Veterans Affairs Secretary testified on capitol hill tuesday on the 2016 Veterans Affairs budget request. The proposed budget is 168. 8 billion, including funding to expand v. A. Care to veterans and transform the v. A. Into a customer centric department. This is about one hour and 15 minutes. Tom fuller was a vietnam veteran and the marines and presented himself to the heinz the a with chest pains and went to see the head of cardiology. He did not want to be at a whim loss record, referred him to the floor and there, tom expired of a heart attack. We want to make sure that kind of thing never happens to our veterans, that we have a confident and Strong Administration of people. Mr. Secretary, i have raised this issue a number of times. Behind that is the story of a cardiologist who witnessed this whole thing and felt there was an outright malpractice happening in this case. I know you have a 10 minute opening. Secretary mcdonald thank you mr. Chairman. I have a brief opening statement. I want to thank the chairman for his leadership on this subcommittee and i want to i want to welcome secretary mcdonald and thank you for your work as you appear before the subcommittee. Mr. Secretary, it is good to see you. Thank you for coming to montana. It was a great trip. Moving forward, i hope we can work closely together to address the issues raised during our trip and some of the issues that will be raised today. I have an impressed by your leadership, your candor, your willingness to accept responsibility and confront issues. The v. A. Is an agency under siege every day and you experience that every day. We have seen several scandals that have shaken the confidence of the v. A. And it has created mistrust with some of our veterans and created mistrust with some of our public. Restoring that trust is one of your tasks but a lot of that responsibility. Our shoulders. It is critical we provide you with tools we need to get the job done and i firmly believe we need to hold accountable those who would abuse their authority for personal gain. We also need to apply the dedication of the employees who come to work every day with the single goal of helping veterans whose lives they touch. Dedicating our time, it is not a recipe for reform or success and our veterans deserve more than that. At the end of the day, we are in this together. Americas veterans are entitled to a Health Care System and program that is superior to any benefits and for very good reason. The model of providing care to our nations veterans is something our veterans have come to rely on and is Something Congress has enshrined in law. We each have a responsibility here to sustain this model of service. The v. A. Must improve its delivery of service to veterans and Congress Needs to step up and fulfill the responsibility to fully fund the v. A. s model of service. I want to thank you again, mr. Secretary for testifying before this subcommittee and i look forward to your testimony. Secretary macola secretary mcdonald thank you for the opportunity to discuss the v. A. s 2016 and 2017 advanced appropriations request and budget. We appreciate your steadfast basher steadfast report for veteran services organization. As v. A. Moves from a serious crises, we have a critical opportunity. We intend to take full advantage to make v. A. A model agency and an experience comparable to the best private sector businesses. Currently, a million veterans arent rolled and use at least one service. The cost of the filling obligations grows over time because veterans demand continue to increase. In 2014, 40 years after the war ended, 22 of Vietnam Veterans were receiving serviceconnected disability benefits. We expect that percentage to continue to increase. From 1960 two 2000, the percentage of veterans receiving v. A. Compensation was about 85 . In the last 14 years, that has more than doubled to 19 . In 2009, vba completed about 980,000 claims. In 2017, we project we will complete over 1. 4 million claims , a 47 increase. There has been a huge growth in the number of medical issues in claims and a projected 5. 9 million in 2017. Thats a 150 increase over just a years. From 1950 to 1995, the average degree of disability among veterans was 30 . Since 2000, it has risen to 47. 7 . While the total number of veterans is declining the number of those seeking care and benefits is increasing due to more than a decade of war, agent orange related claims, and unlimited appeals process increased claims issues, far greater survival rates of the wounded and more sophisticated medical treatments. It is important to understand why. The most important consideration is an aging veteran population. 40 years ago, 2. 2 million veterans were 65 or older. Thats 7. 5 of the population. In 2017, we expect 9. 8 million will be 65 years or older 46 . We now serve and older population with a greater demand for care more chronic conditions, and less able to afford private sector care. As veterans see positive changes at the and as the military downsizes, those choosing v. A. Will continue to rise. We are listening hard to veterans, congress, employees and vs owes tell us, vsos tell us, making veterans the center of everything we do. We call it my v. A. My v. A. Focuses on five objectives to revolutionize culture and focus on veterans outcomes rather than internal metrics. First, improving the veteran experience so every veteran has a seamless integrated, and Responsive Customer Service experience every single time. Second including Employee Experience by elevating barriers to Customer Service and focusing on our people and culture to better serve veterans. Third, improving our internal support services, fourth establishing a culture of Continuous Improvement to identify and correct problems and replicate solutions at all facilities. And last, enhancing strategic partnerships. We cannot do this by ourselves. Strategic harder to become critical. Organizing the department geographically is the first that to achieving this goal. In the past and the v. A. Had nine disjointed geographic structures. Our new organizational framework has one National Structure with five districts, aligning the as disparate organizational boundaries. Veterans will see one v. A. Rather than multiple disconnected organizations. Last, my v. A. Is about ensuring sound stewardship of taxpayer dollars. We will integrate systems to make sure of operational efficiency, but we need congressional help. No business would carry such a portfolio. It is time to close substandard and underutilized facilities. 