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Good Morning Everybody. Thank you Dave for your hospitality, not I have been looking forward to this opportunity of coming out here and Mardi Anderson and I have been talking about this I think for the last two and half years that I have been in this job. And finally made it happen that I am here because as you know, I am sure we have a major hospital here Research Center parallel VA Medical Center and I spent a lot of time there yesterday and will again today. And I have really welcome the opportunity to speak to group of people like you, about this agency that I head up. Because I have I found that the VA is really not very well known or understood, in the country I was struck. About six weeks after I was in the jail I was invited to the Rotary Club in Phoenix. And I did and I got a very nice letter from a guy who is a veteran of the Korean War and become very successful big car dealer in the western part of the United States, Phoenix in Southern California. And he said, I was fascinated by what you had to say about the VAs and I had no idea. He said, I think the VA is the greatest story never told. You know it sort of a motivated me to when appropriate and possible to tell the story about the VA because it's the VA and its mission has remained I think directly to - probably at least 70 million Americans. There are 24 million living veterans. There are there are only been 48 million veterans in our country's history. So the half of us who served in uniform are live and it is to this agency that falls the the mission of taking care of those people as defined by you know, the statues and the will of the people of the country. And I did grew up in Iowa, its I often say rural Iowa and then people say well, that's a redundancy. But I know I don't have to tell you all that President Hoover was born in West Branch, Iowa. I grew up in little town of called Struble which was on the the West Branch of the Floyd river and if any of you ever following any of the stuff, there was a massive flood in the 50s and North West Iowa and that was the Floyd River. Struble is incorporated town, has 99 people, nine of those were my family growing up there. And I it was a quite cultural shock going through Manhattan trying to find the Port Authority Bus Depot and get a bus up the Hudson river to the West Point and looking around at those buildings after growing up in that environment. But I got up there and after a few weeks I realized everybody put their trousers on one leg at a time and and but nobody would believe that I came from such a little town. Two of my classmates promised that if if we did graduate they were going to come out and see if it really was true. So by the grace of god we graduated and they kept their word. In fact one of them is is a guy that, he used to be on the faculty here at the Business School [0:05:42] ____ and I asked him just to we spent a week of our graduation leave out there. But they left never being convinced that it was called Struble because the only two signs there say resume speed it was there on either side of great northern railway track and then right down the middle towards about some 60 yards from my the house that we had in Struble. And - so it was like a place though that had a great military tradition. It seemed like all the farmers and people out there had served in military and my dad was a veteran as been noted, I am a veteran, my son is a veteran, my brother is a veteran. And I have four nephews and they are active duty and I am really proud of one of them because he just kept it up on the Brigadier Generals list. And we military types see - General Casey was at my office last week for a meeting, collaborating on caring for wounded veterans and he told me that my nephew was the only guy that's in command to get picked for Brigadier General. He has been commanding a brigade in Afghanistan for now 15 plus months. So we have in my family a strong tradition of the military and but I was happily in esconced in Rome. Like that I was thinking about this morning driving over here on calm Sunday in 2004, Secretary Shultz and his wife came to see us. He was accompanied by Dave Riley, President of Chevron, he is an old friend of mine from RNC days, but so I took them to mass in St. Peter Square. That was a beautiful morning. It was just like this but it was it was deceptably cold and breezing and you asked Shultz about this sometime he sat there if he hadn't been a crusty prideful marine, he would have he would have left because you know he is not sitting there it was peoples mass and we were sitting from here to Dick, you know, from the Pope, they had us right up there in front. And he shivered for two and a half hours and I felt so sorry, I offered to take him out, he said, no way. But he couldn't wait to get back to our residence, he had a good stiff one we need to warm him up. And then I got the call from the President asking me if I would come back and take over the VA and I am a veteran. And I said, obviously and then but I didn't know much about the VA either. So I will tell you a little bit about it and then hopefully we can have a colloquia I have a few points that I think might or should