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Hearing of Committee on Veteran's Affairs on Nomination of Hon. R. James Nicholson to be Secretary, Department of Veterans Affairs

Location: Washington, DC

Hearing of Committee on Veteran's Affairs on Nomination of Hon. R. James Nicholson to be Secretary, Department of Veterans Affairs


Chairman Craig. Good morning, ladies and gentlemen. The Committee will come to order. It is my pleasure to call this
hearing to order, the first hearing of the Senate Committee on Veterans Affairs for the 109th Congress and the first hearing
of this Committee that I have the honor of chairing.

In a few moments, we will receive testimony from the President's nominee to serve as Secretary of Veterans Affairs,
Ambassador Jim Nicholson, and I will offer him the opportunity to introduce the family members who have accompanied him to the hearing this morning. But if I may, I would like to offer a few introductory remarks first.

Let me begin by thanking my Republican colleagues for electing me Chairman of this Committee earlier this month. I
pledge to them--and to all of the Committee Members--that I will work diligently to meet the needs of America's veterans
that we are honored to serve. I also would pledge to all of you, as I have to our Ranking Member, Senator Akaka, that I
will maintain the Committee's long tradition of approaching veterans' issues in a constructive, problem-solving and
bipartisan manner.

This approach has worked very well during the 10 years that I have had the privilege of serving on this Committee, and that
will continue under my stewardship. I welcome back to the Committee the returning Members, starting with our Committee's
newly-appointed Ranking Member, Senator Daniel Akaka of Hawaii. I look forward to working with you, Senator, in putting
together and advancing this Committee's agenda. We have already met to discuss a lot of issues and we will continue to meet
together and work together for the good of our veterans. We share those same desires and goals.

I also want to welcome back Members to the Committee with previous service: Senator Specter, who may not be with us this morning--I think he is in transit--Senators Hutchison, Graham and Ensign on the Republican side; Senator Rockefeller who is with us, and Senators Jeffords and Murray on the Democratic side.

Finally, but most particularly, I want to welcome our new Senators who have been chosen to serve on this Committee:
Senator Burr, who is with us this morning; Senator Isakson, who is also with us; Senator Thune, who I think will be joining us;
and Senator Obama, who is with us. Senator Salazar is sitting down waiting to make introduction this morning. Again, thank
you all for being here. I look forward to working with you.

Now, to return to the business at hand. The President has nominated Ambassador Jim Nicholson to serve as Secretary of
Veterans Affairs. Mr. Ambassador, I thank you for accepting this charge. As you will soon find out, running VA is one of
the tougher jobs in Washington, one that will perhaps be made more difficult by two realities that you will face. You will
succeed a man who will be a tough act to follow, and second, it now appears clear that the fiscal environment that you will
inherit will be considerably less friendly than the relatively flush times the VA has enjoyed over the past 4 years. But I
know, Mr. Nicholson, that you are up to the challenge.

When you are confirmed, you will find that this Chairman, and I hope the Committee's Members, will be partners with you
in making sure that America's veterans are continually served in the necessary and the appropriate fashion that we expect and
that I know you anticipate.

Before I proceed, let me offer to you a brief summary of Ambassador Nicholson's extraordinary background. Jim Nicholson
was born on an Iowa farm in 1938. He left Iowa in 1957 to attend the United States Military Academy at West Point. After
graduation in 1961, he served 8 years in active service in the Army as a Ranger and paratrooper. Most notably, he served a
tour in Vietnam from 1965-1966, where he earned, among other decorations, the Bronze Star, the Combat Infantry Badge, the
Air Medal and the Vietnamese Cross of Gallantry.

After returning from Vietnam, then-Captain Nicholson served on active duty for 4 more years until 1970, followed by an
additional 21 years as a Reserve officer. He retired from the Army Reserves in 1991 at the rank of colonel. Mr. Nicholson
holds a masters degree in public policy from Columbia University and a J.D. from the University of Denver.

After practicing law for a relatively brief time in Denver in the 1970s, he launched a successful real estate development
career in Denver. Among other positions, he served as Chairman and President of Renaissance Homes of Colorado. His business career was also marked by extensive community involvement and charitable activities.

In 1986, Mr. Nicholson became a committeeman for the Republican National Committee, and in 1993, he was elected
RNC's vice-chairman, and in 1997, he was elected for a 4-year term as the RNC's Chairman. It was during that time that I grew
to know Jim a great deal better than I had in the past.

