Program or were gutting the Choice Program is absolutely positively wrong, proven by the data. 6 billion weve overspent 6 billion this year in in Community Care. Community care is absolutely essential. I think the issue is your hepatitis c drug, 1. 5 billion or whatever the number is for hepatitis c is part of the issue, and i dont think any one of us thinks that we should not be providing that drug. In no budget submission that i can recall was it discussed about that, although im hoping that somebody and ms. Brown actually talked about the forecasting that somebody was looking at the approval of that drug and that it was coming on and that if it did come on that it was going to cause a significant issue as it relates to the nonva care item, line item he, of 6 billion, which is gone now, its never been gone before, but all of a is sudden this year its disappeared. And my question was if we didnt have the pot of money that youre looking at now to solve this crisis, how would we solve the crisis . Mr. Chairman, what were saying is that based on the laws that the congress has passed there are certain benefits we have to give to veterans and the budget has to match that. Without the choice act the budget clearly would not match the laws that we provide to veterans. Remember, as i said, only just about over a third of veterans are using the system and with every new 1 percentage point of veterans who enter the system were talking about 1. 5 billion. I think an incremental 1. 5 billion. I think the point you make on the hepatitis c drug is an important one. I talked about the length of budget cycles in the federal government. We started the appropriate appreciation for 2015 because its an advanced appropriation sometime around 2015. These drugs were invented between 2013 and 2015. I couldnt have been anticipated. We had two more hepatitis c drugs come out. How do we Work Together to create the flexibility in the budget cycle so that we can deal with incremental demand of veterans and new special causes like new drugs . And thats what were proposing to Work Together with you on. According to your staff the Veterans Health administration has taken a number of steps to curtail the shortfall, including revised guidance on the use of nonva care, halting all nonessential hires, purchasing and travel and pulling salary dollars for Medical Center can accounts. One area that i see that hasnt been looked at and that is the issue of bonuses. What is sacred about the bonus 350 million bonus pot that would prevent you from accessing that money and if you need flexibility we will be glad to give you flexibility to use that, too. Would you not look at every crevice possible . Mr. Chairman, you probably recall the meeting you and i had in your office where we went through the relative ranking and the accountability steps that weve taken within va. One of those steps as you may recall, is nobody in in the Veterans Health administration, nobody, is receiving a bonus for 2014. And also the relative ranking that we did of their performance, no one in the Veterans Health administration received an outstanding rating and i would deny you, as i did that day, to compare our relative rating, our relative performance rating, versus the relative performance rating of any other department of government and the best companies in the private sector because we were following the principles of the best companies in the private sector. And i appreciate the meeting that we had, the information you provided and my time has expired but i want to get for clarity, nobody within the veteran Health Administration is getting a bonus . No executive. Yes, sir. Theres a very distinct difference between executive and the line employee. I just wanted to make that clear. Ms. Brown. Thank you, mr. Chairman. First of all, let me just say that it was a beautiful services that we had here last week in the capital for the Vietnam Veterans and, you know, that glitter is very nice, i mean, they deserve it, but they also deserve the services. Now, i participated in every choice meeting, every conference, voted on it and the purpose of the choice was to provide Veterans Services to veterans, their care. Can you expound more on the flexibility that you need . Because when i think about it, i think about the gi bill. Veterans can go to any school that they want to, so the money follows the veterans. So can you expound on that flexibility that you need, that youve come to congress both openly and in private and explain to us that you need the flexibility. Yes, maam. Thank you ms. Ranking member. As weve said, there are about 23 million veterans in this country, only 9 million are signed up for our Healthcare System and probably only 6, 7 million use it on any given day. So theres an opportunity for every veteran to use our Health System and we would like that, but in order for that to happen weve got to have the flexibility to be able to deal with an influx of veterans as we improve care. One of the things that youre probably aware of is if you get your knee replaced with medicare it will cost you roughly 5,000, if you are a veteran and you get your knee replaced using the va you save 5,000. So to the degree we improve our system and we improve access to our system more and more veterans will enter the system. As we said earlier, every percentage point of veterans who enter the system is going to add another 1. 