James B. Peake

VA Secretary James B. Peake

EDITOR'S NOTE: On Oct. 10, VA announced that it would rely on its own workforce to set up the information technology programs needed to implement the new- Post-911 GI Bill. The announcement was received as welcome news by The American Legion, which opposes the outsourcing of services related to the GI Bill. The following interview with VA Secretary James B. Peake occurred several weeks before the announcement.

Immediately following VA Secretary James B. Peake's address to the 90th American Legion National Convention in Phoenix on Aug. 26, he was handed an envelope containing two freshly passed resolutions from the nation's largest veterans organization.
One expressed the Legion's adamant opposition to any plans VA might have to contract a private company to launch and run the new GI Bill program. The other presented the Legion's opposition to VA's use of outside contractors to perform state veterans home inspections. VA has an obligation to fulfill both responsibilities, according to the resolutions, using existing or additional staff.

No official announcement had been made regarding VA's plans to seek an outside contractor to fulfill requirements of the Post 9/11 Veterans Education Assistance Act of 2008. The Legion learned of the plan after obtaining a July letter from Peake to the president of the National VA Council that said the challenge of "creating the procedures and systems to support a new program ... effective August 1, 2009, will tax VA's resources."

In the letter, the secretary added, "We intend to move quickly to select a contractor that can fulfill our requirements and assist us in serving our veterans."
Dr. Peake, who was appointed VA secretary late in 2007, met with The American Legion Magazine after he received the resolutions. He discussed his thoughts on the new GI Bill, state veterans home inspections, a controversial partnership with the University of Colorado Hospital System that would leave Denver without a stand-alone VA medical center, and other aspects of the former DoD surgeon's tenure thus far in the Bush cabinet.

Q: There is a lot of buzz about the use of outside contractors to implement the new GI Bill. Can you explain how that would work?
A: We think there is a significant IT component - an information technology component - to be able to do this effectively. It's really rules, a lot of rules-based kinds of applications here.
What I want is the best of industry to give us an idea what they would do. If, in fact, we don't get good responses or good bids, then we wouldn't proceed that way. But what I really want to do is understand not how we would have done it in 1945, but how we move forward, to be able to leverage what industry can do in terms of business processes, in terms of IT support, in terms of communication interfaces with our customers. You talk to young people, and what they do is text-message. That's how they communicate. I'm anxious to see if industry comes back and says, "Yeah, as soon as we get a claim, here's your text message, here's our response, here's where you are." We're not talking about inherently governmental functions here. All the rules requirements would be as determined by the government. It's a matter of getting the best of industry to help us think this through, how to move forward, efficiently and effectively.

Q: What responsibilities of the new GI Bill program would VA retain?
A: We will continue to have the educational responsibility. We wouldn't be putting out the call center, as an example, because we would want people who are knowledgeable interfacing that way, so they understand the benefits and different programs that we've got, and so forth. That's not what we're putting out.
It would be administration of the claim itself. We get information from DoD. That comes electronically. You take the information from DoD, and you process it. Then when a claim comes in, when some soldier, airman, sailor or Marine comes in and wants to exercise his or her educational benefit, you marry that up with the information.
I am not telling them how to do it. I want them to come back and tell me the best way to do this, from an industry perspective.

Q: Are you talking about contracting the development and launch of the program, then handing it off to VA later, or would it be ongoing?
A: I think it would be ongoing. The way contracts get done, usually it's a year, with some option years. Then we have the option of deciding, "Can we do it better? Are we serving our veteran?" The issue is serving the veteran. That's my focus.
We are going to have a lot of people on the old benefit for a while. Ultimately, I have other things for those folks to do - more complicated claims. I want to be able to train them and expand the workforce. We are expanding our workforce now. This is not about downsizing or reducing the size of VA. That's not at all what I'm about. I'm trying to make it more efficient and effective and give the tools that will allow us to better serve our veterans.

Q: Outsourcing the delivery of such an important VA benefit, in general, is kind of a tough concept for The American Legion to digest.
A: I agree. I am not about outsourcing or privatizing VA. I think what we ought to be doing is running the VA that leverages the best of America, to better serve our veterans. We already buy something like $2.8 billion worth of health care a year. I want to make sure that health care is really going to our veterans, of high quality, and that we can link that information back into our system so that we have a continuity of care that transcends where (veterans) want to get their care.

Q: Like the idea of issuing VA access cards that can be used outside the system?
A: Well, I don't want to comment on the card itself. But, in Montana, we contract with a mental health organization out there. We do that. I think that's good. What we really want to do is make sure we get all the information back for the veteran's record.
That's the beauty of being able to contract, as opposed to just saying, "We can't do it here, so go someplace, and we will pay for it." It's different than that. I want them to be part of my system where I can look after their health-care needs, make sure they get their flu shots, make sure they get the things that are going to keep them well.

