Opening Statement before the Senate Committee on Veterans’ AffairsMyVA: VA’s Transformation Strategy: Examining the Plan to Modernize VA

Chairman Isakson, Ranking Member Blumenthal, members of the committee—thank you for this opportunity to discuss the important transformation of VA, what we call MyVA.

My personal thanks also to Senators Thom Tillis and Jon Tester for meeting with us repeatedly to hone our transformation plans. I believe they know MyVA is about fulfilling the Nation’s obligation to those who have served and that they share our vision for VA to become the Number One customer-service agency in the Government.

We have a lot of work to do to reach that goal, but we are making progress.

This chart reflects the tremendous work done by our Veterans Benefits Administration (VBA) in reducing the backlog of disability claims—an almost 90 percent reduction in the backlog since March of 2013.

Our National Cemeteries Administration (NCA) is already rated No. 1 in the Nation by the American Customer Satisfaction Index (ACSI). ACSI rates all customer service companies in the Nation, and NCA came out on top. We aim to make it so for all of VA.

Last year, J.D. Power rated our Consolidated Mail Outpatient Pharmacy with the highest customer satisfaction score among the nation’s public and private mail-order pharmacies for the 6th year—higher than Kaiser, Humana, and Walmart.

So, that said, let me tell you about our framework to transform all of VA by combining functions, simplifying operations, and providing Veterans care and services so that they see VA as MyVA—a world-class, customer-focused, Veteran-centered service organization.

First, improve the Veteran experience: Every contact between Veterans and VA should be predictable, consistent, and easy. It begins with respectfully receiving our Veteran clients, but it is also a science. We’re focusing on human-centered design, process mapping, and working with exceptional design firms and companies to make every interaction with our clients better.

Second, improve the employee experience: We can’t make things better for Veterans without improving the work environment of employees. It’s no coincidence that the best private sector customer-service organizations are also among the best places to work.

Third, improve internal support services: We must enable employees and leaders by bringing our IT infrastructure into the 21st century. Our scheduling system dates to 1985. Our Financial Management System is written in COBOL, a language I used in 1973. This is unacceptable and impedes our efforts to serve Veterans.

Fourth, establish a culture of continuous improvement: We will apply Lean strategies and other performance improvement capabilities to help employees improve processes and build a culture of continuous improvement.

And last, enhance strategic partnerships: Expanding our partnerships will allow us to extend the reach of services available for Veterans and their families.

MyVA is a framework for modernizing VA’s culture, processes, and capabilities to put the needs and interests of Veterans and their families first.

Changes to leadership were also necessary. Ten of our top 16 executives are new since I became Secretary—all with substantial business experience. Our new leadership team feels comfortable having honest, sometimes tough, discussions to transform VA. Our team includes:

• A former banking industry CFO and USO President;
• The former CEO of Beth Israel Medical Center and Morristown Medical Center;
• A former Chief Executive of Jollibee Foods and President of McDonald’s Europe;
• A former CIO of Johnson and Johnson and Dell Inc.;
• A former Chief Customer Officer for the City of Philadelphia who spent 10 years at USAA;
• A retired Disney executive who spent 2010-2011 at Walter Reed enhancing the patient experience;
• And I am the former Chairman, President, and CEO of the Procter and Gamble Company.

Our MyVA Advisory Committee (MVAC), led by Chairman Joe Robles, a retired U.S. Army Major General and former Chairman and CEO of USAA, is also comprised of a diverse group of business leaders, medical professionals, and experienced government executives. I knew we needed outside, expert advice on business and government transformation, so I recruited these leaders—well before the Independent Commission was established—to help advise our team on VA transformation.

We’re working collaboratively with many world-class institutions to capture ideas and best practices as we transform. As well, we’re listening to key stakeholders, even those who are critical of VA.

We’re forming strategic partnerships with external organizations to leverage their goodwill, resources, and expertise to better serve Veterans. VA can’t do everything itself. Over the last year, we’ve cultivated meaningful partnerships in employment, ending homelessness, wellness, and mental health with dozens of productive partners.