5 billion of cost. With 70 plus line items of budget where we cant move money interest one line item to another it distorts what we do. It causes situations like were this today and the whole purpose of the choice act was to improve care for veterans. The whole purpose of the choice act was to get veterans care in the community. What were talking about is a shortfall in care in the community. So it really defies my logic to understand why we cant use choice care money for care in the Community Since thats the reason it was appropriated. The money has already been appropriated, its sitting there, wed like to use it to care for veterans. As more veterans come into the system we want to care for them, too. One of the complaints or challenges is that you talked about Knee Replacement. So if someone goes into one of the Choice Programs for knee and the doctor determined that both knees need to be replaced, you condition do it based on exactly how the choice is working right now because that other knee has had to carry i mean, i know its getting technical can the medical person explain to me why . So i think if the veteran needs both knees replaced under the Choice Program they could get both knees replaced, it would require a second authorization for the second procedure that needs to be done. I think that the challenge for us is really, you know, the chairman asked, well, what would we do if we werent in the situation where we have the choice funds. And the fact of the matter is we probably this year would have done what we always have done, we would have managed to a budget, but we didnt do that this year. We managed to our requirement and that requirement was that no veteran would wait more than 30 days for care. And while we have worked very hard to make the Choice Program an option for that patient who needs that Knee Replacement the fact of the matter is today a lot of our care is going were buying it through mechanisms outside the Choice Program, but we are doing it so that no veteran waits more than 30 days for care. And then accessing the resources to be able to pay for that is, i think, our challenge today. My concern is those Community Programs that weve been working with for years, universities, other stakeholders. Whats happening to those programs . Because weve cut the uses of some of those programs because of the shortfall. We have curtailed the use of those programs for elective care today. Our interest is actually making Choice Programs the premiere program. To make that program the predominant way that we get care and we have worked very hard with both health net and triwest to get the 87,000 providers that we have used in the past, some of those are our academic affiliates, to sign up to be providers under the Choice Program. And for our academic affiliates we offer them both indirect and direct medical education overhead expenses and the reimbursement that they have negotiated with cms. Thank you. Thank you, mr. Chairman. Mr. Lamborn, youre recognized. Thank you, mr. Chairman. Thank you for having this important hearing. Secretary mcdonald, youve come in here basically demanding 3 billion or healthcare in large part shuts down on august 20th. And im just amazed that were in this position. Do you do you and your Leadership Team at the va have any accountability or any responsibility at all for this happening, and if so, how much . Well, of course we do. And as secretary deputy secretary gibson laid out in the last hearing on the same subject, just a few weeks ago, there are many reasons that we are where we are. And i think we all share some of the responsibility, including members of congress. We have a new program called the Choice Program, its hard to predict new programs, we have seven different ways of providing care in the community and at the time the choice okay. Excuse me, is sir, you want to interrupt . Yes. Let me interrupt because my time is limited. Weve described what the layout of the land is, you i was going to go through the reasons we are where we are and i was going to show you what accountability we have. Okay. Do you have any role in this . We all do. Is what im getting at. We all do. One of the first things you learn your first day at west point is to say no excuse, sir. One of the thing that baffles me is were dealing with a Computer System thats over 30 years old, called the fms system, its written on cobal which was a language i wrote in 1973. Weve got to change the Management System of the financials of this enterprise called the va. The problem that we have is when we benchmark private industry our it budget is about 50 of what a Healthcare System i. T. Budget is so weve got to fix that. At the same time weve got to improve our management of the Financial Systems and were going to work hard to do that. At the same time it would help us if we had flexibility rather than over 70 line items of different budget that we cant move around. See, my issue is that every time one of these problems comes up on an almost weekly basis it seems like this year, we want we hear pleas for more money or more flexibility to go forward but we never get to the bottom of what caused it in the first place. Thats what i and the rest of us are trying to get to the bottom of. I you want me to repeat my Opening Statement . I thought i was clear about what caused it. Last year you talked about Miss Management not giving veterans care, no you Miss Management is giving veterans too much care. No. No. No. Here is my here here is my real problem here. You say that on august 20th theres no other option for except for an emergency supplemental by congress, youre going to start closing down operating rooms, hospitals, clinics all over this country and theres and with a 60 billion healthcare budget out of 160 billion total budget theres no other way for you to see around this problem than to tell veterans they cant come into the operation room after august 20th. Sir, i didnt say that. I did not talk about a supplemental. What i talked about was using part of the 10 billion thats already been appropriated by congress for care in the community to pay for care in the community. Thats thats the lunacy of why were here talking about this. Were talking about using it to pay for care in the community. Mr. Chairman, i yield back. Mrs. Brownley. Thank you, mr. Chairman. Thank you, mr. Secretary for your continued leadership to right the ship here. I appreciate it very much. I do think that