In August of 2001, President Bush appointed Mr. Nicholson U.S. Ambassador to the Vatican. From that post, he has
advocated for religious reconciliation, religious freedom in China and Russia, and against the international exploitation
and enslavement of defenseless persons, commonly referred to as human trafficking.

If I may comment, that summarizes what I believe to be an extraordinary career. Veterans are fortunate, I think, that you
have answered the President's call to service, Jim, and I hope that this Committee can offer quick confirmation.

Now, if I may, let me recognize our Committee Members for any comments they would like to make, and let me turn, of
course, to our Ranking Committee Member first, Senator Akaka.


Chairman Craig. Let us now begin with questions, and again, Jim, we appreciate your cooperation with the Committee, and as
I have stressed earlier, we certainly believe that the record that is built here today--you have already heard some very
important concerns expressed by many of my colleagues--is an important one as we work with you in the coming years to make
sure that the Veterans Administration is responsive not only to current veterans' needs, but future veterans' needs.

You have talked about a variety of your priorities. You have obviously, I trust, examined the record of Tony Principi,
who leaves us with a marvelous tenure, and so, let me ask you this question: how do you see your first 100 days at the VA
unfolding, and what would be your immediate priorities?

Mr. Nicholson. I will answer the last part of your question first, Senator Craig, and say that my immediate priorities are
perforce, I think, going to be on those people that are returning from our combat zones in Iraq and Afghanistan and
some of the serious disabling cases that there are there to make sure that we are doing everything in a timely way to make
a seamless transition from those people from their active duty military status to that, into the Veterans Administration status.

And I will say that this is not yet perfected as I understand it. There is still work and emphasis needed for the
transference of their health information and that, you know, we accept them into our system, our hospitals and our centers. And we do it without uncertainty on their part and the part of their families.

I met with some wounded members yesterday and family members, and we talked about this, because some of these
people--I met yesterday with a young Army major and her husband, and she was a Blackhawk pilot in Iraq and incurred an
RPG rocket that blew off her legs. And her copilot was almost injured as seriously, but yet, she landed her helicopter and
saved the crew's life and then went unconscious and woke up two weeks later at Walter Reed and now has this unbelievably
positive attitude, but is inquisitive about, you know, what's next, and what's available to her. We have to take care of that
first and foremost.

The rest of the 100 days, I think, is to consolidate, address the problems that are still out there, one of which I
know that Senator Obama is going to bring up which is a concern of mine and organize and build on the great progress that has been made in the last 4 years.

Chairman Craig. As my last question in this round, let me offer you an easy one. All you have to do is say yes to this
one. Last year, at my insistence, the Committee and the Congress approved legislation transferring title of a parking
lot adjacent to the Boise VA Medical Center from the General Services Administration to the VA. My goal in pressing for the
land transfer was to allow VA to collocate its regional office, now in rented space a substantial distance away in the downtown
area of Boise, near the VA Medical Center so that veterans could secure all needed VA services at a single site.

Do you agree that the colocation of VA facilities at a single site makes sense, and will you give priority attention
to the proposed colocation of the VA Boise Regional Office at the Boise VA Medical Center?

Mr. Nicholson. Yes, I agree.


Mr. Nicholson. I think I have to be intellectually honest. Yes, I believe in the proposition that co-location and
efficiency, primarily for those people that we are serving, the veterans.

Chairman Craig. Exactly.

Mr. Nicholson. As to that specific situation, I am not aware of it.

Chairman Craig. Sure.

Mr. Nicholson. But it sounds good, and I'll be happy to take a look at it.

Chairman Craig. Thank you very much.



Question 1: I have been given a very brief overview of your military service. Please provide me with some details of that service, particularly your combat experience in Vietnam. How has that service equipped you to assume the post of Secretary of Veterans Affairs?

Response: Service to our country is a long tradition in my family. My father was an enlisted man in the Navy during WWII. My father-in-law served in both WWII and Korea. My brother, Brigadier General Jack Nicholson, served 30 years in the Army and was, until now, the Under Secretary of the VA for Memorial Affairs, where he did an outstanding job. One of my sons is a veteran; four of my nephews are Colonels in the Army and Air Force. My 30 years of active and Reserve service in the Army, coupled with my 4 years at West Point, have defined my life. I love the Armed Forces of our country--their courage, their integrity, their sense of duty.

