend their remark remarks. With that, this hearing is adjourned. The National Governors association is holding a meeting in West Virginia starting today. Join us tomorrow when were live from the nga meeting with three sessions. First up governors will talk about combattingobepe identity abuse. At 1 15 a discussion on education and state economies and later a discussion on health care issues. Saturday, 9 45, on cspan. This weekend on the cspan network, politics, books and American History. Saturday morning on cspan starting at 9 45 the governors address the nation opoid crisis with guests from california, mary bono, and later the governors will discuss how to sim stimulate their states economy and the impact on the employment rate with tomas perez, and sunday evening, an interview with former governor of rhode island and democratic president ial candidate lincoln chaffee. On cspan2 on book tv ralph nader on the many unanswered letters he sent to president s george w. Bush and barack obama about domestic and foreign policies. And sunday afternoon at 3 30, journalist roberta on new orleans ten years after hurricane katrina. And on American History tv on cspan3, sunday morning starting at 10 00 eastern we commemorate the 50th anniversary of Lyndon Johnsons signing of the 1965 medicare bill. Our coverage includes counsel and family on how the president was able to get the bill passed. Phone conversations between johnson, his aides, and congressional members about politics and strategy and the signing of the bill at the harry s. Truman president ial library and saturday night at 7 15 cybercommand historian on the history of computers hackers and the governments response to computer abuses. Get our complete schedule at cspan. Org. Freedom breeds inequality. Now ill say it a third time. Twice is enough. Complicated, confusing. Filmmakers talk about their documentary best of enemies on the 1968 debates between conservative william s. Buckley and gore vidal over war politics, and god, and sex. Theres not someone in their ear. Very unlike today. You know, today, i believe theres someone saying, you know, the numbers are dwindling. Talk about you know, hot topic, hot salacious topic number two. Whereas then i dont think that was the norm in tv at the time. And i dont think these guys needed it as morgan said, these guys didnt need it. Howard case was a moderator, who was a distinguished newsman, who was, i think really embarrassed by this. He was moderating, but he disappears for sometimes five or more minutes at a time. Today, you wouldnt have a moderator not jumping in every 30 seconds. So i think really everybody at abc just stood back and let the fire burn. Sunday night at 8 00 eastern on pacific. On cspans q a. Earlier this month the center for American Progress the chinaUnited States exchange program, released a report on u. S. China relations. They hosted a discussion on that topic which included discussion on the two countries common interests and concerns in the middle east. This is about 90 minutes. Good morning, everybody. Welcome to center for American Progress. Were glad to see folks here on a rainy monday morning. Im Vice President for National Security and International Policy here. I would like to welcome our distinguished guests from shanghai. Dr. Yang jiemian and dr. Wu chunsi. They have both managed to get to washington despite a typhoon that disrupted all air operations out of shanghai. So were extremely happy youre here safe and sound. We hope the jet lag wont keep you from raising strong arguments and lively discussions this morning. Back in february 2014, the china u. S. Exchange foundation and the Shanghai Institute for International Studies issued a new report on a new model for major power relations. It stressed it needed to be more than Building Trust and avoiding conflict. They needed to look at forwardlooking actions and cooperations to tackle joint problems like counterterrorism and climate change. At a private dinner following that launch of that report, some months before i joined, i hear a lively discussion taking place on the middle east. They discussed whether the u. S. And china could proactively coordinate smart policy on a range of common areas from Energy Security to countering violent extremism. It seems clear there were common interest. It was not clear whether the two nations wanted to Work Together or could figure out a way to do so. The report released today on u. S. China cooperation in the middle east includes individual contributions from researchers from cap and siis and its the culmination of a year of research and exchanges between the two organizations. It started with that dinner and continued through a series of video conferences and highlevel dialogue in beijing, china in march of this year. Both sides viewed the regions as incredible promise but marred by decades of uncertainty, political risk. They asked about the impact of the u. S. Rebalance in asia whether the u. S. And china can find areas of winwin cooperation far afield while managing regional concerns and growing tensions in asia itself. They looked at egypts prospects for future stability, the legacy of the arab spring, and the ideas for coordination between the u. S. , new silk road and chinas belt and road concepts. Longstanding issues in the u. S. china relationship remain, in some cases moving in a positive direction and some