Q: One other Legion issue on outsourcing has to do with the inspection of state veterans homes buy outside companies. Can you explain that?
A: In some ways, it's nice to have outside people look at you. We have the Joint Commission on Accreditation of Health Care Organizations. That's an outside agency that looks at all of our hospitals. I don't see it much different.
You know, when you're my bud, and I come to inspect you, I might overlook some things. I don't want people overlooking things.
I want an independent audit. And I don't want to over-burden somebody who has something else to do. So, I think it's the right direction. I have no heartburn about that direction. I don't look at that as outsourcing the VA at all, to be honest with you.
I called in a blue-ribbon panel to look at our suicide (prevention program). Why? Because I want some outside eyeballs on what we are doing, to make sure we are not missing something. You can get blind-sided when you are up close and involved.

Q: One other issue that's been on The American Legion radar screen is the Denver VA Medical Center situation. Veterans there are troubled by the decision to place the VA hospital inside the University of Colorado system.
A: Some are. But you have to be careful about how that is characterized, because it's not really the truth.
No other secretary has moved along like I have. We bought the UPI (University Physicians, Inc.) building. If Congress would go ahead and give us the authorization to get that swimming pool from the Department of Interior, we would be able to move forward. We've gotten the covenants with the FRA (Fitzsimons Redevelopment Authority). It has the potential to be the best state-of-the-art ambulatory care facility to serve that area. We can do so much more in an ambulatory environment than we ever could before.
The demographics are changing. When you build something now - if you look traditionally - it's going to be there for 50 years. That's not what we are going to need in 50 years. Just look at the veteran population. I want to put more ambulatory care down in Colorado Springs. A lot of stuff we used to hospitalize people for we can do on an outpatient basis. I'm a surgeon. I started an ambulatory surgery program. Within six months, about 70 percent of the stuff we were doing that routinely took two, three or four days in the hospital, was done ambulatory. They go home that night. They get a call from the nurse that night, a call from the nurse the next morning, the family is educated - really, better satisfaction, better outcomes.
We are going to have an MRI and a CAT Scanner in that place, so we can do the advanced diagnostics there, so people don't have to come in (for inpatient care). I was at a spinal cord center the other day where 20 percent of the people come in for their annual exam, which is really a one-day outpatient exam, and they stay for a night or two or three, because... because. If we had, like we could have in Denver, a hotel, the veteran could live like a regular person and we would be able to support a different model of care.

Q: A lot of the opposition on this - both with the issue of contracting services and with the University of Colorado - is that VA somehow loses its unique identity and presence.
A: In Denver, I can tell you, even though people would be housed in a common tower, there would be a separate portal so veterans would have that sense of identity. The beds that we would lease would be manned by our people - VA people, linked with our VA electronic health-care records. You know, often our Vet Centers are co-located in a strip mall. Well, that's OK. That's good, in terms of making it accessible to the veteran. That's what we want.

Q: So, what we are talking about is a response to the end of the era of big, multiple-inpatient-bed modality?
A: Well, I will tell you, we are building a place in Las Vegas because veterans are still going there. The population is growing. It's big. Orlando - veterans are going there. Denver - they're not. The population is going to come down. It's not going to be there in 20 or 30 years. So, we won't need that many beds. Denver itself is going to grow but not with veterans, unless something really changes. Look at the number. We demobilized 16 million people in World War II. We have had 7 million in six or seven years now go into OEF/OIF.
I'm trying to look beyond the horizon here a bit here. How do we set the VA to be modern and provide them - not 1945 care - I mean, we've been on an unbelievable quality journey. In the 1940s, there was a VA hospital here, here and here, and nothing in between. If you wanted care you drove there. You got there somehow. Now, we can be expanding our outreach with CBOCs - community-based outpatient clinics - with our Vet Centers, trying to put a more robust network out there, of access, so that people come to us. We still have vets who don't access because they don't want to travel. What I want is for them is to be able to access that care. I think we can make a difference, especially with this younger generation. We can make a difference if we get them in early.