I have had the privilege of wearing the uniform of the United States Army in combat, so I have seen both the horrors of war and the heroes of America making the greatest sacrifices of military service on behalf of their comrades and our Nation.

One cannot leave a battlefield without having profound respect for the courage and cool of all who have served there. One cannot appreciate all the blessings of our freedom without thanking the men and women who serve in war to bring about peace. Their example of unwavering commitment to their mission, no matter how dangerous and uncomfortable, will always reverberate with me and readies me for a mission of service to veterans. I will do my utmost to see that they receive all they have earned, delivered with the dignity they also deserve.

Question 2: Have you had an opportunity to assess Tony Principi's tenure as Secretary? Do you yet see how your tenure will differ from his in style or substance? Are there elements of his leadership you will seek to emulate?

Response: I assess Secretary Principi's tenure as Secretary to have been one of a superb performance. I believe that my tenure should build upon his. To use a Navy metaphor, he began a sea change at the VA and I see a major part of my responsibility to see that this continues and that the VA is brought into the twenty-first century to serve twenty-first century veterans. This implies that we must upgrade both physical stock of the VA (the average age of a VA hospital is over 50 years),
and we must ensure that the quality of medicine given to our veterans is on the cutting edge and both medical care and benefits are given in a more timely way and that we are being consistent. So yes, there are many elements of Secretary Principi's leadership that I would plan to emulate, the principal one of which would be hands-on transparent and accessible management and with a continuing emphasis to serve our veterans with compassion, competency and dignity.

Question 3: I hope very much that this Committee will be able to work cooperatively with you and the VA to solve problems that America's veterans face. To do that, we will need you to appear personally before this Committee to express the Administration's position on issues that concern veterans. Can we count on you to make personal appearances at
Committee hearings when asked?

Response: Yes, you can count on me to make personal appearances at committee hearings when asked.

Question 4: Access to health care for veterans who reside in rural areas of Idaho is particularly difficult, and it is a problem that calls for creative and innovative approaches. I recently learned that Steele Memorial Hospital in Lemhi County, Idaho has donated space that can be used by veterans to secure ``telemedicine'' services from the Boise VA Medical Center. Such arrangements, it seems to me, improve the care provided to rural veterans at no cost to VA.

A. Do you agree that VA and Congress must work together to improve access to VA services for veterans who reside in rural areas? If so, will you place a high priority on improving access to VA services for veterans who reside in rural areas?

B. Will you monitor the progress--and hopefully, the success--of the Lemhi County program and provided periodic updates to me?

Response: A. I agree that VA and Congress should continue to work together to improve access to VA services. Growing up in rural Iowa has given me an appreciation for veterans who reside in rural areas. I will put a high priority on exploring approaches to improve access to VA services in a cost-effective manner.

To assist in addressing the issue of improved access to health care services, VA will continue to look at establishing additional Community Based Outpatient Clinics (CBOCs). Since CBOCs are scheduled to be opened in Fiscal Year (FY) 2005.

Response B. The Boise VA Medical Center (VAMC) has worked with Steele Memorial Hospital in Salmon, Idaho to install two telehealth devices that will give VA the capability to provide both primary care and mental health care services to veterans in this area (a Viterion 500, and a video phone). The Viterion 500 provides the capability of doing physiological monitoring remotely. The video phone will enable a mental health provider to interact directly with a patient. The Boise VAMC has already established services for two VA patients at the Steele Memorial site and they plan to add additional veterans. In addition, VA
has placed monitors in the private residences of two other veterans in the Salmon area who are not able to easily access the Steele Memorial Hospital site.

The Boise VAMC will provide periodic updates about this program to VA Central Office officials. In addition, they would be pleased to provide your office with quarterly progress reports on the implementation of telehealth services in the Salmon area and other parts of rural Idaho. These reports will highlight the locations of telehealth sites, the number of veterans served and the type of services offered.

Question 5: Secretary Principi undertook an extensive review of VAs hospital infrastructure-a review that is called the Capital Asset Realignment for Enhanced Services, or ``CARES'', initiative. The Secretary proposed that three VA Medical Centers be closed (in Pittsburgh, Cleveland, and Gulfport, Mississippi ), that VA build hospitals in two cities that have no VA medical centers (Las Vegas and Orlando), and that decisions concerning the fates of 15 other VA Medical Centers be deferred pending further study.

