Remarks by Secretary Robert A. McDonald - Office of Public and Intergovernmental Affairs
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Office of Public and Intergovernmental Affairs

Remarks by Secretary Robert A. McDonald

The American Legion’s 97th Annual National Convention
Baltimore, MD
September 1, 2015

Mike, thank you for the introduction and for your leadership of the American Legion.

Let me also acknowledge Dan Wheeler, Verna Jones, and the other members of the Legion’s leadership team.

Fellow Veterans, ladies and gentlemen:

Working at VA is a higher calling. We have the best, most inspiring mission in government—to care for those who have “borne the battle” and for their families and survivors. And we have the best, most deserving clients in the world.

Recently, some people in Washington have begun to question the need for VA. One thing I’ve learned since my confirmation as secretary is, there is no substitute for VA: Veterans need VA, American medicine needs VA, and Americans everywhere benefit from VA.

What’s so special about VA healthcare?

VA’s healthcare system is supported by three pillars—a unique system that depends on the strength inherent in all three of these areas:

  • Research
  • Education & Training
  • Clinical Care

VA researchers have made major contributions to medical science, earning three Nobel Prizes, seven Lasker Awards, and many other awards and recognitions. Among our achievements:

  • The implantable cardiac pacemaker, the first successful liver transplants, and the nicotine patch to help smokers quit;
  • Multiple advances in prosthetics, in identifying genetic risk factors for numerous diseases, and in treating Spinal Cord Injury (SCI) at the Bronx VA.
  • Groundbreaking strides in treating the signature wounds of today’s conflicts—PTSD and TBI.

We’re affiliated with over 1,800 educational institutions and train 120,000 healthcare professionals a year: 62,000 medical students and residents, 23,000 nursing students, and 33,000 students in other health fields.

An estimated 70 percent of all U.S. doctors have trained with VA, and we’re the largest employer of nurses in the Nation.

Last year, we completed over 55 million appointments for 6.6 million unique patients. We’re a national leader in telehealth services, caring for 700,000 Veterans through over 2 million telehealth visits in FY 2014. We’re also a national leader in reducing MRSA infections—down 68.6 percent since 2007, compared to 30 percent for non-VA hospitals.

Since 2004, the American Customer Satisfaction Index has shown that Veterans give VA health care higher ratings than patients at most private hospitals.

VA researchers continue to receive awards for excellence, like the ones you see here. Take a look at the second bullet: Twenty-six years ago, Drs. Bill Bauman and Ann Spungen teamed up to find out how spinal cord injuries caused many parts of the body to function poorly. In 2001, they established the National Center of Excellence for the Medical Consequences of Spinal Cord Injuries, where they and others have worked to improve the quality of life in paralyzed Veterans. Last year, they were honored with the Samuel J. Heyman Service to America Medal.

VA does face some serious challenges. The Veteran population is aging: In 1975, there were about 2 million Veterans 65 or older. In 2017, there will be almost 10 million—46 percent of Veterans will be 65 or older.

Simultaneously, the number of claims and medical issues in claims soared. As this chart shows, in 2009 VBA completed almost 980,000 claims. In FY 2017, we project we’ll complete over 1.4 million—a 47 percent increase.

But there’s been more dramatic growth in the number of medical issues in claims—2.7 million in 2009, and a projected 5.9 million in 2017, a 115 percent increase over just eight years.

These increases were accompanied by a dramatic rise in the average degree of Veterans’ disability compensation. For 45 years, 1950 to 1995, the average degree of disability was 30 percent. Since 2000, the average degree of disability has risen to 47.7 percent, as this chart shows.

The percentage of Veterans receiving VA compensation follows the same pattern. From 1960 to 2000, it was stable at about 8.5 percent. But in just 14 years, since 2001, it has more than doubled, to 19 percent.

So, while it’s true that the total number of Veterans is declining, the number of those seeking care and benefits is increasing, fueled by—

  • the aging Veteran population,
  • more than a decade of war,
  • Agent Orange–related claims,
  • an unlimited claims appeal process,
  • increased medical claims issues,
  • far higher survival rates of the wounded, and
  • more sophisticated methods for identifying and treating Veterans’ medical issues.

Veterans’ demand for services and benefits has exceeded VA’s capacity to meet it. It’s important that Congress and the American people understand why that is happening.

Compounding the problem, VA is saddled with some seriously aging infrastructure: 900 VA buildings are over 90 years old; more than 1,300 are over 70; 60 percent are over 50.