900 v. A. Facilities are over 90 years old. More than 1300 are over 70 years old. V. A. Has 336 buildings vacant or less than 36 occupied. Thats 10. 5 million square feet of empty space costing 24 million annually. We can use these funds to hire 200 registered nurses fouryear. Pay for 144,000 primary care visits for veterans or support 900 nursing days for veterans. In the long term, they will enable us to better ernst services. Our 2016 budget request allows us to continue transforming under my v. A. It requests 168. 8 elliott dollars. 95 . 3 billion in mandatory funds. To continue serving a growing number of veterans receiving care and benefits. The Research Required in the budget request are in addition to those congress provided in the veterans choice act. We dont know how many veterans will use it for nonv. A. Care. We do know a recent decision to change the definition of the 40 mile provision of the act from Straight Line to road distance will approximately double the number of veterans eligible for care under the act. As secretary sloan gibson testified last week, we proposed the funding of our denver hospital by requesting funds from the act. The denver project has a long history. While poor the a project and contract management contributes to problems, decisions made years ago brought us to this point. The significant increase in the cost of the project results from four factors first not locking down design early in the process. Second, some design aspect that added cost. Third, increases to Construction Cost of the denver market while we have not negotiated a firm target price and fourth, premiums paid to contractors for perceived risk due to problems with the project. We have learned from these past mistakes and we are taking meaning full corrective actions to improve performance. Among those are requiring Major Construction projects to achieve at least 35 design prior to cost and schedule information. Second implementing a deliverables control process. Any changes in scope or cost will be approved by me. Third, institutionalizing a project review board similar to what the core of engineers District Office uses. Conducting preconstruction reviews of Major Projects and fifth, integrating medical planners into the Construction Team rum contract through activation. Those measures will help us in the future but they will not finish denver. After analysis by the corps of engineers, we inform the committee the total estimated cost will be 1. 73 billion. An increase of 930 million and additional funding of 830 million. We believe requesting funds from the choice act is the best approach. Now we must work with this committee to secure the funding. Last, if the president s budget request is cut by a 1. 4 billion imposed by your colleagues in the house, those reductions would have these effects it would cut veteran care by 690 million, the equivalent of over 70,000 fewer veterans receiving v. A. Medical care compared to the president s request. It would eliminate the funding for four Main Construction requests. It would reduce the v. A. Possibility to provide additional Outpatient Services and will impact the following projects the planned rehab therapy building in st. Louis missouri, the initial phase of the alameda, california event. Construction of the french Camp CaliforniaCommunity Based clinic. The replacement 155 bed Community Living center in carry point, maryland. It would eliminate funding for cemetery Expansion Projects in st. Louis, portland, riverside and pensacola and a new column in alameda reducing our ability to provide burial honors for as many as 18,000 veterans. It is unacceptable to me, and i know its unacceptable to members of congress. Chairman Ranking Member, members of the committee, thanks again for your support for veterans and for working on these budget requests. We look forward to your questions. Thank you, chairman. On denver, id ask unanimous consent if i can put in a statement that Cory Gardener gave us on this issue. So at 1. 173 billion, the denver hospital would take up so much money, it would fund Missile Defense for 7. 9 years. In the case of it would also take up four years of mill con for special operations. Thats a big hit. I would add to your list of things that were done wrong in denver, is that you didnt have the army core of engineers overseeing the construction of the facility. I want to make sure by june 1st, you have already done that. Mr. Chairman, weve already done it as of today. I mean, the core of engineers is active on the ground. Were working with them in concert. We continue to want to use the core of engineers in other Major Projects. May i make a statement, mr. Chairman . This is not really a hospital. Its a medical complex. This is what the complex looks like. As you can see, its many buildings. Its not one building. Its very close to the university of colorado medical school, who is a partner of ours. So this is a major undertaking of many buildings, not just one hospital. Just wanted to be clear on that, sir. I would say that your proposal has been to take 1 billion from the care act to sink into this thing. That would eliminate about 20 of the care act money. The promise weve already made to american veterans, we dont want to go back on that promise because of the mismanagement of the denver