A. Have you yet had the opportunity to consider these decisions? Do you think you ought to reconsider then, and get your own assessment of VAs future medical infrastructure needs? Or do you think you ought to trust in the validity and soundness of these decisions and simply implement them?

Response: A. I have been briefed regarding former Secretary Principi's decisions on CARES as well as the comprehensive process that lead up to his decisions. At this time, I intend to move forward on CARES implementation. I will be briefed on a regular basis regarding the additional studies that are currently underway and regarding implementation of all CARES initiatives through VHA's Strategic Planning Process.

The CARES process was the most comprehensive assessment of VA capital infrastructure and the demand for VA health care ever achieved. The evaluation and review provided by the CARES commission insured that the process was independent and objective. Their well-reasoned report provides a road map for moving VA forward in planning for, investing
in, and locating our capital facilities. I believe that the CARES report presents a carefully studied and strategically sound path for the Department, and I will use it as a blueprint for VAs future.

B. One of the major criticisms of the CARES initiative was its failure to address VAs needs for long-term care facilities. Secretary Principi advised this Committee that a long-term care review would take place later. Do you intend to carry out Secretary Principi's commitment to assess VAs needs for long-term care facilities? Where does that review now stand?

Response: B. I fully support the continuation of VA's assessment regarding Long Term Care (LTC). VHA has recently completed new runs on LTC workload projects by market and priority category. Strategic Planning Guidance will be going out to the VISNs and facilities in the next month requesting operational plans to include Strategic Initiatives. Each VISN will prioritize its strategic initiatives by year and within the year along with cost projects for inclusion in the VISN and National Strategic Plan. Implementation of all CARES initiatives, including LTC initiatives, is dependent on future funding.

Question 6: During the past few budget cycles, the Administration has proposed, at various times, that so called ``low-priority'' VA patients pay an annual deductible (of $1,500), an annual enrollment fee (of $250), and that prescription drug co-payments be increased (from $7 per prescription per month to $15). These proposals were greeted with some skepticism on the Hill.

A. What is your position on proposals to increase the costs borne by ``low priority'' veterans seeking care at VA? Do you think some cost-sharing approaches make more sense than others? Do you think that this is a fair way of raising the level of funding available to VA?

B. Do you believe that it makes sense for VA to impose fees on some classes of veterans and not on others? Does it make sense for VA to try to tamp down demand for care by ``low-priority'' patients so that it can devote more of its resources to the care of the service disabled and the poor?

Response: A. Imposing cost sharing provisions, within reason, on veterans who have a lower priority for care should help to focus resources towards the care of those veterans who need us most.

Through eligibility reform legislation, Congress requires the VA Secretary to decide annually whether VA has adequate resources to provide timely, high quality care for all enrolled veterans. Each year, VA reviews actuarial projections of the demand for VA health care in light of available budgetary resources and develops policies accordingly.

Response: B. VA has proposed cost-sharing policies for Priority 7 and 8 enrollees as a means of balancing veteran demand for VA health care and the finite resources available, and ensuring that VA has the capacity to serve those veterans who need us most--veterans with service-connected medical conditions, special needs, and low incomes. VA is committed to serving these veterans who depend upon VA for their health care and represent our core constituency.

Thus, VA expects that those veterans now enrolled in priority groups 7 and 8 who frequently use VA health care services will likely pay the enrollment fee in order to continue to receive those services. However, many other veterans in priority groups 7 and 8 do not currently use the system, or use it very infrequently. Those veterans will likely not pay the enrollment fee, but rather will leave the VA system and use other health care options available to them.

In some cases, the savings and additional collections associated with cost sharing proposals could help avoid more drastic enrollment decisions such as disenrollment of current users.

Question 7: Do you believe that Operation Iraqi Freedom troops will more likely be afflicted with Post-Traumatic Stress Disorder than their predecessors in prior wars? Does this ``no rear echelon'' theory make sense to you? Does your combat experience in Vietnam give you any insight on this theory of extraordinary stress from Iraq combat?