be of interest to you in your various capacities here because this is this is a big growing agency it's the second largest agency in the United States government in terms of people. You know, employing 42,000 people and it's an interesting agency because the I am the CEO of the largest integrated healthcare provider in the world. And employ over 60,000 nurses including those affiliated like there are here at Stanford Medical School, we have about 45,000 doctors. And we care, treat over a million patients a week in this system today. And it's it's pretty darn good. In fact it's it's very good. But like so many things and it's extremely relevant in environment they were in today with a highly controversial war going on, it's much better than the perception sort of in our society, generally I think, which is another reason I welcome the chance to to talk about it. The if you think sort of the predicate of the way we take care of veterans, it goes back to Washington you know. They talked him into leaving that genteel life in Northern neck of Virginia and going up to Boston and merry up with those Yankees, that's what he did. And after the first day with them he wrote in his journal that he said, "Man, are these people ever dirty, and they are so ornery." It said I sure hope they scare British because they scare the hell out of me. And he went that was in 1775. And he went from there until 1783 when he signed over that that army and then admonished this new country saying, we need to take care of those people. His words were, "we owe them debt". And that's that's the predicate. Lincoln affirmed that strongly in 1864 when it look liked that Union was going to hold and he said he said, we must care for him who has borne this battle and his widow and his orphan. That's the mantra of the VA today. And there is no other country in the world that comes remotely close in taking care of its veterans like we do. And I have a perspective on that because after the President did ask me to to come home, being in Rome and really big diplomatic place you know, 175 countries that are accredited to the Vatican, almost that many to Italy, the World Food Program is there, Food and Agricultural organization UN as well, diplomats. When you are being called back to you will be a minister in your government, that was interesting act, especially from United States. So these people would come around say, what is it, Nicholson, you are going to do now and I say, well if I am confirmed by the Senate I will be the Secretary the Minister of our department for Veterans affairs. And that was met with blank stares. No one had a concept of that being at at the minister level of the government in first world countries. So no one no one comes close to us in taking care of our veterans and of course that's in my opinion in fact the way it ought be. Washington also said later, once he said the you know, the mark of a society is the way it takes care of those who keeps it free. And by that measure so many others were also great country. It was in 1988 under last year of President Reagan that legislation was passed that upgraded to cabinet level status and so in 89' excuse me it became the Cabinet level. I am only the fifth Secretary it has ever had. And I like to use, again going back to those days of my youth and it was milk cows, we literally lived on the farm that we worked for farmers all the time. They were all around us and you know, milking stool has three legs and so I used that metaphor sort of yes, the VA, it has three legs, it has a health leg, a benefits leg and a burial leg a memorial leg. And the scale in each of these is is large. The health leg I have touched on. Hopefully all of you have seen the VA Hospital here, has everybody seen that? Well, we have a 155 of those from Main to Manila. We have about 833 clinics in addition to those because the paradigm is shifting from being an inpatient healthcare provider to being an outpatient. And it's really working well and so we have these clinics we call them community based outpatient clinics. And we have 833 of those some of those would be in a huge office building. We were building one in Columbus, Ohio and have over 100,000 square feet. But they are still called a clinic because they have no inpatient capability. And then we have about 230 of what we call Vet centers which are sort of store front, reception areas trying to pull veterans in to find out more about what they are entitled to and you know, confidential way of particularly those who are experiencing some mental or psychological problems come in misery with we staff those with veterans and are currently trying to staff them with the veterans of the global war on terror. In a nutshell that's the health leg. Benefits leg is also very huge and and the theory there is if by serving your country, taking the oath, putting on the uniform, going wherever asked, you are diminished in some way as a result of that, physically or mentally, you will be compensated. Now there are other cards of the benefit, the package that you are familiar with you have all heard of the GI Bill, the Guaranteed Home Mortgage program we just now, last spring actually, made our 18 million long for a veteran we called