These older buildings don’t meet today’s standards for hospital construction and need to be replaced with new buildings. The Independent Budget, produced by the VSOs, estimated that closing the Major Construction gap will take $19 billion to $23.3 billion over the next 10 years.

Here’s an example: This is an actual building owned by VA in Minneapolis, built as a gas station in 1932. We wanted to tear it down and build a homeless shelter on the site, but the building’s supposed historical value has made that difficult to do, so it’s still standing. VA currently has 336 buildings vacant or less than 50 percent occupied—10.5 million square feet, costing about $24 million dollars annually.

VA is committed to delivering timely, high-quality healthcare to our Nation’s Veterans. We know we still have too many Veterans waiting for care, but we’re now providing more care for Veterans than ever before, both inside VA and outside VA.

To meet the immediate demand for access, we have—

  • Extended hours: 880,000 appointments completed during extended hours (evenings and weekends).
  • Activated 80 buildings to add 1.3 million square feet to our healthcare footprint, plus another 420,000 square feet in VA-owned properties.
  • Stepped up recruiting of new personnel: 38,000 hired in the past 10 months, for a net increase of 12,000 VHA employees, including: 1,000 more physicians, 2,700 more nurses.
  • Issued over a million more authorizations for Care-in-the-Community—a 41 percent increase.

Speaking of Care in the Community, VA has been referring Veterans to Care in the Community for decades whenever it made sense for Veterans—and we’re not opposed to making greater use of Care in the Community to meet the access challenge.

But we know that many Veterans prefer VA healthcare. In fact, a March survey of Veterans found that 47 percent offered Choice elected to wait to get their care inside VA, 78 percent were satisfied with their VA care experience, and 82 percent would recommend VA care to fellow Veterans.

One more thing to keep in mind: Most Veterans already have a choice—78 percent have either Medicare, Medicaid, Tricare, or some private insurance.

Many come to VA because of the disparity in out-of-pocket costs between their insurance and VA care. For example, VA provides the best hearing aid technology anywhere. Medicare doesn’t cover hearing aids, and most insurance plans have limited coverage, at best. So choosing VA for hearing aids saves Veterans around $4,200.

We are providing regular updates of patient access data, so you can see how well we’re doing. No private health system is doing this. No private health system wants to be measured by appointment wait times. It’s not an accepted industry practice, but we’re doing it.

Here are the results:

  • 7 million more appointments completed in the past 12 months—2.5 million at VA, 4.5 million in the community.
  • 97 percent of appointments are now completed within 30 days of the Veteran’s preferred date; 87 percent are within 7 days; 22 percent are same-day appointments.
  • Average wait time for completed appointments: 4 days for Primary Care, 5 days for Specialty Care, and 3 days for Mental Health Care

More progress:

  • 12 percent increase in after-hours and weekend appointments,
  • 19 percent increase in tele-health,
  • 36 percent increase in e-consults,
  • 36 percent increase in the number of Veterans receiving Care in the Community,
  • 47 percent reduction in the Electronic Wait List, and
  • 93 percent reduction in the New Enrollee Appointment Requests (NEAR).

Overall, our physician productivity has increased 8 percent—on a healthcare budget increase of just 2.8 percent. So you see, we’re working harder and smarter—and the result is more care for more Veterans.

Of course, health care is just one of nine VA lines of business. Other lines include life insurance, mortgage insurance, pensions, disability compensation, memorial affairs, and education.

We’ve got reasons to be proud in those areas too:

  • We guarantee 2 million home loans—with the lowest foreclosure rate and highest satisfaction rate in mortgage lending.
  • For the past decade, the American Customer Satisfaction Index has ranked our cemetery system the top customer-service organization in the Nation, public or private.
  • In the past two years, we’ve cut the disability claims backlog by 84 percent. It peaked at 611,000 claims over 125 days in March 2013. Just last week, it dropped to less than 100,000 claims—the lowest it’s ever been in VA history.
  • Accuracy has also improved—from 83 percent in 2011 to 91 percent today—and Veterans are waiting much less time for pending claims. In March 2013, the average wait was 282 days. Today, it’s just 105—a 63 percent decrease.

How did we get there? We fielded a new electronic system for handling claims, we hired more claims staff, and we’ve had them working mandatory overtime for much of the past four years.

The mandatory overtime can’t go on forever. To keep the backlog down, we need to right-size our claims staff, which will require more funding. If we don’t fund to requirement, we can’t be expected to meet our requirements.