Response: War related psychiatric disorders among veterans of our Nation's wars for the past 60+ years have resulted in disorder rates from 10-20% of troops (all services) with higher rates associated with increased combat exposure and injury. The mental health problems of veterans of the Vietnam war have been studied with the latest psychological tools and scientific approaches and revealed that while 30% of male Vietnam theater veterans met diagnostic criteria for PTSD at some point in their lives, only 15% met those criteria when they were assessed at a point some 10 years after the war was over. Almost
everyone exposed to the horrors of war comes away from the experience with some emotional distress, but our data suggests that 70-85% of combatants may be expected to have no long term sequelae from the war. Features of combat associated with stress related disorders include: frequency of exposure to threat, including injuries sustained; number of actual combat experiences, and repeated tours of duty in the war zone. To the extent that these are features of the war in Iraq, one may expect a rate of emotional problems including, but not limited to PTSD (e.g. depression, substance use disorders) at least comparable to those in Vietnam. Given current efforts at early identification of emotional stress in theatre and post-deployment, by DoD and VA clinicians it may be possible to lower the incidence of long term problems by a concentrated effort at early detection and care.

The ``no rear echelon'' theory is reasonable given the nature of the current war in Iraq. The insurgency is a form of guerilla warfare in which attacks can occur at any place and time. Established bases and supply convoys are subject to rocket, mortar and Improvised Explosive Devices (IED) attack as well as more traditional forms of combat such as combat patrols fighting in Fallujah. These experiences have been confirmed by our troops and by the military healthcare providers who have been in theatre and made presentations to VA staff.

It is reasonable to compare aspects of the war in Vietnam to the current experience in Iraq. Urban combat, as in Fallujah, for example, was experienced in Vietnam in Hue and other cities during the Tet Offensive. Jungle warfare has similar stresses to urban warfare including the enemy being hidden from sight either by jungle or buildings. Guerilla warfare, in which one cannot tell friend from foe; when the enemy attacks from amidst innocent civilians; when mines and IEDs are used to attack without warning and with the enemy at distance so they cannot be counterattacked, are all extremely anxiety provoking.
Modern body armor, and evolving combat doctrine and training of our troops, and the superb in theater medical support received by troops in combat, can strengthen our troops against these stresses.

Question 8: Some years back, VA reorganized its health care bureaucracy into 22 ``Veterans Integrated Service Networks'' to decentralize decision-making and to encourage innovation by managers involved in the actual care of patients. More recently, authority for critical decisions--for example, VAs recent review of its medical care infrastructure needs--appears to be migrating back to VA headquarters.

A. As a matter of management philosophy, do you tend to delegate decision-making authority? Or do you believe that--at least in Government--authority has to be centralized in easily-identified senior officials who are accountable to the President and to the oversight of Congress?

Response A. There is always a tension between centralization and decentralization. A system that is too centralized is grossly ineffective and inefficient. On the other hand, a system that is too decentralized loses the integration and cohesiveness that defines it as a ``system.'' VA operates a large, integrated health care system that functions both efficiently and effectively. Improvements in quality, access, veteran satisfaction, and efficiency are measurable and have been widely recognized. Health care policy is established centrally in Washington and is expected to be executed uniformly throughout all 21 Veterans Integrated Service Networks (VISNs). I will expect the VISNs to address the unique challenges of their respective nvironments, and I will hold management at all levels accountable for implementing national policy consistently. I intend to work with VHAs national and Network leadership to assure that we address the local, regional, and national needs of veterans effectively. I believe in performance measurement, and I will be very aware of performance at all levels of the organization.

Question 9: As you are undoubtedly aware, the veteran population is aging rapidly--recent statistics show that nearly 60% of the veteran population is over age 55. This trend suggests to me that VA will face increasing demand for long-term care services. Yet VA is only required to provide in-patient-based long-term care--that is, nursing home care--to the most severely disabled of the ``service-connected'' veteran population.

A. Do you think VA can meet the demand of aging baby-boomers for long-term nursing home care? Do you think VA ought to try to meet the need? Do you have any sense of how much it would cost VA to take on this mission?

Response A. VA can meet the Long Term Care needs of all veterans for whom we are required to provide such care. VA policy is to provide for the institutional needs of veterans in priorities 1-3, and those with special needs. By reserving nursing home care for those situations in which a veteran can no longer safely be maintained at home, and by providing long-term care in the least restrictive setting that is compatible with a veteran's medical condition and personal circumstances, we can create a medical and extended care benefits package that is available to veterans who need them most. Non-institutional care is a basic part of the benefits package for all enrolled veterans. VAs policy is to increase our capacity to provide non-institutional home and community-based care by 18% annually, in order to be able to meet the full need of enrolled veterans by 2011. A
detailed cost estimate, however, is unavailable at this time.

