Briefing Via Conference Call by Karl Zinsmeister, Assistant to the President for Domestic Policy, on Wounded Warriors Reform

5:05 P.M. EDT

MS. LAWRIMORE: Hi, this is Emily Lawrimore, Assistant Press Secretary at the White House. President Bush just outlined the administration's efforts to implement recommendations proposed by the President's Commission on Care for America's Returning Wounded Warriors. He also announced that he is sending Congress legislation to implement the recommendations that require legislative action. Karl Zinsmeister is Assistant to the President for Domestic Policy, and he's going to take any questions you have about this issue. This will be on the record, and we'll provide a transcript afterwards.

MR. ZINSMEISTER: I know some of you heard what just transpired in the Rose Garden, but I know some of you also were not there. So those of you who heard it, forgive me for a little bit of repetition here, but I want to make sure everyone starts out on the same footing.

The President just announced that he is going to be sending legislation to Capitol Hill today that would allow the recommendations of the Dole-Shalala commission to be implemented in the area of military disability. I think some of you will recall that the Shalala-Dole commission had six major recommendations. Five of the six are well on their way, are mostly things we can do ourselves, administratively. And I'm happy to return to those, if there are questions or interest in that.

But the bigger kind of trickier effort is the sixth recommendation, to remake the current military disability system. Let me just give you a little perspective on that. This is about a $30 billion per year program at present, affecting about 3 million recipients. So it's a big, important apparatus that affects a lot of human beings.

In addition, of course, we have men and women currently entering the system from the battlefields in Iraq and Afghanistan. The President feels very strongly that this is part of his work as Commander-in-Chief, to make sure that those men and women are handled well and given the best possible treatment; that that's part of the successful prosecution of this war. And that has been his charge to the commission and to those of us working to implement the commission's recommendations.

So a lot of what I want to talk to you about today is concentrating on the disability system. Again, just a little perspective. The current system that exists at present is very complicated. You basically have two parallel systems. The Defense Department and the VA Department run -- each run a disability system. They operate more or less in parallel, and injured service members have to enter both and they literally have to do two separate exhaustive doctors examinations. They have to have two entirely separate sets of paper and qualifying procedures. If they have a problem, they have to have appeals in two separate systems. So it's, to say the least, not consumer-friendly. It is not fair across all groups and across all regions and to all classes of service members. It is not consistent, it's not transparent, and we think we can do better.

The recommendation of the Dole-Shalala commission was, "a complete restructuring of the disability system." And more or less the same recommendation has been made by -- I think we counted four other recent or current commissions. So there is a large body of expert opinion here that today's disability system -- most of which, by the way, was set up literally around World War II, and has not dramatically changed since then -- needs to be brought into the modern era.

What is the modern era? Well, I think we all know that the medical possibilities are just dramatically different, even in the last five or 10 years. Now, just to give you sort of a human example -- I was out on a bike trail just a couple weeks ago, a mountain bike trail, and had a guy go whizzing by me. I was fairly shocked when I look up to see this guy in an Army shirt with one leg, mountain biking -- we were in the middle of nowhere -- this guy had gone a long ways.

I know you've all seen the photos on the front page of the newspapers, amputees rappeling down walls and guys skiing -- there is, as I say, a kind of a happy confluence of improved medical technology, of changed attitudes, cultural attitudes to what a "disabled" person is capable of and ought to be allowed and encouraged to do, as well as perhaps kind of a generational -- kind of a friskiness among a lot of these current men and women that are really very inspiring. And we feel like the disability regimen, the system for rehabilitating and compensating these folks needs to also adapt to those new realities. So that's kind of the background.

So what are doing? To kind of put it into a nutshell, and then I'll take your questions about the specifics you're interested in, the first thing that the commission recommended and that we have picked up and heartily endorsed is the idea that it doesn't make sense for both the Defense Department and the Veterans Affairs Department to run separate, parallel disability systems. We really need to unsnarl that tangle and let each system specialize in what it's good at.

The Defense Department is good at fighting wars and marshaling manpower, and the commission's recommendation that we're executing today is that, in the future, the DOD ought to simply be charged with making a determination: Can this individual continue in military service? Is he or she fit to continue serving? And if the answer is yes, they will get whatever rehab they need to reenter their service. If the answer is no, they will get a lifelong annuity, which will reflect their years of service and their rank and which they take to their grave. And then they will transition immediately to the VA system.

And the VA system is the side that will be charged with offering real, dedicated, close-quarters, hand-holding care. And we feel that's a much better match, that they have a system that's already set up to be focused on care, and that that's the appropriate sort of repository for this responsibility.