As you see here, we’ve also made a substantial dent in Veterans homelessness, which has declined 33 percent from 2010 to 2014. Ending homelessness is a local effort, so we’re working with over 2,000 partners all over the country.

Of course, to meet the challenges of the 21st century, VA will need adequate funding. The President’s 2016 budget request will provide the funding we need: $168.8 billion—$73.5 billion in discretionary funds, and $95.3 billion in mandatory funds for benefits programs.

The discretionary request is an increase of $5.2 billion (7.5 percent) above the 2015 enacted level, providing resources to continue serving the growing number of Veterans seeking care and benefits.

But if the President’s budget request is cut by $1.4 billion, as the House has voted to do, here’s what it would mean if we applied the cut across the board:

  • $688 million less for Veterans Medical Care—the equivalent of over 70,000 fewer Veterans receiving VA medical care.
  • No funding for four Major Construction projects and six cemetery projects.
  • The House would inhibit hiring and retention of the best people by limiting the right of employees to appeal adverse actions and by prohibiting performance awards and bonuses for Title V SES and other employees;
  • The House would also deny VA the long-term budgetary flexibility needed to serve Veterans the way they want to be.

Budget flexibility is extremely important. Demand for VA care is rising, for reasons already mentioned. Veterans are turning to VA for more and more of their care. Not for all of their care: On average, enrolled Veterans rely on VA for just 34 percent of their care. But if that percentage rises just one point, to 35 percent, our costs increase about $1.4 billion.

Congress acted to avert an end-of-fiscal-year crisis by giving VA limited flexibility to use Choice Act funds to cover a shortfall in funding for Care-in-the-Community. But that flexibility only lasts until the end of this fiscal year—September 30. To accommodate present and future changes in demand for care, VA needs permanent flexibility to move funds among our many accounts.

VA is committed to making the Choice program work. Here you see our progress in the use of Choice authorizations for eligible Care-in-the-Community. Choice doesn’t cover everything, but for what it does cover, authorizations are now over 50 percent. But we still need Congress to fully fund the President’s 2016 budget request. And we need Congress to give us the permanent flexibility to move funds to where it’s most needed, based on the choices Veterans are making.

I mentioned earlier that some people in Washington are questioning the need for VA. Others have attempted to squeeze the needs of Veterans within a “sequester” budget that artificially constrains the budget regardless of what it means to the programs we are trying to operate with VA and across the government.

All of this—the lack of flexibility to give Veterans real choice, the cuts, the discussions about whether veterans actually deserve a medical system to call their own—leads to the same place. A place where the needs of Veterans are secondary to ideology, scoring political points, and short-sighted budget policies. A place where VA is set up to fail. A place where there are no winners, and Veterans, who have sacrificed so much for much nobler purposes, are the ones left suffering.

That is unacceptable to me, and should be unacceptable to anyone who claims to actually care about the sacred responsibility that we as a Nation have to care for those who have borne the battle. That’s why I’m here. That’s why you are here. And that’s why we need to press forward in putting Veterans first.

We are listening hard to what Veterans, Congress, employees, and VSOs are telling us. What we hear drives us to a historic, department-wide transformation, changing VA’s culture, and making Veterans the center of everything we do.

We call it MyVA, and it entails many organizational reforms to better unify the Department’s efforts on behalf of Veterans.

  1. Improving the Veteran experience to be seamless, integrated, and responsive
  2. Improving the employee experience, focusing on people and culture to better serve Veterans
  3. Improving our internal support services
  4. Establishing a culture of continuous improvement
  5. Enhancing strategic partnerships

The key to improving the Veterans’ experience of VA is a customer-service approach. I call it the Platinum Rule. You’ve heard the Golden Rule—Treat others as you want to be treated. The Platinum Rule is—Treat others as THEY want to be treated. Their perspective is what counts.

From their perspective, we’ve already taken several MyVA steps to improve the Veteran experience. Here you see a few examples.

We’ve also brought aboard several key leaders with broad experience in business. Eleven of my 18 direct-reporting senior executives have joined VA since my swearing-in, and the entire leadership team is as committed as I am to making VA No. 1 in customer service.

There’s so much more I could tell you about if we had time—more that we’ve accomplished and more we will accomplish in coming months.

We’re listening to Veterans more, we’re listening to employees more, and together we are making lasting improvements at VA, so that in the future Veterans will say with pride, “That’s my VA.”

But we need the continued support of Congress, Veterans, VSOs, and the American people to make the necessary changes to keep moving forward.

God bless our Veterans, and God bless the American Legion.

Thank you.