Q: One of the key issues you have wanted to tackle in your year as VA secretary is the benefits claims backlog. Can you describe what kind of progress you feel you have made and where we are heading?
A: It's not the progress I would like to be able to claim, but it's not a short-term solution. There are several pieces. We have been hiring people. I have been to our training program in Baltimore, as an example, where we are starting to see young people come into our system who communicate with text messages and FaceBook - they understand computers and paperless processing. We are showing we can do that with our benefits delivery of discharge claims. We are showing we can do that. We are setting the tone for a movement toward a paperless environment.
If anything, we will have accomplished getting the pieces into place where that momentum can't be stopped. That's what I want. Our claims inventory is lower than it's been. Our production across the board is (up). We still have too much variability from place to place. So, we are focusing on that. We've got some tools that are starting to help us look at variability.

Q: How are changes in DoD-to-VA transition coming into play?
A: We're doing those exams and ratings in St. Petersburg. We need to push that into the paperless environment, too, because we want to expand that out. I think it's the right direction. It cuts down the ambiguity for the soldier. He or she knows, when he or she gets out, what that VA rating is going to be, instead of having to wait months and then find out their stuff got lost. Now that we have the rating, as soon as they have their DD-214 and they are officially discharged, with the appropriate timing of the DD-214, we can them a check within a month.

Q: In the short amount of time you will have been secretary, what do think have been your biggest accomplishments?
A: I said when I was in my confirmation hearings that I am not much of a legacy guy. What we have is really great people, to be honest. If I could empower them to try new things and to take advantage of the things that work and move forward, that will have been a positive legacy, I think. The emphasis of trying to move toward a veteran-centric environment in all of our realms, I think is the right direction for us to move.

Q: But they will remember you for raising the mileage rate.
A: I didn't know you could do that until I asked. They said, "No, you can do it." I said, "Sign it."

Q: Yeah, 11 cents a mile was a little ridiculous in this environment.
A: For 30 years.

Q: What would you say leads your list of unfinished business as you pass the torch to a new secretary next winter?
A: We have three horizons. One is November so that we are prepared to be able to educate the transition team that is coming in and help them understand the complexity, the things that are ongoing, you know, already, that are in the right direction. How to craft the budget, those kinds of things. Then January, I want to have some things on the ground that are really done, so that when the administration really moves in, they a good set of options. The third piece is that 30-year horizon, so they understand what we are shooting at, so they can choose to try them or not try them. I want to give them my best view. I don't want to have this momentum dropped. I want veterans to be served across the administrations.

Q: Looking forward, as the peak demand for veteran long-term care remains a few years out, you think you have to be looking well past that.
A: I was in the Army. We built the new Brooke Army Medical Center. And the retirees were adamant. It was "450 or fight. Four-hundred fifty beds or we're going to fight it." Well, you build a 450-bed hospital and then when you really open it, I think we opened 150 of them, and then you have to go in and redesign it to make it ambulatory because that's the way health care has moved, and could have been predicted to have moved. That's why it is so important to have a strategic approach. You can always correct and rebuild something. But once you've got it, you spend readjusting to meet what the real need is.

Q: People are passionate about their hospitals, the physical structure. Especially veterans who want to see a visible VA presence in their communities.
A: I know. This is going to be most beautiful VA footprint you'd ever seen. It's right on the light rail - there in Denver I'm talking about. It will be a tremendous ambulatory environment. We want to build the parking into it, so that we have adequate parking for the first time.
We want to be on the campus there in Denver. That's are our academic partner. Many of the professors go back and forth, partly employed by us, partly employed by them. Same people. There is no reason to think that having our own building over here makes the care any better. In fact, I think it doesn't sometimes. Health care is local, so you've got adjust it to what the local capabilities are.

Q: When veterans hear about new partners, outsourcing and developments like that, they become suspicious that some of the VA identity is lost.
A: I understand that. Part of it is you've got to educate people. You get one on one with folks - not with the leadership because they have a vested interest, but I was talking with an American Legion guy - where was it? - and I asked him, "What do you think about this?"
And he said, "Well, you know, not all of us feel exactly that way, that it's a bad thing. Maybe it is the right thing to do."
So, it's not universal. And I do appreciate that sometimes the leadership has to take an adamant stand. About adamant stands, I'm trying to figure what's the right thing to do that's going to have the long-term effect to give the best care for our veterans into the 21st century.

Q: On the Denver front, another thing that bothers veterans is they have seen three VA secretaries come through, each with a different plan.
A: In the end, the thing about this plan, is they could have had that hospital up and running within three years because the civilian sector would be building with our specifications built into it, and they can do stuff quicker than we can. It would have been a win-win for Denver. I don't know where it will go.

Q: But you think the current plan in Denver is the right course.
A: It may not happen, but I am trying to do the right thing. That's what I'm getting paid for. That's what I think. I've been around this business for a while. All I can do is give it my best intention, my best shot. I just want to do the right thing.