TESTIMONY OF THE HONORABLE R. JAMES NICHOLSON
SECRETARY OF VETERANS AFFAIRS
BEFORE THE
COMMITTEE ON VETERANS AFFAIRS
HOUSE OF REPRESENTATIVES

September 18, 2007

Mr. Chairman and Members of the Committee:

I want to thank you for holding this hearing and giving me the opportunity to discuss the current state of the VA.

It has been a real honor to serve the President and our nation's veterans as the Secretary of Veterans Affairs these past 32 months.

My own military service and tradition go back a long way.

I graduated from the United States Military Academy and served eight years on active duty as an airborne, Ranger, infantry officer, to include a tour of duty in Vietnam. I then continued my service as a member of the Army Reserve, retiring with the rank of Colonel. My father was an enlisted man in the Navy during World War II. My father-in-law served in both World War II and Korea. My brother, Brigadier General Jack Nicholson, served 30 years in the Army. My son is a veteran, and four of my nephews are Colonels in the Army and Air Force.

I have a particular affinity for the young men and women currently serving in the Global War on Terror. They are my heroes.

Mr. Chairman, you and I returned from a trip to Iraq and Afghanistan only a couple of weeks ago. We had an opportunity to see the conditions under which these young men and women must operate. We had an opportunity to speak with the troops as well as to their leaders. What we both saw was the most impressive group of Americans - a group of heroes that makes all of us proud.

They know their mission and their jobs. They are motivated. They are all volunteers. They are young, bright, and speak eloquently of their patriotism and of how they see the importance of their own roles in the war we are fighting today.

That trip -- and others I have taken to the region, one with Ranking Member Steve Buyer -- renewed my own commitment to assure that, should any harm come to those fine young men and women, we at the VA would do everything in our power to meet their needs and those of their families. We can do no less. They have earned that.

Mr. Chairman, today I would like to give you my current assessment of the VA, review our initiatives and accomplishments, and discuss remaining challenges. My emphasis will be on the transformations we have achieved, especially with respect to Operation Enduring Freedom (OEF) and Operation Iraqi Freedom (OIF).

My assessment that VA is, quite possibly, the best health care system in the world, is borne out by a number of reports in the popular press. Most recently, a book, Best Care Anywhere: Why VA Health Care is Better than Yours, by Phillip Longman, a Senior Fellow at the New America Foundation, addresses how the VA system of health care progressed to its present model of excellence repeatedly demonstrating the highest quality care in America.

The VA is an immense institution. Not only does it provide health care to enrolled veterans, but the Veterans Benefits Administration ( VBA) administers a number of monetary benefits, to include various educational benefits, home loan guaranties, a number of life insurance programs and a vocational rehabilitation and employment program.

VBA also administers the veterans' pension system and the disability compensation system. Approximately 800,000 claims for disability benefits are filed each year. Claims for disability compensation, more than half of which are reopened claims seeking an increase in percentage of disability, present complex issues of service connection, effective date and degree of disability.

For the veteran or his family unfamiliar with the legal and regulatory structure that defines this benefits system, navigating it can be a challenge. To assist them VBA operates an extensive public contact and outreach system. During 2006 alone, VBA public contact staff handled nearly seven million phone calls from veterans and their families with questions concerning benefits, and we conducted more than a million interviews.

Over the last four years, VBA military services coordinators conducted more than 28,000 briefings attended by more than a million active duty and reserve personnel and their family members. Additionally, through the Benefits Delivery at Discharge Program, service members at 140 military bases in the United States, Germany and Korea are assisted in filing for disability benefits prior to separation.

Advisory Committee on OEF/ OIF Veterans

In April of this year, I created a new Advisory Committee on OEF/ OIF veterans and their families to advise me on ways to respond to their unique needs and to improve programs serving those veterans, their families and their caregivers.

The Committee is composed of such veterans, their survivors and their families, all of whom have unique insight into just how VA is responding to their needs. We have learned that, in many instances, we were not as sensitive to those needs as we could have been - and we have tried to adjust, while at the same time caring for veterans of different wars and different eras. The Committee will continue its work in the months and years ahead, will monitor how VA is doing, and, when we can do better, will point that out to VA leadership.

