 It is an honor and a pleasure to introduce the Secretary of Veterans Affairs, the Honorable Robert McDonald. Secretary McDonald is a 1975 graduate of the United States Military Academy at West Point, an alumnus of the University of Utah, where he earned an MBA. An Army veteran and both airborne and Ranger qualified, he served with the 82nd Airborne Division upon leaving military service, Captain McDonald was awarded the Meritory Service Medal. In 1980, Mr. McDonald joined Procter & Gamble, a Fortune 50 company, and he rose through the ranks to become its Chief Executive Officer and President. He retired in June of 2013. Nominated by President Obama as the 8th Secretary of Veterans Affairs on June 30, he was confirmed by the United States Senate on July 29, 2014. Ladies and gentlemen, please welcome Secretary of Veterans Affairs, Robert McDonald. Thank you very much. Thank you. It's terrific to be here with you this morning and I appreciate all of you who had to fight the weather to get here. I was out last night and I know how difficult it was. Many thanks to Brenda for that wonderful introduction. Brenda, if you have any issues with your leg, let me know because it's my fault. I will do everything I can to make sure that doesn't happen for Brenda and everyone else in this room. I also want to thank Ron Hope, Ron's a terrific leader. He's the leader I want to be someday. My wife and I have been thrilled to be with Ron and his family at Veterans Day and throughout the year and it's just great working with Ron. We really think of you all in DAV as true partners in trying to get our mutual mission of caring for veterans done. Many thanks to Mark Burgess, of course, the adjutant, David Tannenbaum, Secretary Treasurer, Leanne Karg for her work as the Auxiliary National Commander, John Clindings, who directs the volunteers and of course my friend Gary Augustine who works here with us in Washington every single day. Great partnership and we are really thrilled. We can't do this job by ourselves. We know that and we know that the partnership with you all is absolutely essential to get that done and thank you so much for your partnership with the Winter Sports Clinic. I'm looking forward to this year's clinic in April and we hope to see some of you in snow mass for that clinic. Thanks also for your support with the VA caregiver support program. I'm going to talk more about that later. I know that's a very important topic to us and it's one we need to be on the forefront on as we go to talk to members of Congress. But let me talk for a few minutes about the VA and what we're attempting to do. You know, my life's purpose has been to try to improve lives and I've done that in various different ways throughout my life. Believe it or not these four five pictures are of the same individual. On the far left you've kind of got this geeky looking guy and my wife's never seen that picture by the way but when I was young I was a Boy Scout you know and I love the Boy Scouts and the thing I love most about the Boy Scouts were the projects that we did to help other people and every time you help someone you got this internal desire to do even more. So I decided I wanted to go to West Point because there were people living behind there in Curt and there were people living in communist countries that didn't have freedoms and I thought by going to West Point being the leader in the army that I could help make a difference in those people's lives. So even though I graduated toward the top of my class and most of those people tend to go in the Corps of Engineers I wanted to be in the infantry so I was one of the first people in my class to go in the infantry and as you can see in that third picture I was an 82nd Airborne Division as Brenda said I did Ranger School, Arctic Warfare School, Desert Warfare School, Jungle Warfare School in Panama, Jumpmaster and all that prepared me for the next picture which was to work for Procter and Gamble. I joined I joined the Procter and Gamble actually that was a really funny story until 1991 when my wife and I moved to the Philippines. The previous vice president of the American Chamber of Commerce had been kidnapped by communist rebels there for 39 days so it got so that story wasn't too funny anymore but my company said don't worry we know you don't want to go to a place where the safety of your children are in danger so don't worry we're gonna send you to the Philippines with that communist insurgency but we've hired bodyguards for your children and you and but anyway I will join the Procter and Gamble company that's the next picture that's the first day I joined the Procter and Gamble company it's June 4th 1980 and there are a couple important things you can tell from that picture and number one I joined the company because of the purpose of the company which was to improve the lives of the world's consumers and any given day about five billion people on the planet use at least one product of the Procter and Gamble company but the important insight from that picture is the Procter and Gamble company has not solved hair loss yet I thought getting out of the military you know grown my hair a little bit longer this is cool this is a new a new way to demonstrate my freedom but as you can see by the fifth picture something happened in between and I've lost a little bit of hair I don't know if that was worrying or what but the next picture of course is the one I'm most proud of which is is the ability to be in a position where I can serve you which is the veterans of the country I take this very personally when I was interviewed by CBS before I went around the Skid Row in Los Angeles looking for homeless veterans they asked me you know what was why was I there and I said my biggest fear is tonight as I'm walking through Skid Row I pick up a tarpolin to see if there's a veteran and I find someone who saved my life someone who checked my parachute before I jumped somebody who made sure the charge on those mortars was the right charge fortunately that night we didn't but fortunately also we're working to end homelessness in Los Angeles we have the most noble mission in government it was you know president Lincoln second inaugural address when he talked about to care for him who should have borne the battle as widows in his orphans today we paraphrase that because of course women are very important to us in VA we talk about to care for those who have borne the