And we’re streamlining business processes with community care providers, re-imagining how we obtain services such as billing, reimbursement, and information sharing. We must operate as part of a community of care.

We know that VA has significant issues that need to be addressed, so we’re listening to others’ perspectives and investing in our people. We’re running the government’s second largest Department like a $181 billion Fortune 6 organization should be run, balancing near term performance improvements, while rebuilding the long-term organizational health of VA.

We have narrowed-down our near-term focus to the 12 “breakthrough priorities” depicted on this slide. On the left, are eight “Veteran-facing” priorities. On the right are four “VA-facing priorities” to reform internal systems. But make no mistake—all 12 are designed to improve the delivery of timely care and benefits to Veterans. We had many accomplishments in these areas in 2015, but I’ll spend most of my time focusing on what we’ll accomplish in 2016. We understand this will be a challenge, but we are committed to producing results for Veterans:

1. Improve the Veteran Experience: In 2015, we named VA’s first Chief Veteran Experience Officer and began staffing the office that will set customer service standards, spread best practices, and train employees. We’re creating a national network of Community Veterans Engagement Boards to leverage non-VA assets to meet Veterans’ needs, and established 36 communities with 15 more in development.
   In 2016, we will establish Department-wide customer experience measurements to enable service improvements and increase Veterans’ trust in VA from 47 percent to 70 percent. We will also ensure our Veterans Experience office is fully operational and expand our network of Community Veteran Engagement Boards to over 100. Our medical centers will be fully staffed at the frontline with well-prepared, customer-oriented employees.
2. Increase Access to Health Care: Last year, VA increased the number of Veteran appointments by more than 1.2 million and completed over 96 percent of appointments in October within 30 days of clinically indicated or Veterans’ preferred dates.
   By the end of this year, when Veterans call or visit primary care at a VHA Medical Center, their clinical needs will be addressed that day. Enrolled Veterans will conveniently get medically necessary care, referrals, and information from any VA medical center.
3. Improve Community Care: In 2015, VA issued authorizations resulting in 12 million community care appointments—thanks to the flexibility of the Choice Act.
   In 2016, pending legislation, VA will begin consolidation and streamlining of access to our Community Care Network. Veterans will see a community provider within 30 days of referral, Community Care claims will be processed and paid within 30 days 85 percent of the time, and the claims backlog will be reduced to less than 10 percent of inventory.
4. Deliver a Unified Veteran Experience: Last November, VA launched the initial Vets.gov capability, a mobile-first, cloud-based website that will replace numerous other websites with a single login. In 2016, Vets.gov will provide Veterans, their families, and caregivers with the top 100 search terms found within one click. Additionally, 100 percent of content, features, and forms from the current public-facing VA websites will be redesigned, rewritten in plain language, and migrated to Vets.gov—prioritized by Veteran demand.
5. Modernize Contact Centers (Including VCL): Last year, the heroic staff of our Veterans Crisis Line (VCL) in Canandaigua, NY, was featured in the Oscar winning documentary “Crisis Hotline: Veterans Press 1.” They answered over 490,000 calls, initiated the dispatch of emergency services to callers in imminent crisis over 11,000 times, and provided over 81,000 referrals to VA Suicide Prevention Coordinators.
   By the end of this year, Veterans in crisis will have their call promptly answered by an experienced responder at the VCL. All Veterans will be able to access VA contact centers 24 hours a day, know where to call to get their questions answered, receive prompt service and accurate answers, and be treated with kindness.
6. Improve the Compensation and Pension Exam Process: Many Veterans find the C&P exam, often their first impression of VA, to be confusing. Last year, VBA, VHA and our Veterans experience team worked to redesign the process using Human Centered Design and Lean techniques.
   By February, we’ll have baseline metrics in place to measure Veteran satisfaction with the C&P Exam process. By the end of 2016, we’ll complete a national rollout of initiatives demonstrating improvement in Veterans’ experience with C&P.