OEF/ OIF Priority

My heart has gone out to service members or veterans who seem to have slipped through the cracks after their injuries. This hasn't happened often, but one anecdote about such an occurrence is one too many. It is tragic when a service member or veteran has been injured and disabled and is unable to obtain the monetary benefits he or she is entitled to and, more significantly, needs them to support themselves or their families.

Because of the unique and immediate needs of this particular group of veterans, I directed the Veterans Benefits Administration to give priority to OEF/ OIF veterans who may apply for disability compensation or a veteran's pension. These claims are now being processed on an expedited basis.

TBI, PTSD, Vet Centers

The Improvised Explosive Device, or IED, is the signature weapon of the war as it is being fought in Iraq and Afghanistan. Regrettably, it has given rise to what has been referred to as the signature injuries of this war, Traumatic Brain Injury, or TBI, and Post Traumatic Stress Disorder, or PTSD.

I have directed that each of our veterans of the Global War on Terror who comes to VA for any kind of care be carefully screened for brain damage or PTSD. TBI can be particularly insidious and could go untreated without this screening.

Post traumatic stress disorder is different from TBI, although the two can coexist. In addition, adjustment reactions also seen in our returning heroes has been described as a normal reaction to an abnormal situation - which is combat.

The stress of the type of warfare our service members are experiencing, coupled with the fact that they are redeploying with their units multiple times, can sometimes give rise to one or more mental health diagnoses such as PTSD, substance abuse, depression, or anxiety.

When caught and treated early, the veteran may return to a lifestyle that is mentally healthy. Helping each of our patients to get better is what VA should be doing, and this applies to mental illness as well as physical injury.

VET Center Program

One venue for providing support for veterans with readjustment issues is our VET Center program. Across the country, there are 221 VET Centers with eleven new Vet Centers planned for opening in fiscal year 2008, each staffed with professionals who provide no-hassle counseling to veterans and their families.

VA has recently hired 100 new Outreach Coordinators to provide services to returning OEF/ OIF veterans. These Outreach Coordinators are OEF/ OIF veterans themselves. They understand that group of veterans and can relate directly to them. These new coordinators are located in VET Centers throughout the country, especially near our military processing stations.

Some 750,000 service members from the Global War on Terror ( GWOT) have now separated from active duty. To date over 250,000 have sought health care through the VA, something they are entitled to for two years after separation from the service, irrespective of whether they have been injured or incurred an illness while on active duty.

Of course, if they have sustained any service-connected injury or illness, the VA will treat them indefinitely. These young men and women join the 7.6 million (2nd Quarter, 2007) already enrolled for their health care in the VA health care system.

Health Initiatives

I was stunned to learn when I arrived at VA that some 25% of the veterans we care for suffer from adult-onset Type II diabetes. That is a disease often associated with obesity. Diabetes is a disease that can lead to complications which, in time, can result in blindness, renal failure or amputations.

Because of the seriousness of a diabetes diagnosis, I commenced a major campaign to reduce the high rate of obesity and diabetes in veterans. Essential to this is eating more healthy meals and exercise and, since launching that initiative, every veteran participating has been given a pedometer and encouraged to walk 10,000 paces each day. Should they do so, I know we will see a much healthier, fitter veteran in and around our various facilities.

A major health issue in the United States is the increasing incidence of Methacillin Resistant Staph Aureus ( MRSA). VA's Pittsburgh VAMC introduced an initiative to reduce MRSA. They found that by isolating patients who were carrying the bacteria as well as by scrupulously washing and sanitizing your hands, MRSA was virtually eliminated.

The Pittsburgh program was originally intended as a pilot which, if successful, would be rolled out slowly across the country. Because of its success, I launched a national effort in the Veterans Health Administration to eradicate staph infections in all VA hospitals. VA has served as a model for the country with this initiative.