a young guy and so making that moment was just a cab rank thing, he is from Texas and he had lost an eye in Iraq and he got a nice little home in Plano, Texas and he guaranteed the loan, he had no down payment and honest to God, it had a white picket fence around it. I got photographs of it. We do you know the GI Bill Education Program, I run the sixth largest life insurance company in the United States. We were about $1.3 trillion of risk on her books and a very big vocational rehabilitator of educational program. That's benefits. And finally the memorial, the burial part of it again in this plethora of services that we want to have available for those who have served this final dignified I have to use the word twine like setting for them to be buried, a permanent repose for us to honor them and indefinitely. That is one of the biggest expansion since the Civil War because we are having real queuing of people passing on in the World War II generation. 1100 World War II veterans die everyday. And about 1900 veterans total passed away every day. And we have to be there for and so it were a big expansion and its not hard to buy you know, two to 500 acre placid ground you know, metropolitan area these days and its not cheap here. But we are getting it done and doing well there. So that's in a nutshell that's it. The budget for the current fiscal year is about $83 billion. And that's increase of 77 percent since President Bush came into office. We had begun hard from the other side that were you know, being too niggard in taking care of veterans and we were all wrapped up in the politics of the war, there is no question about that, which is one of my challenges, in trying to maintain the morale of a huge workforce that really really is pretty darn good. And I have I am of like you, free enterprise individual, an opportunity sort of person though I am I have been pretty quite impressed by the people at VA and their commitment. Now I often ask the doctors, especially how we are able to keep them you know, some of these prominent physicians make three-four times as much money and answer is usually always the same which is when I get to teach, I get to do research and I get to treat veterans. Now it might be worth noting this was what one man's vision can do to a huge organization like this. When World War II was ending we had 16 million people in uniform. And President Truman asked General Bradley if he would take over the VA, then called the Veterans Administration, and Bradley asked him if he could respectfully decline. And Truman looks a little why? And he said, well, to be honest I would like to be the Chief of Staff of the Army. And he said, well may be we can get to that, but right now I need you at the VA and he took the job and did it for two years. And they were in a huge expansion to be able to take care of all these people to only hold this duty that we are coming home, coming out of uniform. And Bradley had this vision of citing these new hospitals next to existing academic medical facilities. And his I read his autobiography and it was it was clear that he wanted to do this so that he could enhance the quality of medicine in really important places. And it really has worked. So out of the 155 major medical facilities that we have, I think we have a 110 that are located like we have here at Stanford with a very strong collaborative relationship. Our Chief of Staff of our hospital for example, also is a full time appointee of Medical Faculty here at Stanford. And that's not unusual. And it really it really has raised the level of our excellence. The VA by the way has had two two VA doctors who won Nobel Prize for Medicine. The first liver transplant ever done successfully was done at the VA Hospital in Denver. We developed the pacemaker; the CAT scan was developed by the VA. We are in final clinical testing right now, the vaccine for shingles. And I don't know if any of you have ever had shingles, I hope you haven't, I haven't either. But I had a law partner in Denver who did and in his face. And some days he used to think he is going to die and some days he was afraid he wouldn't, it was so painful. And so we are we are about there. We think this is going to be a great break through. So there is - there is a lot of the excellence here and that's the point that I would like to make connected historically with the VA, which which too belies the perceptions. Although the perceptions have improved and I think Tom probably has it yeah, if it's sitting right out there. It's a book, I mean he has read it on the plane flying out and it's called "The Best Care Anywhere" written by a guy whom I don't know, started to write an article for Fortune about Healthcare in America. And would pitiful, expensive stay that's in and and ended up going back to Fortune and saying that all these roads are converging on the excellence of the VA. And they said, we don't want to write an article on because the excellence of VA so that we are giving an away fee and he wrote that book. And there is a lot of empirical data in there about the VA and what we are able to do and why and that it is a unitary system. There is not question. It is it's socialized medicine. But its socialized medicine