7. Develop a Simplified Appeals Process: We’ve driven down the disability claims backlog to fewer than 82,000, from a peak of 611,000 in March 2013, fully transitioning processing from paper to electronic, eliminating 5,000 tons of paper a year. We decided 1.4 million disability compensation and pension claims for Veterans and survivors—the highest in VA history for a single year.
   In 2016, subject to successful legislation, we’ll put in place a simplified appeals process, enabling the Department to resolve 90 percent of appeals within a year of filing by 2021.
8. Continue Progress in Reducing Veteran Homelessness: Last year, we provided services to more than 365,000 homeless or at-risk Veterans and placed almost 108,000 in permanent housing or prevented them from being homeless.
   In 2016, we’ll continue reducing Veteran homelessness and demonstrate progress toward an effective end by assisting an additional 100,000 Veterans and family members.
9. Improve Employee Experience: In 2015, we launched Leaders Developing Leaders (LDL), which trained over 5,000 leaders. We also trained critical parts of our workforce in Lean and Human-Centered Design to improve and encourage problem solving.
   In 2016, we’ll continue improving the employee experience by developing engaged leaders who inspire and empower employees to deliver seamless, integrated, and responsive customer service and have over 12,000 leaders trained in LDL principles. All VA employees will have a customer service standard in their performance plans.
10. Staff Critical Positions: In 2015 we hired over 41,000 employees, a net increase of almost 14,000 healthcare staff, or a 4.7 percent increase that included over 1,300 physicians and 3,600 nurses. Additionally, we filled several critical leadership positions, to include the Under Secretary of Health, Chief Information Officer, and Chief Veterans Experience Officer.
    In 2016, our targets include 95 percent of Medical Center Director positions filled with permanent appointments and 90 percent of other critical shortages addressed while reducing “time to fill” vacant position standards by 30 percent.
11. Transform our Office of Information and Technology (OIT): In July of 2015, LaVerne Council was confirmed as our new Chief Information Officer (CIO); she has developed a multi-year plan for a world-class IT organization.
    In 2016, our key IT goals include ensuring 50 percent of IT projects are on time and on budget. We’ll stand up an account management office and develop portfolios for all Administrations. One hundred percent of OIT executives’ performance goals will be tied to strategy goals, and we’ll close 100 percent of current cybersecurity weaknesses. We’ll develop a holistic Veteran data management strategy, implement an IT quality and compliance office, and finalize congressionally mandated interoperability requirements.
12. Transform Supply Chain: In 2016, we’ll build an enterprise-wide integrated Medical-Surgical supply chain that leverages VA’s scale to drive an increase in responsiveness and a reduction in operating costs with $150M+ cost avoidance redirected to priority Veteran programs.
    We are rigorously managing each of these “breakthrough priorities” by instituting a Department-level scorecard, metrics, and tracking system. Each priority has a responsible official and a cross-department team that meets every other week with either the Secretary or Deputy Secretary.
    Mr. Chairman, VA is grateful for your continuing support and appreciates your efforts to pass legislation enabling high-quality Veterans’ care. We have identified a number of necessary legislative items that we need your help with in 2016. Details are in my written statement, but we need assistance with:

• Consolidation of Care in the Community;
• Flexible Budget Authority;
• Support for the Purchased Health Care Streamlining and Modernization Act;
• Special Legislation for VA’s West Los Angeles Campus;
• Overhauling the Claims Appeals Process.
• I also encourage the committee to support other key legislative proposals in the President’s FY2017 Budget that will be delivered on February 9th.
• And last, we need your assistance in supporting the cultural change of MyVA to transform the department. We need you to have the courage to help make the changes you’re asking VA to make, and that we must make.

Your legislative support in these areas is critical to achieve irreversible momentum for our MyVA transformation. On behalf of the vast majority of VA employees who work hard and do the right thing for Veterans every day, thank you, again, for this opportunity.

We look forward to working together to solve what I believe is one of our most important national issues . . . caring for those who protect our freedom. We have the capability and determination to make a difference in Veterans’ lives—to make the Department the best it can be so that every Veteran’s experience with VA is world class.

We can do this.

Thank you