significant your yeahs towards greater tension. But today we look for Common Ground in a volatile region that is important to both countries. The United States and china have a special responsibility over global influence. It would be powerful if the United States and china could Work Together and through the International System to help the middle east to ward a new era of greater stability. Before we kick off the Panel Discussion its my great honor to welcome alan wong executive director of the china u. S. Exchange foundation for some opening remarks. Alan has been a vital partner coordinating and facilitating dialogue with the Shanghai Institute and others and its a great plaersheasure to have him with us again. Alan . Thank you very much. Welcome to this Panel Discussion. I note that very soon the world will celebrate 70 years anniversary of the end of world war ii. It reminds me somehow how fortunate my generation has been that we have seen no major conflict of that magnitude in our times. But it also reminds me, you know, we shouldnt take this for granted. There are plenty of predictions that an emerging power like china will inevitably come into conflict with an established power like the United States. If this were to happen, the consequences will be truly unthinkable. My colleagues from c. A. P. And the Shanghai Institute of International Studies want to believe otherwise. That there is nothing preordained about this. And we always believe we should grant every opportunity and create the necessary conditions to improve Mutual Understanding to expand Strategic Trust and help establish an Even Stronger foundation for u. S. china bilateral relations, which is the most important relations of our times. The seventrategic and economic dialogue and the highlevel peopletopeople exchange has just taken place recently. I was going through the lists of accomplishments of both events and was quite pleasantly surprised and encouraged by the breadth and depth of the items that were listed. In the sebd alone, there were 127 items listed. And despite what we read and hear every day about the disagreements between two countries, south chinese seas, and the new National Security laws of china, et cetera. Overall relations have been on an upward steady trend. Again, we must also look beyond our bilateral relations we must also explore possible means of cooperation in other parts of the world. China u. S. Exchange foundation is privileged to be a part of this. We join our close and very capable partners c. A. P. And also of course Shanghai Institute of International Studies by professor yang, to explore cooperation in the middle east, which is the most volatile region in the world. Through their unrelenting efforts for more than a year, they have produced these studies. And im very much looking forward to the Panel Discussion and to their conclusions and their recommendations, so may i once again thank all of my colleagues in c. A. P. , in siis, on behalf of my organization, which is a Nonprofit Organization based in hong kong to promote u. S. china relations. Thank you all very much. [ applause ]. In any order. And thank you all. Thank you all for being here. Im really excited to have this great group with us. This is one of the more innovative things we have done. People dont think about the u. S. And china in the middle east. But the fact is both of us have incredibly vital Strategic Interests in the region, and theres obviously scope for cooperation and discussion clearly a lively dinner set off a year of back and forth and dialogue and culminated in our being able to issue a report today. Im just going to quickly let you know who is on the stage with us. Immediately to my right is a dr. Wu chunsi Deputy Director of department of american studies. Dr. Wu is focused on china American Security relationships and arms control and nuclear deterrents, issues very relevant in the middle east as we speak right now. Immediately to her right is rudy deleon, senior fellow here at the National Security team at c. A. P. Hes been at c. A. P. Since 2007. Many of you know rudy well. Former deputy secretary of defense for the United States. He has been very deeply engaged in u. S. china relations. For many years now and actually among the people here, he probably splits his time traveling between the middle east and china more than anyone else. So really perfectly suited for this job today. Immediately to his right is dr. Yang jiemian. Hes director of siiss academic community. He has been able to apply his deep knowledge of how china approaches regional relations to looking at the middle east. And finally Brian Katulis runs the center for American Progress, also well known to many of you, and he focuses on the middle east and asia. This is his opportunity to get exposure to china and think about how these two major powers could potentially cooperate in the region. What im going to do is ask each of our panelists to give a few introductory remarks. We will go into discussion and open it up to the audience for questions and answers. I think i will start with dr. Yang if i may and welcome, and thank you for finding your way here with Flight Cancellations and all of the above. Thank you very much. Good morning, ladies and gentlemen. It is my great pleasure and a privilege to be here. And in china, we say, if you want to play a role in think tank, you have to