facility. We need to have the people involved with this fired and no longer a part of the payroll. The gentleman in charge of construction at v. A. Is no longer with us. We conducted an administrative investigation no longer with us, meant he quietly retired. Hes collecting from the taxpayer . He retired the day after the interview he had. To the best of my knowledge, both in the private sector and the public sector, it is impossible to claw back a retirement, unless malfeasence is proven, and the investigation is ongoing. We had evidence of a whistleblower who sent an email very early on and said this project is likely to go 500 million over budget. That whistleblower was fired by the v. A. Because of that email. We want to make sure this process of nailing whistleblower is wiped out in the v. A. How would we have that happen . Im not familiar with the situation youre describing. I would love to be able to get more information on that and follow up. We have been working with the office of special council to make sure all of the whistleblowers who have been retaliated against let me get it for the record. The person youre talking about was glenn hegstrum. The person saying we would go 500 million over budget was delano grosby. That person was let go and turned out to be exactly correct on all of our warnings to v. A. We have said its unacceptable to retaliate against anyone who is criticizing our operation. In fact, we believe, we want employees to help us improve our operation. Weve worked with the special council to get certified in our activities around whistle blowers. We have reinstituted several whistle blowers to new jobs. We celebrated with a national award. Retaliation. Its unacceptable. I want to make sure we dont wipe out the cares money for the overrun in denver that we standby our veterans there. We just dont know how much of the care money would be used. I understand if we wrap up the denver situation that caused costs are 3 million a month to maintain that. Do you understand that to be true . We dont have that, but well check on it. Let me go to mr. Tester. Thank you, mr. Chairman. Everyone knows how important this committee is to our veterans in this country and how we need to do a job together. You team in a below the request. And they achieved this largely by freezing the Major Construction level of fy 15 levels. There have been a lot of folks that have criticized the v. A. For not being frank about what you need for money. A lot of criticism was warranted led to funding shortfalls and subsequently had to be addressed through emergency legislation such as choice act. And now, a lot of the folks who demanded from you are the same folks that refused to give you the resources you need to achieve the results our veterans need when they come to see you. Is it fair to say that this is inadequate . As i said in the Committee Meeting budget, we put in this budget knowing it was going to be tight versus the demand we faced. You are looking to be in money if we want to flexibility to money. We cant predict whether veterans are going to go for Community Care with a choice act or whether theyre going to go with v. A. Care. Because of the way the budget is formed, i dont have the flexibility to move money where the veteran goes. Are you getting more demand on your facilities . Ini to me with that 1. 4 billion spending the cash would be the spending cut means that and less veterans are going to are in a get care its been cut by the equivalent of 70,000 veterans receiving v. A. Medical care. We wont have the money to care for them. We have given increased funding and mechanism to address Workforce Shortage in the v. A. We could be losing ground. Not only attracting new physicians and medical personnel. The v. A. Needs the authority to let them do their jobs and then crushing the ability to address the Workforce Needs we have in montana. Who are doing their job, working with the veterans. Even if it means less pay and longer hours. To what extent has this impacted your ability to recruit to the v. A. . Well, senator tester, as you know, ive been to over a dozen medical schools and talked to candidates to become nurses and doctors at the v. A. And the has affected the perception on the v. A. We have increased the salary bands of our doctors. We are looking at competitive pay of providers within our system. We have hired more doctors. We currently have hired over 800 more doctors, over 2,000 more nurses. And we have opened new facilities. We opened about 17 new facilities a year. But the demand as youve suggested has increased. Weve gone from roughly 4 million outpatient patients to nearly 6 million. And that demands going to increase as we continue to improve the system and improve our Customer Service. And weve not even seen the full effect of the iraq and afghani wars yet and the veterans who fought those wars. We have to build a capability today to be ready for five years, ten years, 20 years from now. And thats what our plan does. Ill talk more about those capabilities next round. Let me add on to that. I understand that glenn hegstrum, responsible for the debacle in denver got a 60,000 bonus according to senator gardner. And if were giving big bonuses like that, how can we ever take care of veterans . I believe that bonus was for 2013 or before. And not for recently. Weve got the administrative investigation going on. And as we get to the bottom of this, we will figure out what the appropriate action is. Mr. Boseman. Thank you, mr. Chairman. And i agree with the senator from montana. The vast majority of the v. A. Personnel are doing a great job working very, very hard. I think the thing that shows that is how few have actually accessed the program that we were trying to stand up so theyll have to travel. You know, many of them are traveling even though they can stay home. But its hard. Im going to bring up an issue that was before your time. Yet, it is hard in the sen