B. Do you think the current policy of mandating that long-term care be provided only to those with the most severe of service-connected disabilities strikes the proper balance of assuring that available resources are directed to those having the best claim to VA-provided care?

Response B.: Yes. The current law assures that the most severely disabled service-connected veterans will be cared for if they need nursing home care, while preserving flexibility for VA to provide care for less severely disabled veterans, the indigent and those with special needs as resources permit.

C. Where do outpatient-based long-term care services fit into the equation? Does the requirement that VA provide such services to even low-priority veterans divert resources away from the neediest veterans--those who need in-patient care--to deal with service-connected conditions?

Response C.: VA believes that long-term care should be provided in the least restrictive setting that is compatible with the veteran's medical condition and personal circumstances, and whenever possible in non-institutional home- and community-based settings. Supporting veterans in their local communities maintains their established ties with spouse, family, friends and their spiritual community. These contacts help provide the vital social, emotional, and spiritual elements that complement the physical components of care that VA traditionally provides in its hospitals and clinics. The availability of a spectrum of home- and community-based services often prevents unnecessary--and costly--institutionalization of veterans. It is as essential that these services be available to enrolled veterans, including lower priority veterans, as it is that acute care services be
available to them. The cost of non-institutional home- and community-based services is very modest in comparison to nursing home costs, and has relatively little impact on the availability of in-patient services for the neediest veterans. A far greater impediment to the most efficient allocation of resources is the requirement of the Millennium Act (Public Law 106-117) that VA maintain an average daily census of 13,391 in its own Nursing Home Care Units. The President's budget for
fiscal year 2006 proposes repeal of that provision.

Question 10: One of the challenges you will confront as Secretary is the backlog of compensation and pension claims awaiting VA adjudication. When Secretary Principi appeared before this Committee for his confirmation hearing in 2001, he committed to reduce the backlog and improve the accuracy of decisions rendered.

A. Is this mission accomplished? Is there still more work to do to speed claims processing and improve quality? Have you thought of a strategy you will employ to finish the job?

Response A.: Improvement of benefits claims processing has been an important goal of the President. Obviously, much progress has been made both in reducing the backlog and timeliness--and especially in the reduction of claims that had been pending from our oldest veterans who had been waiting more than a year for decisions on their claims. I am aware that quality levels have also significantly improved.

The changes made included making the regional offices--and the claims processing procedures and supporting IT applications--more consistent and efficient and improving the training and oversight of the programs. These major changes have resulted in improvements in production, timeliness, and quality.

While there has been significant success, there is much to be done. VBA has seen large increases in incoming claims and appeals, both from the returning servicemembers and from older veterans who had not previously submitted claims. We will continue to emphasize the improvements necessary to give our veterans the benefits they deserve and which the Congress has so generously made available.

Question 11: The budget for the current fiscal year is relatively tight compared to recent years and I expect the one which the Administration will propose for fiscal year 2006 will be tighter still. These realities have caused VA to prioritize eligibility for purposes of healthcare eligibility.

A. Do you think VA ought to adopt similar systems of prioritizing the processing of claims for benefits? For example, should claims filed by veterans who have just returned from a combat deployment go to the head of the line?

Should applications for benefits submitted by older veterans go first? Or, should VA simply adopt a ``first-in, first-out'' approach to prioritizing claims?

Response A. I have learned that VBA is giving top priority to the benefit claims of all returning war veterans who are seriously injured, and certainly providing the best possible service to these returning heroes must remain our highest priority. VBA has also advised me that claims from terminally ill veterans, homeless veterans, veterans with severe financial hardship and former prisoners of war also receive priority attention. I believe that priority processing for these claimants is also most appropriate.

Our goal must be to provide quality, timely, and compassionate service to all claimants. Reaching our goal will depend upon a well-trained staff who properly develop the claims submitted and then act on those claims as soon as they are ready to rate. I do not believe that VBA should adopt a strict first-in, first-out process.

B. Three years ago, VA established a ``Tiger Team'' to speed the processing of older claims submitted by World War II veterans. Should similar specialized teams handle other high priority claims, e.g., claims filed by servicemembers returning from Iraq?

Response B. The Under Secretary for Benefits has made me aware of the success of some of the specialized processing initiatives that VBA has undertaken in recent years, including the Tiger Team, the Pension Maintenance Centers, and the centralized processing of in-service death claims. VBA is now centralizing the rating aspects of the Benefits Delivery at Discharge program to two regional offices, Salt Lake and Winston Salem. These initiatives have demonstrated that specialized
processing can provide better and more efficient service to veterans. I will look for additional opportunities to improve the delivery of benefits and services through specialization.