flexibility is part of the solution. Its not the panacea, but it is part of the solution. I think clearly we need to be more nimble to serve our veterans and to serve them appropriately, and the way they deserve it. Closing hospitals is not a choice as far as i am concerned. I think we have an i. T. System that cant track spending and cant reconcile a budget in a timely way, and i would argue and i think youve eluded to this in your testimony, but i would argue that, yes, there has been an increase in demand from our veterans, but i would also argue that the v. A. Is pushing more resources out the door than they have in the past. And thats a good thing. Because pushing more resources means that more veterans are being served and being served appropriately. I guess, you know, my question, you mentioned about areas that we need to improve upon, and you mentioned i. T. , were spending 50 of what private industry spends in their i. T. Systems, and better management, checks and balances. What are we going to do . I think before we need before we move forward in any way, shape or form, we need assurances these kinds of things are going to get fixed. We cant move towards flexibility and hope and pray the next time we will be better off. We need assurances that these are going to be fixed and we will know in a timely way where we are if we ask the question today, we know exactly where we are in terms of money that has been spent and what the balances are, so share with us the specifics and when you think these things are going to be fixed so that we dont approach another fiscal year with the same kind of calamity that we are facing today. Thank you, and i, again, want to reiterate, we do own these problems and want to fix the problems and i didnt want to give any different kind of impression with the questions, and it starts with getting the right people in place. As you know, we just got confirmed, mr. Laverne counsel who is the secretary for the office of information technology. She was the i. T. Leader for Johnson Johnson and dell, and i have been working to recruit her for many months, almost since the day i was confirmed. We have to get the right leaders in place, and i think we now have them. What we then need to do is benchmark other operations, which we are doing. In the case of the fms, the cobalt system i am talking about, we have to replace it and until we replace it we have to take brute force effort to make sure we are doing a better job of keeping track of the budgets and keeping you informed of them. One of the issues here was when you pass the choice act, you demanded in the choice act that we account for here in the community in a different way than we were doing it previously. You asked us to centralize that, and that change helped exacerbate this situation. Nevertheless, we tried through brute force to try and keep that accounting whole so that we could understand what was going on. But there is no question we have got to do a better job. Mr. Secretary, for me at least, i presume we have the right resources to find the people for the right job, and thats part of the solution. I have to say i dont have a lot of confidence having served on this committee now for 2 1 2 years that the v. A. You have not asked us for additional money for an i. T. System, yet. I assume that will come. And i dont have the confidence that within a year we will have a new i. T. System that provides tools that we would need to be able to have a timely data and timely information in terms of where we are. Is there something that you are working on specifically obviously, this is a high priority for us. Before we design an i. T. System to deal with seven different ways of paying for care in the community, we ought to Work Together as we talked about at the breakfast, to making one way to pay for it and making the i. T. System will be easier. Thank you, mr. Secretary for being here, and i guess my biggest problem, frankly, and i agree with having more flexibility in accounting, and nothing irks me more than seeing new windows put in a v. A. And we dont have other things, so i agree with that. I am concerned about the fact that we didnt know about this whole situation until, what, two weeks ago or less than that . We had mr. Gibson here, and all of a sudden its like a crisis. I think from my perspective i was kind of hoping that you would have a plan to reform the v. A. And, you know, make it, you know, all good, and you talked about some of that here, but i have not really seen you come out and tell me maybe the chairman knows something, but i dont know about the reform process going on. I am really disappointed in the 3 billion shortfall. Why didnt we know more about this in advance . What is the story with that . Why dont we know about it sooner . I want to draw your attention to this, we give you this on june 5th. It was about denver, about replacing the denver facility, but i thought it was important at the time we published this to give you a heads up on the work to reform the v. A. If you turn to the back of the book, the last 56 pages are all about the transformation of v. A. , and we have sat down with those members of congress who are interested and gone through the detail, and they happen to be mostly in the senate, but we would love you to take you through the detail, and we set up an Advisory Board that includes some of the most outstanding ceos in the country helping us, and every member on this committee has 56 pages of what is going on. Were happy to spend more time with you, and we would like you to be part of it and in fact we would like to have hearings talking about what we are doing to transform the future. Relative to the shortfall, our first knowledge of it was around the middle of may. At the time we had a meeting with the eight corners, both the senate and the House Appropriations and authorizing, and at that time we mentioned three issues, one was hepatitis c,