There is a shortage of nurses within health care in America. VA feels this throughout the VHA system where recruitment and retention of nurses is a tremendous challenge. In an effort to ameliorate this situation, VA recently created a new multi-campus Nursing Academy through partnership with the nursing schools throughout the country.

It is my hope that, having done a substantial portion of their training at VA health care facilities, these nurses will see VA as a desirable employer, affording competitive pay and benefits and boasting a noble mission of caring for America's veterans, and that they will remain with VA as a career.

Paradigm Shift

Over the years, there has been a radical change in the way health care is delivered. At one time, individuals who were ill went to a hospital and, more often than not, they stayed there for many days. That is no longer the case. Today the best medicine involves getting you into - and out of - a hospital as quickly as possible.

Many procedures which once required hospitalization are today done on an outpatient basis. VA now has nearly 900 outpatient clinics (including community-based outpatient clinics, or CBOCs, hospital-based outpatient clinics and outreach clinics.) During my tenure, I approved 82 new CBOCs to bring VA's top-notch care closer to veterans who have earned it through service to their country.

Electronic Medical Records

Among the things that make this system of health care so effective is the Veterans' Health Information System of Technology Architecture (VistA), the nationally recognized Electronic Medical Record, so widely utilized throughout the VA.

An enrolled veteran can be treated at any one of the points of access to our system and all of his or her relevant health information will be available to the treating health care team. This capacity was particularly valuable during Hurricanes Rita and Katrina when, because of the flooding along the southeast Gulf Coast, it was necessary for us to evacuate 2,830 patients to nine VA and two Department of Defense ( DoD) Federal Coordinating Centers.

Approximately 150 veteran patients alone were evacuated from the New Orleans VAMC. Because of VA's electronic health records, all relevant information about those veterans was available to the receiving VA hospital. Harvard University has twice recognized VA for its electronic health record with its award for innovation in health care.

Let it also be noted here that many of the health care providers evacuated with their patients, even though they themselves lost everything in the flooding that occurred after the levees gave way. I was truly moved by their heroic commitment to their veteran patients.

Research

I recognize VA's prominent role in medical research. I created a Blue-Ribbon Genomic Research Advisory Committee to earn the trust of veterans and the community as we develop our program to advance the science of personalized medicine. This will enhance our ability to prevent disease before it emerges and enable us to design treatments to restore health and function for our veterans.

VA investigators led the way in developing the cardiac pacemaker, pioneered concepts that led to the development of the CAT scan, improved artificial limbs and helped develop a vaccine for shingles. VA investigators are distinguished among the best in their field with six Lasker Award winners and three Nobel Laureates, including: Dr. Ferid Murad for his contribution to understanding the role of nitric oxide in the body, including regulation of blood pressure; Dr. Andrew Schally for his discoveries concerning peptide hormone production in the brain; and Dr. Rosalyn Yalow for her work with radioisotopes, leading to the development of modern diagnostic assays.

Mental Health Initiatives

Of late, DoD has released alarming statistics about the number of service members who have committed suicide this past year. According to a recently released Associated Press article, last year the largest number of suicides of active duty Army service members occurred in the 26 years that that statistic has been maintained.

Because of suicides among the veterans for whom we care, I directed the hiring of suicide prevention counselors at each of VA's 153 hospitals. This was intended to strengthen one of the nation's largest mental health programs. I also directed the establishment of an around-the-clock, national suicide prevention hotline.

The hotline became operational in July of this year and received its first call on July 25. Since that time and through September 1, as a result of calls to the suicide prevention hotline, 346 callers were referred to a VA suicide prevention coordinator, 194 warm transfers were made to community hotlines, and there were 56 rescues.

Reform Initiatives

Following the disclosure of substandard conditions for the medical hold detachment outpatients at Walter Reed Army Medical Center, the President appointed me to lead the Cabinet level Task Force on Returning Global War on Terror ( GWOT) Heroes to improve the delivery of Federal services and benefits to GWOT service members and veterans.