be through the grilling of people in the United States. Im a little bit different from some people. Some people play the role of a doctor. They try to emphasize on the question problems of the china u. S. Relations. Very often i would like to play the role of the paintest. I look for the most beautiful part of the china u. S. Relations without neglecting the problems. Now, what my thinking about the project are china u. S. Cooperation on the middle east affairs. I think there are three reasons why we embark upon this very meaningful project. First of all, the strategic importance of the middle eastern region. And this is the concentration of all the difficult complex relations of country to country major power, religions, et cetera. If you want to understand how the International Affairs are working, you must understand how it works. Secondly, some people say now we reduce the dependence of United States on the middle east oil and the gas because of the shale revolution et cetera, the united interest is on the wane, but i dont think so. This is very superficial. And the understanding, they spend most of their money manpower political will and just look at the secretary of state, john kerry. How many times he is doing on the middle east affairs. And also this is a place where china and the United States could complement each other. The United States is the most strong, strongest and influential country in the region whereas china maintains good relations with all the conflicting parties. And also chinas dependence on middle east not only the energy but also others are increasing. And china is becoming from a Regional Power to a global power. So china needs to play a more proactive role to carry on more responsibilities, et cetera. And so theres a lot that we can discuss, we can Work Together. The United States and china do not necessarily see eyetoeye on everything. However, we could work under the overarching concept of new model of new major power relations between china United States to tackle with this very serious challenges. And this is why and how both parties come together thanks to the china u. S. Exchange foundation in hong kong. And im very pleased this is what you have in your hand. Our joint report. Thank you. Thank you, doctor. Im going to turn to rudy for a few minutes for opening remarks. Thank you very much. Once again, the two of us were coedteres of this project. It did again, as vikram noted, begin in february 2014, when we were having the discussion on the new major powers relations. This was a chapter in a very recent book. It looked at rising powers and established powers from the perspective of germany and britain. And i think for no other reason but many others the fact is in the 21st century the United States and china will be setting a different course. One vastly different than traditions out of europe. And i think its reflected in the audience here today where we see many friends, many engaged voices in the debate. Most across the pacific but also some of the leading experts on middle east policy here in attendance as well. So when we had our discussion more than a year ago, we noted that in fact, working together means working together as two countries on areas where there could be winwins. But more important to have a dialogue where there are issues of disagreement. Now, as we press forward and as we look to a summit meeting in washington that is coming between president obama and president she in the september time range, we know there will be working together as highlighted by the most recent strategic and economic dialogue that just occurred, but also know there are other issues of disagreement, most predominantly the cyber question which is front page news and has been front page news, as well as some of the issues of the south china sea. But in these video conferences and dialogues in the discussions that brian vikram and i, as well as dr. Melanie hart our other c. A. P. Colleague and john podesta, were able to participate in march we were really looking at how we might be able toforage a better working relationship on Critical Issues in the middle east. Its the energy center. But finding ways to make a constructive response in dealing with extremism, we have seen the consequences of extremism spreading to the west. That was 9 11 and some of the attacks in europe and france in particular. The fact that all of our Security Forces were on vigorous alert over this fourth of july weekend to deal with some of the extreme threats coming from the middle east. We know that these are issues that are not going away. And we know that there are other stakeholders in the region, including china. And that one of the things that is extremely important is where there is Common Ground. Can the u. S. And china Work Together. And more importantly, not be played off against each other among all of these constituencies. So in our discussions, both in the video conferences, ill let brian discuss egypt and the middle east geopolitical issues as well as dr. Wu but one area on the new silk road, one belt, one road. The chinese term for the same issues, we looked at this how we might use Economic Strategy to find complimentary and consistent ways of working together in central asia, collaborating in complimentary ways looking to expand local Economic Growth through connectivity in a very, very critical region. The silk Road