And from the consumer's point of view, the benefits of this are that you have one doctor's exam instead of two; you have one set of paperwork; you have one set of appeals. Almost overnight, you've sort of cut the bureaucratic nightmare aspect of this in half.

In addition, we've tried to make the system itself inherently clearer and simpler and cleaner in ways that we believe are going to lead to fewer of these people slipping between the cracks. For instance, one of the things we learned, I think, at Walter Reed is that there's a gap sometimes, for these service members between when they leave the military system and yet haven't quite entered the VA system. And sometimes they literally didn't have salaries for a month or two or three months, didn't have rehab plans, were falling between the cracks.

The commission recommended, and we have incorporated in our legislation, a brand-new series of what we're calling transition benefits, which would be partly an extension of their base pay, and partly a series of new rehabilitation and educational benefits. So that's one of the -- sort of the innovation that's going to be available in the new system.

The other thing I want to sort of make clear is that the commission was very careful to be kind of realistic and practical, and we've tried to act in that spirit. And one of the decisions we've made early on was that 3 million people currently in the medical disability system have settled expectations; they have lives that they've learned to lead and you can't just pull right out from under them, you can't upset that apple cart. So the existing system is going to be grandfathered in. Anybody who currently has a rehab or disability payment plan is going to continue on that existing plan. There will be no changes. People who read about this tomorrow morning, who worry that they're going to have to start over can relax.

The new system that we're setting up will apply specifically to new veterans. And in the beginning, obviously, it will be small. I mean, it's just the people that are entering it now as disabled service members. But it will grow over time, and the old system will shrink, and eventually the new system will be the system, the only system. But I think it's important to have people understand that, again, we're making it -- taking pains to make sure that people who are already sort of on a path are not going to be expected to start over again.

There's lots more detail, but maybe I'll just shut up at this point and take questions, if that would be helpful.

Q: Thanks, Karl for doing the conference call. I appreciate that. The report, the Dole-Shalala report identifies specifically six different things that are said would be -- would require congressional approval. Is the President sending then legislation on all those six things, as outlined by the commission? And when Secretary Shalala says that you're doing 90 percent of what the commission recommended, what's the 10 percent that's not being done?

MR. ZINSMEISTER: Well, it might be 90 percent of the action items, but it's not 90 percent of the hard work, Peter. The disability reform is a big, complicated piece of work, and that is the piece that really requires legislation. This is something we need Congress's kind of partnership with. This is something we don't want to do alone and can't do alone.

So that's the piece that is mostly being sent up today. The legislation we're sending up is fairly lean; I want to say it's 50 or 60 pages. And let me make the point here, too, that it's sort of a process as much as an endpoint. Again, remaking what I think is literally a 600-page regulation that describes what the compensation shall be for x, y or z injury is not something you can just snap your fingers on. You have to involve the stakeholder groups, you have to have lots of expert opinion. And at some point, Congress has to make some judgments that "losing a leg compares to losing an eye as follows." And those are obviously, in some cases, subjective. So in all those areas, what we're really starting is a process rather than sort of dictating a solution. And there will be lots of opportunities for Congress and veterans groups and other stakeholders to be involved in this.

But to get back to your question of what is in the legislation other than disability. Another piece that has to be done legislatively is a new system of protecting -- protected leave for family members. The Dole-Shalala folks suggested we basically do this through the existing Family and Medical Leave Act apparatus. We found that that was actually going to be bureaucratically troublesome, so have established instead sort of a new program which would create these six-month protected leaves for family members.

One of the nice fringe benefits of that, by the way, is that it's possible that people could qualify under both systems. So someone might take six months of protected leave under the new system and still have eligibility under the FMLA system. But that's a big, complicated task, but one we think is quite doable and in which there's a pretty strong consensus. It will, however, require legislation.

Other pieces -- I believe the tri-care changes are going to require legislation. One of the other things that the President has been very concerned about from the beginning is the notion that family members can just wear themselves out to a nub caring for a wounded service member. And we need to get more benefits available to the family members, as well as the person who is actually injured. And the tri-care system has kind of a branch that essentially offers respite care or -- I forget the other terms of art -- basically, the goal is to make it possible for you to get an aide in your home, or someone else involved who will be able to spell the family member from being the nurse and coordinator of plans and chaser-down of bureaucratic details.

In that area, of course, the biggest change is one that does not require legislation, which are the care coordinators. The details are being figured out right now. We don't know exactly how many of the care coordinators are going to be needed, but the idea is that we have to have a dedicated cadre of folks who this is their entire job. They are enough a part of the system that they're not alien, that they're going to have some clout and some pull within the VA, but they are independent enough that they can blow the whistle is they see substandard care or bureaucratic backups that they don't like.