Question 12: VA spending from its compensation and pension account has grown by approximately 50 percent in the past 5 years.

A. Do you have any sense of what is driving these increases? Response A. A number of factors have been identified to me as contributing to the increase in expenditures over the last 5 years. Those are listed below.

There has been a 6% increase in the total number of beneficiaries receiving benefits from the VA from EOY1999 through EOY2004, an increase of 196,000 beneficiaries.

Diabetes Mellitus and Prostate Cancer were added as presumptive conditions related to herbicide exposure, resulting in many new beneficiaries and increased ratings. Because of the nature of the two conditions, the disability evaluations for these conditions tend to increase fairly rapidly. In June 2001, just prior to adding diabetes as a presumptive condition, VA was paying about 38,000 veterans for this condition. By December 2004, VA was paying 199,000 such claims.
Likewise, in June 2001, VA was paying approximately 18,000 prostate cancer claims. By December 2004, VA was paying almost 30,000 claims.

VAs efforts to reduce the backlog of claims increased the number and amount of retroactive benefits paid.

Vietnam Era veterans filed claims at rates higher than World War II and Korean War veterans, and veterans of the Gulf Era have higher application rates than Vietnam Era veterans. This may be due, in, part, to VA's expanded outreach programs and the Benefits Delivery at Discharge initiative.

Question 13: As long as I have been a Member of the Veterans Affairs Committee, the problems confronting the compensation and pension system have been the same: the backlog of claims and appeals is too high; it takes too long for VA to process claims; and the accuracy of decisions made on applications for benefits is not as good as it ought to be. The Congress and VA have taken various approaches to solving these problems-more staff has been hired, computer systems have been bought, and VAs organizational structures have been repeatedly ``re-engineered''. Yet problems persist.

A. Do you believe it is time for Congress and the Administration to take a closer look at the disability claims system to see if there are structural flaws within the claims process that are outside VA's control? Why do these problems seem to be resistant to management reforms and money infusions?

Response A. I would welcome working with you regarding issues that, while well intentioned, sometimes have adverse effects and merely clog the system. I would point out that the Congress has already authorized in the National Defense Authorization Act for 2003, a Veterans Disability Benefits Commission to look at the whole range of disability compensation benefits available to veterans from VA.

Question 14: On February 3, I will convene a hearing to examine the adequacy of the benefits provided to the surviving spouses and children of those who die in or as a result of service. From what I have seen so far, survivors must navigate through a confusing maze of services provided by at least three different Federal agencies to secure benefits. Making matters even more confusing, cash benefits provided by some agencies are offset from those provided by others--in plain
English, cash payments are allowed from two agencies, for example VA and DoD, but not simultaneously. Will you commit to work with other Department Secretaries to end this confusion?

Response: I wholeheartedly agree that we should strive to make the benefits claims processes for surviving spouses and children of servicemembers and veterans as simple and straightforward as possible. I will be pleased to work with other Administration officials and with the Congress to ensure coordination of both survivors' benefits and survivors' benefits claims processes.

Question 15: Do you have any conflicts of interest which you have not fully disclosed to the Committee? Do you know of any other matter which, if known to the Committee, might affect the Committee's recommendation to the Senate with respect to your nomination?

Response: No, I do not have any conflicts of interest that have not fully been disclosed to the Committee or any matters that might affect the Committee's recommendation.

Question 16: Have you fully and accurately provided financial and other information requested by the Committee, and do you now affirm that the information provided is complete, accurate, and provided in a form not designed to evade or deceive?

Response: Yes.

Question 17: Do you agree to supply the Committee suchnon-privileged information, materials, and documents as may be requested by the Committee in its oversight and legislative capacities for so long as you shall serve in the position for which you now seek confirmation?

Response: Yes.

Question 18: An organization named the Lung Cancer Alliance has requested, by the attached White Paper, that I pose to you a question relating to a potential establishment of a pilot program for the screening, early detection and management of lung cancer. Would you please review that attached White Paper and comment?