The charge to the Inter-Departmental Task Force composed of my colleagues from DoD, Health and Human Services, Department of Labor, Housing and Urban Development, Education, Small Business Administration, Office of Personnel Management, and the Social Security Administration was to review existing authorities and provide recommendations as to how these service members can be better served. We did that and, after 45 days of deliberation, submitted a list of 25 recommendations to the President. We are monitoring those, keeping track of their implementation and reporting to the President on a regular basis.

IT Transformation

The structure of a large agency such as VA must, of necessity, be adjusted over time to ensure that the institution can be responsive to its mission under ever-changing circumstances. Significantly, the VA Information Technology structure, long decentralized, needed to be updated and regularized so as to be consistent with the IT world in which we live. In 2006, VA launched a major information technology transformation and consolidation.

Significantly, this will govern the way VA uses and safeguards veterans' personal and health information. With identity theft being among the fastest growing crimes in the country today, this consolidation and the resulting heightened security of personal identifying information will make the VA the "gold standard" in the realm of information privacy and security.

Laptop Loss

In May 2006, a VA employee took a laptop and an external hard drive home with him. The employee was doing an analysis of significant amounts of data relating to veterans. The data was on the hard drive in unencrypted form. The computer and hard drive were stolen, exposing some 26 million veterans to the possibility of identity theft. Later the computer and hard drive were found and FBI forensic experts determined that the data had not been accessed.

This situation highlighted the need for VA to better protect data relating to our veterans. Since that time, the security regimen at VA has been totally revised. IT has been reorganized and centralized under the control of a single Assistant Secretary. I believe that this reorganization, and the modification and strengthening of our regulations governing IT, its use, and its security will minimize the risk of a significant data loss in the future.

Emergency Support Mission

In addition to the traditional VA missions relating to health care and benefits, VA has a "Fourth Mission" to provide support to the country in the event of national disaster. (Authority for this is through the Robert T. Stafford Disaster Relief and Emergency Assistance Act and implementation is through the National Medical Disaster Plan.)

In order to better do this, VA created a new Office of Operations, Security, and Preparedness to deal with emergency planning and security. That office is charged with planning for Continuity of Government and Continuity of Operations scenarios and participates in government-wide exercises throughout the year.

Acquisition and Construction

VA has also sought to create an additional Assistant Secretary position for Acquisition and Construction. Each year, VA spends billions of dollars for products and services. Each year there are additional new VA medical centers put into the planning process through the authorization and appropriations process.

With VA's physical plant being, on average, 57 years old, plus the demographic shifts in the veteran population, it is essential that VA do all it can to update and modernize its facilities. The cost of purchasing land, design, and construction of a new VA hospital is in the range of $750 million. The magnitude of these numbers and the complexity of the acquisition process indicate that there must be the very highest levels of supervision and accountability.

National Cemetery Administration

Of course, in addition to health care and monetary benefits, VA's National Cemetery Administration ( NCA) provides memorial benefits for our veterans. In FY 2006, NCA provided more than 330,000 headstones or markers for graves of veterans worldwide. And NCA currently maintains more than 2.8 million gravesites at 125 national cemeteries in 39 States and Puerto Rico. NCA is currently in the midst of the largest expansion of the national cemeteries since the Civil War.

The shrine-like setting of our national cemeteries serves as a perpetual reminder of the sacrifice of our service men and women.

VA Employees

There are so many things that I am proud of relating to my tenure as Secretary. I am most proud of the people I have had the honor to work with who are so invested in the mission of the VA - to provide care to a group of people who have earned the right to it through service to their country. Abraham Lincoln said it most eloquently in his Second Inaugural Address: "To care for him who shall have borne the battle, and for his widow and his orphan." VA has proudly done that for more than 75 years now, and is in good shape to do so, especially for the newest veterans of the Global War on Terror, in the years ahead.

Challenges

I have outlined some of the positive experiences of my tenure. Yet, as each of you know, the past few years have not been without their challenges and frustrations. Among those are the following:

Claims Backlog

The claims backlog is an issue that has bedeviled me and many that have come before me. In fact, VA can influence the output (claims decided) of its work product, but it cannot control the input (claims filed).