battle their families and their survivors in the Civil War over 750,000 soldiers lost their lives that's 514 Americans every single day for four years think about that 514 Americans every single day for four years and unlike our methods today where you wear dog tags and some of us I always had a dog tag in my shoelaces and my boots just in case my neck got separated from my my my feet but you know in those days there were no dog tags and in fact most of the people who died in those battles were buried right on the battlefield with the first inspiration was Lincoln's inaugural dress he created something called the Sanitation Commission which is the forerunner of our National Cemetery's administration where we went out on the battlefields dug up those mass graves identified the soldiers present Lincoln work with Congress to get national cemeteries and we reburied those soldiers in all those cemeteries we notified the families we were able to identify about two-thirds of the soldiers who were in those mass graves which were most of the casualties of the Civil War so that was an important inspiration for all of us as to the importance of the Veterans Affairs Department in the very beginning I think we've got a terrific set of values we tend to wear these in this button that says I care this acronym integrity commitment advocacy respect and excellence it's the way we want you to be treated as veterans it's the way we want to treat you and we want excellence to be the very best our mission is none other than to make sure we have the very best health care system in the whole world and health care is just one of those lines of business but it's one you probably know us most for in terms of education you can see here we spend about 40 billion dollars educating veterans 1.3 million veterans 1.1 billion dollars in vocational rehabilitation and employment we're one of the largest life insurance companies in the country we guarantee 2.1 million home loans and you know our foreclosure rate is the lowest in the industry veterans do not run into financial problems in paying for their mortgages and I think that's a great testament to all of our veterans fifty eight billion dollars in compensation benefits for almost four million veterans very very important in fiscal year 2014 we completed a record number 1.3 million dollars or 1.3 million claims that's over 150,000 more than the previous year's record and we're working hard to get that production rate up even more we've got the claims backlog down 58 percent in the last 22 months from 611,000 to 255,000 but you know what as long as there's any claim and any backlog we have more work to do so we're not perfect yet we're moving in the right direction but what we're trying to do is put in place a budget and an organization capability to deal with the huge influx of claims the huge influx of needs that our veterans have after fighting wars for 24 years there we go our goal is to make VA a model agency with respect to customer experience and stewardship of taxpayer resources we want to be the best example for all government agencies with efficient and effective operations we look to be comparable to the very best private sector companies this is how we will meet our nation's obligations to our veterans it's worth remembering that today a full 150 years after the civil war ground to a halt we VA are still providing benefits to the child of a civil war veteran we still have troops in both Afghanistan and Iraq and in the last decade we've already seen a dramatic increase in the demand for benefits and care this chart shows how for 40 years from 1960 to the year 2000 the percentage of veterans receiving compensation from VA was relatively stable at eight and a half percent but in the last 14 years since 2001 the percentage has dramatically increased to 19 percent that's more than double the previous percentage and we'll make sure these charts are available to you as you go out to talk to your congressional representatives simultaneously the number of claims so that was about receiving disability compensation this is about the number of claims the number of claims and the number of medical issues in rating related claims has soared as this chart shows in 2009 VBA completed almost 980,000 claims in fiscal year 2017 we project we project we will complete 1.4 million claims that's a 47 percent increase but there's been an even more dramatic growth in a number of medical issues per claim 2.7 million in 2009 and a projected 5.9 million in 2017 that's a 115% increase in just over eight years as this chart shows now these increases were accompanied by a dramatic rise in the average degree of disability compensation granted to veterans for 45 years from 1950 to 1955 the average degree of disability held steady at 30 percent the average veteran with a disability claim had roughly 30 percent disability for 40 but since 2000 the year 2000 the average degree of disability has risen the 47.7 percent as you can see in this chart again more than you know nearly 50 percent of individuals so while it's true that the number of veterans is declining the number of those seeking care and benefits from VA is increasing quite dramatically now you know the reasons for this but let me just lay them out several factors contribute to this increase first we've been fighting a war for more than a decade second age and orange related disability claims third an unlimited claims appeal process which we're pleased with the fully developed appeal approach that the DAV has been leading increased number of medical claims issues far greater survival rates among those wounded more sophisticated methods for identifying and treating veterans medical issues and huge demographic shifts in this country the result veterans demand for services and benefits has exceeded VA's capacity to meet them it's important that the American people understand why this is happening and the most important consideration of those that I mentioned is I'm sorry is shown here on this chart please look at the the purple bar in particular as with any population health care requirements and the demand for benefits both increase as veterans age and exit the worst workforce this chart shows an astounding shift in 1975 the year I graduated from West Point just 40 years ago only 2.2 a million American veterans were 65 years old or older that's only 7.5 percent of our veteran population that's the purple bar in the