Initiative on the u. S. Part, the one belt, one road really takes us to pakistan, which is an avenue both were trying to work in a constructive way, but also recognizing that pakistan was the origins of the al qaeda in afghanistan as well. And so how can these two common interests of the u. S. And china in finding a better path forward in the middle east, Work Together in central asia, in pakistan, in afghanistan, in a complimentary and consistent way. Collaboration is important because this is one of the least integrated, least developed areas of the world. And that they suffer from an insecurity that can push forces into the west, as well as east. And so we also know that this is a region with rising youth bulges and that they are projecting to face increasing unemployment. Similarly, the ability to meet the sustainable security goals in this region is one that will require political and diplomatic attention as well as an economic focus, if we are to find a constructive path Going Forward. Id like to thank our colleague at c. A. P. , along with brian harding, along with muktar awad who are all part of our developing the issues and putting forward the report today. But i think its interesting when you talk with people, as we have at cap and the Shanghai Institute, that you can find that framing the question and starting a discussion, putting words down on paper, can actually lead to a constructive path forward. Well have our differences. Well have issues that are of critical divide. But that there are common interests and that it will be important for the u. S. And china to Work Together on these issues of central asia, on these issues of the middle east as we move forward. Vikram, thank you for hosting us. Thank you for coediting this paper and for always being on the video conferences, which when they are 12 hours time difference, one side is getting up very early in the morning or staying late in the office. We thank those folks and alan wong and the china u. S. Exchange association for partners with c. A. P. As well. Thanks, rudy. Your thoughts . Thank you very much. Im very glad to be here and have this opportunity to join the discussion on china u. S. Cooperation on middle eastern affairs. I read the report and i share with many opinions of colleagues presented in the report. I think that i totally agree that china and United States have actually many common interests in the middle east. The two countries can cooperate with each region. And another thing i want to mention here is that actually i want to mention here is that actually i think chinese and American Scholars share a vision. What is happening in the middle east now, they both notice that there is a kind of a great transition, transformation in the middle east now. It is just opening. And it is just beginning the process of the transformation. And that china and the United States, to some degree, have to adapt to that kind of change. That is a very big change in the middle east. It seems that the United States is reframing a kind of strategy to the middle east. And they are trying to build up kind of a new balance in the region to readjust relationships in that region. Of course, the United States is a major player in the middle east. China at current stages feels it is not active as the United States. But just like professor young said now china should be and will be more active in the region so the two countries have to consider how we cooperate with each other in that kind of very big change in that very important region in the world. And the second thing i want to say about the project the project of china and the United States. I think there are two parts that the countries can cooperate with each other. Very interesting that they are overlapping geographically in this region especially in afghanistan and south asia india and pakistan. So that is one of the of the regions that they can cooperate. And the other thing is they pay a lot of attention to the Economic Development this in region and that is a way to some in way stabilize the region and contribute to the stablity of the region and it is able for the United States and the chinese to cooperate on that project. And on the belt and the projects i mean china and the United States need more dialogues, discussions. Because this two project design actually from different departments. For example, the u. S. Has proposed by the state department, but it is basically, how do you say, in charge of by the state, the National Development and the reform committee. So it is basically about the Economic Development. So how to how to say carry out that kind of dialogue between the governments and the people will be very important to push forward with the cooperation in this regard. So i will just stop here. Thank you so much. And it is great to have you here. And were finally going to turn to brian. Brian has explored the trickyier areas. Common interests are clear but how the interests are prioritized and how you face countries going through dramatic challenges and how we approach countries with internal problems and want to help them move in Different Directions and those approached differently by the United States and china profoundly different and brian has looked at egypt in this work and in pakistan where i think there is interesting new areas that we could have some discussion about later. So brian, a few minutes