Response: Routine screening for lung cancer is not recommended at this time, as there is currently no evidence of effectiveness. The Federal Government has two large trials underway by the National Cancer Institute, so there doesn't appear to be a need for a duplicative study by VA and DoD. There is no evidence that the lung cancers that veterans
get by virtue of their smoking, exposure to combustion products, or any other exposures would behave differently from lung cancers that non-veterans get. Therefore, there is no compelling reason to duplicate in the veteran or military population the studies already underway in the general population.

Given that cigarette smoking is, by far, the most important risk factor for lung cancer, the most effective method of preventing lung cancer deaths is by keeping people from smoking in the first place and helping those who do smoke to quit. The Veterans Health Administration has a large-scale, effective program in place to assist those who smoke and are interested in quitting. A clinical practice guideline on tobacco use cessation, developed jointly by the VHA and the Department
of Defense, has recently been updated and is available at

Lung cancer is a significant public health concern, with an estimated burden of 172,570 new cases in 2005 (13% of all cancer diagnoses). It is the leading cause of cancer-related deaths (29% of all cancer deaths), estimated in 163,510 fatalities for both men and women in 2005. Both incidence rates (new cases) and mortality rates (deaths) in men have been declining for more than a decade, but they have only recently started to decline for women. Since 1987, more women
have died each year of lung cancer than from breast cancer. Cigarette smoking is by far the most important risk factor for lung cancer, implicated in 90% of lung cancers in men and 78% in women. Cigar and pipe smoking, environmental tobacco smoke exposure, and exposure to other environmental agents, especially asbestos and radon, are also risk factors for lung cancer.

Early detection of lung cancer through screening has not been shown to be effective in reducing deaths from lung cancer. Screening for lung cancer is not presently recommended by any major medical professional organization. A recent review of the evidence about lung cancer screening done by the U.S. Preventive Services Task Force, an independent panel of experts in primary care and prevention that systematically reviews the evidence of effectiveness and develops recommendations for clinical preventive services, concluded that ``the evidence is insufficient to recommend for or against screening asymptomatic persons for lung cancer with either low dose computerized tomography, chest x-ray, sputum cytology, or a combination of these tests'' (Annals of Internal Medicine. 2004; 140:738-9).

The National Cancer Institute (NCI), part of the National Institutes of Health, has two large studies underway to determine if
screening for lung cancer is effective. Both are randomized controlled trials, the best type of study design for measuring the effectiveness of screening tests. The first of these, the Prostate, Lung, Colorectal, and Ovarian Cancer Screening Trial (PLCO), enrolled over 148,000 men and women participants between the ages of 55 and 74. Enrollment took place from 1992 to 2001 at ten centers around the country. Lung cancer screening was done by chest x-ray upon entry and annually for 3 years for smokers and for 2 years for never-smokers for those in the intervention group. Participants in the control group received routine health care from their physicians. All participants will be followed for up to 16 years. Results of the PLCO study are not expected for several years.

The second NCI-funded screening study is the National Lung Screening Trial (NLST), launched in 2002. This study is comparing two ways of detecting lung cancer: spiral computed tomography (CT) and standard chest x-ray, and aims to show if one test is better at reducing deaths from lung cancer than the other. Over 53,000 current or former smokers aged 55 to 74 years have been enrolled in the trial at more than 30 study sites across the country. Participants have been randomly assigned to receive either chest x-ray or spiral CT every year for 3 years and all will be followed by yearly surveys until 2009. Results of the NLST will not be available until then.

Both studies will provide evidence about the benefits, if any, of screening for lung cancer. They will also provide information about harms of screening. All screening tests have the potential for both benefits and harms. One common harm is false-positive tests results--the finding of an abnormality that appears to be a cancer that, upon further testing, turns out to be benign. In lung cancer screening, suspicious areas on chest x-ray or spiral CT often require invasive tests (lung biopsies done either through the chest wall with a needle or through open chest surgery) to determine if they are malignant or benign. Some screening tests may find many areas that appear to be suspicious, but turn out to be benign, thus subjecting patients to the
risks of the invasive tests for no benefit.

Another potential harm is called ``over-diagnosis''--the finding of a condition that would not have become clinically significant had it not been detected by screening. Autopsy studies show that some people die with lung cancer, rather than from it. If improved screening tests find many small lung cancers that would not be likely to progress to the point of causing clinical disease and death, then the detection and subsequent treatment of these cancers might lead to more harm than
good. The randomized trials underway for lung cancer screening (PLCO and NLST) will help to determine the extent to which these harms may occur, if screening were recommended and applied to large numbers of persons.

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