year 2017 we expect 9.8 million veterans will be 65 years or older 46% of the veteran population nearly half of the veteran population look at the size of the purple bar so today we serve a population that is older and more prompt with more chronic conditions and less able to afford private sector care VA has the greatest opportunity to enhance care for veterans in its history we see that last year's crisis was a huge opportunity we're in extraordinary position we have not pretended not only right the wrongs but the length in our lead in areas where we've always excelled take the lead in service delivery areas that are lagging and chart new ground in emerging or evolving areas of health care and we've made progress on some of these already we've had 37 main appointments 1.8 million more in our facilities than in the same months last year 98% were completed within 30 days of preferred or medically necessary date 880,000 evening or weekend appointments 2 million authorizations for private sector care that's a 45% increase in private sector care and that's even before the choice cards were mailed 55% reduction electronic waitlist from over 57,000 to under 25,800 we hired 836 more physicians 1,856 more nurses 1,266 medical support assistance from April to December and November was our peak hiring month we're working hard to find the help to work hard for all of us your the opportunities are immense and we're going to work hard on your behalf when we can help and all of you can help find us the people that we need in order to get this done one of the we have many incentives now thanks to members of Congress and the work that we've done with members of Congress in order to hire more people we now can repay the education debt of a doctor that increase that's been increased from $60,000 a year $60,000 of reimbursement to $120,000 over a five-year service period and that's helping us recruit more doctors we can now repay student loans to lending institutions up to $10,000 per year with a lifetime cap of $60,000 if they're working to work if they're willing to work for three years for the VA employee incentive scholarship program that provides scholarships to employees for degrees or training and selected health carriers we can cover tuition and some living expenses we've increased pay ranges for physicians so that when they come to work at the VA we can be competitive with the private sector we've done the same thing for Dennis we have a compensation a comprehensive paying compensation packages commensurate with with education which will allow us to recruit more doctors and more nurses and we're soon beginning a pilot program for mental health professionals that was included in the recently approved and signed Clay Hunt Act we're also undergoing the largest restructuring in the department's history this is a historic department-wide transformation we're changing VA's culture and making the veteran the center of everything that we do the focus of my VA what we're calling it the reason we're calling it that is we really want you to think of the VA as your own we want you to feel like you have a customized program just for you from the VA we're focusing on five objectives number one is to improve the veteran experience so that every veteran has a seamless integrated and responsive customer service experience every single time they interact with the VA number two is we have to improve the employee experience and eliminate the barriers that employees see to providing great customer service to achieving people excellence amongst employees so employees can better serve veterans if we don't take care of our employees there's no way we can expect those employees to better take care of veterans number three we need to improve our internal support services within VA number four we need to establish a culture of continuous improvement so local levels can identify your correct problems more immediately and then replicate those proven solutions across the entire VA facilities number five importantly is enhancing strategic partnerships and of course we think that our partnerships with veteran service organizations like DVA DAV are absolutely critical again we intend every single veteran to have a delightful experience with VA every time that you interact with VA we're also in the process of reorganizing the the department geographically which is an important first step to simplification we have had nine lines of business each line of business has had its own geographic map and its own middle management we're moving to one geographic map the one you see here that will have five regions in the past those nine different this disjointed geographic maps will come together and the one will have one structure one organization simplify it so veterans know where to go who to talk to and have a customer service organization that will reach out to you and work on your behalf in in terms of strategic partnerships we set up a new office of strategic partnerships we want to create a national network of community veteran advisory councils we want to drive responsibility in VA down closer to where the veteran is so that decisions can be made at the local level as to how resources need to be moved to better care for the veterans in their geography we're in the process of working to leverage external resources we're setting up an external advisory board that will involve a lot of experts in the industry as well as people in the private sector who can help us benchmark how to better care for customers we're talking to people like Disney like USA a like Starbucks to find out how you train people to better care for customers so that we can provide those kind of delightful experiences but obviously it's important to get the budget and the capability to do all this this budget requests one hundred sixty eight point eight billion dollars seventy three point five billion in discretionary funds and ninety five point three billion in mandatory funds as you can see here this is a large increase in discretionary funding of seven and a half percent a large increase in medical care funding of seven point four percent and a large increase in funding in the benefits area of six point six percent this budget will increase access to medical care and benefits for veterans it will address the infrastructure challenges including major and minor construction modernization and renovation most of our buildings are over 70 years