that's been practiced very efficiently and safely. And the main reason the principle reason, or rather the principle reason is that we have perfected the electronic medical record. And we have now eight million veterans enrolled in our system for healthcare. And every one of them has an electronic medical record. And if you think about the - what that can do, just in portability, veterans who like everybody else, like to move around, especially in winter for living in the North East. Well, they fly to Tucson, if they have some medical event, they walk into our hospital in Tucson, all they have to do is remember their name and the last four number self security, and we will bring up a contemporary version of their medical report. When Katrina struck down in the Gulf Coast, it took up two of our hospitals big hospital in New Orleans, we evacuated hundreds and hundreds of patients and tens of thousand of veterans, they had to move out. We did not loose one veteran patient, not one medical record. In the Civilian Sector they lost over a million medical records. So - you know the continuity of it. But it's also well, extraordinary for safety. And if you go to a VA Hospital you will see that every everybody has a bar coated arm band and if you watch attendance, nurses, doctors, nurses aids, anybody dispensing any care, they take a what looks like that machine when you are turning in your Hertz rental car, they take that and they can aim at it that the bar code on the patient and then they if they do it their own, and then they do the laptop sitting there on on the car, to make sure that that whatever is happening, and its the right patient getting the right prescriptions and if if there is something wrong, big buzzers go off on that laptop. And so we we dispense about 250 million pharmacological prescriptions a year. And our mistake rate I think is five places to the right of the decimal after 99. It's almost perfect we get it almost perfect, which is really extraordinary. And and you probably know, these very sad statistics in America. There are these graphical scales that would show you that. Its - it came out to bungee jumping and you know, the middle that's may be being a rodeo rider and then you know,than over to the right is commercial airline travel and going into the VA Hospital and over to the left with bungee jumping just going into a lot of regular hospital. They kill twice as many people in there by mistakes made in those hospital each year as die in the highways. So that is just not happening at the VA. And it's the main point of this would be that it's the electronic medical record. Now to be a veteran you have to come through the military system and you have some officers here today well known, and every one of them that comes to us today with paper medical record. Now Bob Gates was sitting here, I'd like to say comments on Bob to make behalf with him and I just I chaired the Cabinet Level Task Force, has been working on these things since the Walter Reed inbroglio which is not of VA Hospital, but nevertheless has caused us to refocus on ourselves. I was in Iraq last summer and two marines got injured badly at Fallujah where we were. We end up in Landstuhl two days later, and just happened to be going into the hospital at the same time they were really wheeling them in on gurnies. And they have these big files of paper on their chest taped with duct tape. And I I was struck because I had been there and some of these kids were showing with a great pride their equipment, their sculpts, their target acquisition equipment, night vision, state of the art, 21st century stuff, yeah and their medical records were in the paper. And you know the the things that are missing, not legible, that go with that. And so that is something that we badly need and I will say that because you all took big strategic looks at the systems and its something that we badly need in America to some people estimate it would it would save $80 billion a year in healthcare cost without evaluating you know, the lives that would be saved as a result. The VA is in transformation. And I know you talk a lot value around here but to you know transforming big organizations and making the cultural changes that go with that, we are we are in that at the VA and I am trying to leave that information technology aside from the medical record and then we have data on millions and millions of veterans as you would expect and the security and the cost of the events is a big issue. And we had we had a major breach of that, it was still over a year ago. An employee took a hard drive home, it was stolen and he had over 23 million veteran names on that. So I have totally restructuring the IT part of that. We are in a mode that I have applied throughout the system to try to eradicate our hospitals of staff infections which also kill tens and tens of thousand of people a year. And we've test this at our Pittsburgh hospital and we reduced that infections in the first year by 40 percent overall and and the, in the ICU's we reduced it by 80 percent. And so I would apply this now system wide and it has been well embraced by our people. We have an epidemic of diabetes among veterans today and one out of four veterans