And, in the midst of a war, more claims for service connected disabilities are being filed. In addition, veterans of previous conflicts have been filing claims at a higher number as they are reminded of incidents from their own military backgrounds by news reports from Iraq and Afghanistan.

From FY 2000 to FY 2006, receipts of disability compensation and pension claims rose from nearly 578,000 to more than 800,000 - an increase of more than 39%. We expect to receive 835,000 disability compensation and pension claims this current fiscal year

To control the output, VBA is hiring additional staff. Since January of this year, we have already added 1,100 new staff members to help us in our commitment to reducing the claims backlog. VBA is also working to consolidate suitable components of its work - as has been recommended by a number of Government Accountability Office reports - to achieve efficiencies, more consistent claims decisions, and better control over work processes and product.

Mental Health Care Delivery

As noted earlier, I have directed that every veteran of the Global War on Terror be screened for Traumatic Brain Injury and PTSD, no matter what they are being treated for. VA is the largest provider of mental health care in the country. We employ 9,000 mental health professionals including psychiatrists, psychologists, social workers and clinical nurse specialists at all of our facilities. VA is the world's expert on the treatment of PTSD, which is manifesting itself among some of our returning service members.

VA's mental health strategic plan is generally considered to be superb. Unfortunately, because VA was forced to operate under a continuing resolution for much of last year, it was not able to expend funds consistent with that plan. In addition, there are areas of the country where certain specialty health care providers simply can't be hired, no matter what you would pay them.

Nonetheless, we have expanded mental health services in CBOCs either with on-site staffing or by telemental health, thus providing care closer to the homes of veterans in rural areas. We also have enhanced both PTSD and substance abuse specialty care services, and programs that recognize the common co-occurrence of these problems.

We are fostering the integration of mental health and primary care by funding evidence-based programs at more than 80 sites, with more in the planning stages, as well as through the aforementioned placement of mental health staff in CBOCs. In addition, we are extending this principle to the care of home-bound veterans by funding mental health positions in Home-Based Primary Care.

This program has traditionally served older veterans, but current needs show that it also will serve some seriously wounded OEF/ OIF veterans. It can allow veterans to live at home with their families as an alternative to institutional long-term care when injuries are profound and sustained rehabilitation and other care is needed. The mental health professionals who will work with these teams also can support the family caregivers, who provide heroic care for injured veterans.

VA will be working to emphasize recovery and rehabilitation in specialty mental health services by funding additional psychosocial rehabilitation programs, expanding residential rehabilitation services, increasing the number of beds and the degree of coordination in homeless programs, extending Mental Health Intensive Case Management, and funding a recovery coordinator in each medical center.

Bonus Issue

Some months ago it was noted that, like every other government agency, VA had paid bonuses to its Senior Executives. The bonuses were paid from a pool of funds created in accordance with statute and OPM regulations. And the bonuses were determined by panels of Senior Executives acting in accord with OPM guidelines.

The highest SES salary is about $165,000. A few bonuses in the amount of $30,000 were paid in recognition of the accomplishments of highly competent, long serving executives. Some criticized that one of those executives had been involved in the preparation of the FY 2005 budget which had fallen short and another holds a senior position in VBA, the administration that continues to struggle with backlogs.

I personally have worked with both of these individuals and have the highest regard for their ability and their prodigious work ethic. I believe that the criticism leveled at each of them is unwarranted in that they encountered conditions beyond their control and used their considerable skills to minimize the problems they encountered.

Closing

Mr. Chairman, once again let me thank you for allowing me to appear before the Committee to discuss the current state of the Department of Veterans Affairs and many of the positive things that occurred during my tenure as Secretary.

To be sure there have been disappointments, but working with you, Ranking Member Buyer and other Members of the Committee, I believe we have made tremendous progress. Together, we have made VA a stronger, more focused organization - focused on the very real needs of all of our veterans, especially those currently engaged as warriors in the Global War on Terror. It has been my great pleasure to serve them, as well as all veterans who served before them.

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