old now that we have an influx of female veterans about eleven twelve percent of our veterans are female we don't have the clinical space to put in women's veterans I can tell you hospitals now that build operating rooms the operating rooms are fifty percent to a hundred percent bigger than they were seventy years ago why because when you do an operation out involves robotics involves computers involves bandwidth we need larger hospital rooms we just need to overhaul the facilities that we have we need to fund medical and prosthetics research and we also have to address this IT infrastructure and modernization issue that we have while this is a very very large increase and we understand that it's not enough it's not enough it's not sufficient to meet all the requirements in either 2016 or 2017 so one of things I've asked for Congress for is flexibility flexibility so that if you decide you want to use the choice card we can fund that if you decide you want to use the VA we can fund that right now in the VA we have 70 line items a budget that we can't move money from one line item to the other and there's tremendous uncertainty with choice card we are very much in favor of the choice card we think it's a great idea we want you to be able to get the care wherever you want to get it but so far we haven't seen a great uptake on the choice card and we're estimating that the choice card usage could vary anywhere from three point eight billion dollars over the three-year period to twelve point nine billion dollars over that three-year period that's a nine billion dollar difference all we're asking a Congress is over time if you decide not to use the choice card and you come to the VA we want to have the ability to take that budget money and move it to the VA or if you decide to overuse the choice card and go beyond the 12 billion we want to have the money to move from VA to the choice card that's all we've been asking is for flexibility like every business in the country would have in order to meet the consumer need again it's all about your choice not ours so we want to just be there where you are I want to talk briefly before I close about the importance of the caregiver program because I know you're going to be talking about it later we have clinical experts on caregiver issues we provide information to all veterans and caregivers on available services both VA and non VA again we can't do it all ourselves and one at every we have one caregiver coordinator at every one of our medical center facilities so if you haven't met them please please reach out and meet them we also have a caregiver service line the phone number there is 855-260-3274-855-260-3274 we respond to inquiries about caregiver services we provide referrals to local caregivers we provide emotional support and we've received about 150,000 calls so far which average about 150 calls per day so it's not insignificant we think caregiving is incredibly important we want to stand up a new advisory council for the secretary before the VA of caregiving experts we want to have a caregiver conference where we bring all caregiving experts together we think that's important to shine a light on caregiving for the national audience and we know that you'd like to work with us and we want to partner with you on expanding caregivers last year we partnered with the Easter seal disability services we developed four new self-care training courses for caregivers but we know that's not enough and we know we have a lot more to do we have over two dozen caregiver partnerships one of course one very important one was with the DAV but of course we want to go further I know I probably haven't covered every single issue you wanted me to so I would like to close simply by saying if you have any questions or any comments please either give me a call or email me my email address is very very simple it's bob.mcdonald at va.gov bob.mcdonald at va.gov write to me call me anytime I would love to hear from you if you forget how to spell mcdonald just go outside and look for the golden arches thank you very much I take it that isn't the IEIO is this time I would like to ask commander hope to come up he has a presentation he'd like to make ladies and gentlemen last year many veterans felt a breach of trust resulting from the access issues at a VA we two understood challenges or changes had to be made to ensure veterans were properly cared for in a timely fashion we're now six months under the VA's new leadership and we're seeing a number of long-needed changes taking place secretary mcdonald has announced a large scale organization reef reef structuring under the my va initiative to realign care services and benefits in a way that offers veterans a more integrated responsive va system we have seen va leaders held accountable and removed for their part in the access crisis uncovered last year and we've seen an increased va budget request announced earlier this month which is something DAV has been requesting for years in the military you're recognized for your accomplishments but also for your potential at six months are still a lot of work to be done at va we can all agree on that but it's also true that the secretary bob is he likes to be called has brought about some large-scale changes and has more plans on the horizon to fix a bureaucracy that has at times hindered the process for veterans to receive their own care and benefits for his efforts thus far to restore the faith of veterans and more importantly as a gesture of faith and confidence in his continued work to improve and strengthen the VA we'd like to present DAV's outstanding federal executive of the year award for 2014 to secretary Bob McDonald thank you very much I must say to you that with great humility that I accept this and also with your intention that this causes me to work harder not relax I see lots of nodding heads thank you very much I agree this will energize all of us in the department you know there there are people who want us to fail and we don't want to fail we're most of us are veterans we're here for veterans to do veterans things and this will do nothing but energize all of us in the department to work even harder on your behalf so I thank you very much for this recognition it's with all humility that I accept it and I want to thank DAV for their partnership we could not do this without you and we look forward to working together to get it done thank you very much