that we now see has diabetes. Most of this is avoidable, its type II adult onset diabetes and it's a result of life style. So, in addition everything else that I have got, these clinicians doing and I will mention a couple of key points in a minute. Having all of them doing a body mass assessment and and counseling with these veterans to try to change their life style; so as to avoid diabetes because it's such an awful disease. I don't have to tell you it's precursor of so many other things. And we currently are doing 6000 amputations a year where veterans and I will give you a perspective on that. In the war in Afghanistan and Iraq we have done fewer than 600 amputations totally. We are doing 6000 a year just because of diabetes. And we are making some progress on that I have changed it all, the way we dispense food in our own agencies, we had Bernard Kings and 34 of them and I have moved those out. But let me mention and sort of wrap up with this the effects of this current war on the VA. And that the two signature injuries that seem to be coming out of this war are are brain injury from blast and Post Traumatic Stress Disorder. Now brain injury is not new. In fact I was reading an article in Wall Street Journal this morning that there are nine million Americans that have their brain damaged as a result of a traumatic brain injury or a stroke or a hemorrhage of the brain. But perspective on that that we have one of four major Polytrauma Centers located right here at Palo Alto VA Hospital and the other three at Minneapolis, Tampa, Richmond Virginia. In total they have seeing 368 people in the with traumatic brain injury, they are from the war. So well, each one of these is serious and sad in some of them and the scale it's not big. And the the work that is being done over there on in the combat environment and evacuating these people who are injurious is absolutely heroic. As it is to the chain, Germany back to Taconus and then eventually we get them and we now and I am doing this voluntarily although there is tremendous congressional interest in this. We are screening every one of these people who have been in combat there for any kind of brain injury. And we are screening them for any effects or showings of this Post Traumatic Stress Disorder which have different names in different wars, combat fatigue and so forth. And we are now wrapped up in the vortex of politics of this war and it is one of the biggest challenges that faces me in the organization is that I did a radio interview this morning, as a matter of fact with the CBS radio affiliated here. And their lead in, before they asked me the first question was that, well we realize that the VA is overwhelmed by this war. And the facts are that well as I said, each one of these are serious and we have we have embraced to these signature injuries and brain damages and stress disorders. Something is as big as we are in the scale; it's not having a material impact on us in reality. But the perceptions are [0:33:45] more to read and help this bit is that is that we are overwhelmed and not up to the task. So we have we have more of a perceptual challenge right now than we do in reality. And we are being funded very adequately. The Congress and the President have been extremely supportive of us and the veterans and this is a war that you know, it's a controversial of war. But the warriors are not controversial, just the opposite. You know distinguishable from my day, when I came back from Vietnam the army send me at a Graduate School of Columbia, New York and I wore civilian cloths. But if I had worn my uniform they would have spit on me that campus. Today, well we applaud a veteran from these wars, even at a place like Columbia. I don't know about Stanford but so what that means and the effect that has on you know it attenuates the expectations of an organization like us at the VA. And we are you know, we are there, we are ramped up and I think with really extraordinary in quality, in compassion, in compliments the people there really do care about veterans. And yesterday the Governor and I pinned on four purple hearts of four young guys over here at the hospital and the whole hospital stood down. And I don't know how many 100s of people came over there for that medal ceremony and to see the feeling they had in their faces for these people that are taken care of. So you can be proud of this organization and have and I would welcome any interest that you have anybody here wants to really dig into this, there are lots of interesting I think political and economic issues that could should be explored. Particularly you know, looking out is is the benefit program continues to expand and you put you put a youngster on a benefit with compensation plan for these deemed 100 percent disabled, unemployable, you just you just ordained him to be in that state for the rest of his life. And I think things like that should be should be looked at carefully by objective academic people I think. And so I welcome any enquiry that you have, any kind of constructive suggestions or input that you all might have. It's such a prestigious organization with great people. I would welcome your interest, so - and would welcome your question now.