and then well get great. Thank you all for coming and thank you dr. Wu and dr. Singe. We have had key actors in the middle east and our friend in europe about what to do at this time of change and do you are this project was essential to try to look ahead with a longer term perspective of where are things going in the region and what are the possibles. What i thought i would do is make one overarching comment about the u. S. China cooperation in the region and talk about three issues. One, the issue of the new silk road and second, egypt, and third, iran even though our ports dont address iran, it is very important day. In the middle east the snapshot is Key Countries and nonstate actors are in a fierce competition for power and influence. And in some parts of the middle east like iraq and syria, weve seen essentially the tearing down of governance and stability and structure. And if there is one message from the package of our reports and our dialogue, is that the u. S. And china as to great global powers should avoid picking sides. It would accelerate quite likely the process of fragmentation. And i come out of this dialogue and this report hopeful that there is a basis for a discussion but also mindful that there is a lot of more work that needs to be done between the u. S. And china because though we may have common longterm interests in the brought sense of things when it gets down to the details of what we do it is difficult. The u. S. Remains the dominant military power in the middle east. For all of the talk and sometimes very loose talk of some of the partners, some of the closest allies, of the u. S. Being disengaged. No outside power has the networks and the capabilities that the u. S. Does. And other actors including china, have benefited from the overarching Strategic Security umbrella weve provided for years. I think it is changing. I think at the u. S. Is at the start of repositioning the over all strategy to the region. And at the same time and that is why we get into the broader point, china has had a longterm strategy around the middle east and the world of nonintervention. Not taking positions on a region that wants outside actors to choose sides. And in essence i see chinas role as developing favorable economic relationships while avoiding the many conflicts of the region. And in some ways i thought about this what the Obama Administration tried to do in the Broad Strokes in 2013, when you think about it of trying to use diplomacy to engage the israelis and palestinians and use diplomacy with the syrians and they had the four pount place in 2012 and all of the things led by secretary kerry is what china would like to do. And as we see from 2014 and the lesson of 2014 that the region taught us, like groups like isis and daesh taught us the aspiration of trying to use diplomacy without the other tools of security measures it is harder i think to achieve results an here we are in 2015. And i think the to round out the point, that the u. S. And china faces for cooperation, is to try to avoid the mistakes made in previous decades in the last century but other outside powers that in essence, way i see the middle east in the fragmentation and the lack of capacity and certain Key Countries like yemen and parts of egypt the u. S. And china need to avoid the mistakes made by other outside powers in the 21st century of strakting strakting powers without helping and we can think of countries where outside powers went into regions and took what me needed for their economy without building up their countries structures and a key lesson of todays middle east is very much the problems of the middle east are bourne out of not only the extremism of today but the mistakes made in the previous decade. New silk road and i think were in broad agreement, and i think rudy mentioned it and others have too. It is essential for Key Countries of the region in the middle east where there is a lack of trade and transportation reason the region. If you go to egypt and you go to egypt regularly and lesser developed parts not the gulf countries, there is an extreme need for the type of investments that china is capable of doing. The u. S. , i think is capable, and less willing after the last 15 years or so given the costs. And there is a complement perhaps. Energy development, quite obviously, china is becoming much more dependent on the Energy Resources of the region. But the over all overarching investment in infrastructure and trade and transport to help the middle east be a hub to link asia and africa and europe i think is a longterm project where we should continue the discussions and see where it maps up. And again this point though of creating value within the region while we do that is essential. Value meaning how does the u. S. And china create jobs and job growth in places like egypt if our countries come in with approaches that dont address the youth bulge and things like this, the type of extremism weve seen on full display in the middle east i think, will only grow. So if we have an extractive approach, one that doesnt try to foster local institutions i think that will be very difficult and this is what we need to discuss in the new silk road. Second on egypt and at a time when everybody is focused on iran and given the next deadline or todays deadline on talks an then isis and given the fact we have a program tomorrow with genera