So that's been kind of the effort in establishing this recovery cadre. The training of these folks has just begun. The forms that they will use, which are going to be kind of their currency in trade -- this is how they're going to make sure people don't get lost -- is to track them carefully. The information technology system that's needed to kind of help make sure that nobody gets lost are all being geared up right now.

But it's -- and one of the families we met with today, the Wade family, he was a service member, had a very serious TBI injury, as well as an amputation. And the wife really just had to do heroic work for a year and a half, I think; tremendous, exhaustive -- commuting from her job and otherwise wending through the system on her husband's behalf. That really is not something that we should expect a family member to do. And that's what these recovery care coordinators are going to be expected to do on a professional basis on the government's nickel in the future.

Q: Just to be clear, then, the other things you mentioned that require legislation, like tri-care and the leave act, are those part of that 50-60-page bill, are they separate bills, are they going up today?

MR. ZINSMEISTER: They're all in one big package. Most of the verbiage is the disability chunk, but they're all together, Peter.

Q: Okay. And all today?

MR. ZINSMEISTER: Yes, yes.

Q: Okay, thanks.

Q: I was there in the Rose Garden today. VFW and other veterans organizations are adamantly against the creation of two disability pay scales for the same disability. The Dole-Shalala recommendation was not discussed today. What's the status?

MR. ZINSMEISTER: I'm not quite sure what you're talking about, but let me try to see if I can figure it out with you. Going back to the point I made earlier, we realize that if we design a new system, Joe, and then said that Vietnam-era and Korea-era veterans who are living with a package and a set of expectations right now are going to have to transition over, I suggest we would have had a revolt and would have deserved it.

When you have a sort of settled expectation in a big program like this, it's very unwise to sort of overturn it. So we -- our judgment was that the sort of humane and practical and sensible course was to, yes, improve the system, get away from this outdated World War II model, but not change individual actors who are already enmeshed in it. Instead, gradually apply the system to everybody who comes on in the future. And again, I believe that that's actually the most veteran-friendly solution available to us.

Now, as you say, inevitably, that means that there will be two different ways of handling people. The people who are on the current system will not have exactly the same outcomes as people on the new system, and frankly, we hope the people on the new system will have better outcomes. I mean, that's the reason we're doing this. I want to just say up front, we do not think that the current system is as good as it should be and ought to be. And we're trying to make it better.

Q: Karl, our confusion obviously comes from the original report itself. But the way it reads to us, it basically is if you have an injury, sustain an injury in a war zone or in training to go to war, and you retain -- you get that same injury outside of that training aspect or in a war aspect, you're going to be compensated differently.

MR. ZINSMEISTER: Let me -- that's an easier one. This of kind of entering the realm of urban legend. The bill is obviously publicly available and I really urge you to read it, Joe. There is absolutely no two-track treatment of disability or two-track treatment of medical care based on how you were injured. We don't care whether you were leading a bayonet charge or stumble on an ammunition box in your tent. If you are disabled in the service, in the line of duty, you will get the exact same medical care and the exact same disability treatment. The commission recommended that there be a combat-related distinction that we did not think was tenable, that -- partly for the reasons you described. You just can't have two different ways of treating people. So we do not have two different ways.

There are I think three places where we felt that we could try to honor the spirit of this recommendation by the commission that there is something special about somebody who is serving in a combat environment, and they start with the recovery care coordinators. The recovery care coordinators are really viewed as a kind of one-on-one, very intensive, very special management, and they are available primarily to people who got combat-related injuries, and also by waiver by one of the secretaries could be made available to anyone else as well. But they are primarily focused on serious combat-related injuries. But the basic system, Joe, is not going to be two-track, it is going to apply to everyone equally.

Q: Okay, so that -- so the White House did not accept that part of the Dole-Shalala recommendation?

MR ZINSMEISTER: That is correct.

Q: Okay, thank you.

Q: I want to ask about this GAO report that came out last month that suggested that there was still a lot of problems in the things that could be done administratively, forgetting the legislation that needs to be sent up to the Hill; that a lot of the changes are behind schedule, and not moving as fast as they thought it ought to. What's your response to that?

MR. ZINSMEISTER: As you may know, there's a pretty unprecedented level of collaboration taking place right now between the Defense Department and the VA Department. Every Tuesday what's called the SOC -- I forget what it stands for -- strategic operating committee I think -- meets. It's chaired by the deputy secretaries of each agency, and they basically spend the day with huge amounts of staff and effort, going through what needs to be done to make all the administrative changes necessary to improve the system. As I say, this is not something I can think of many examples from the past where there's ever been this level of collaboration.

And to give you one little example, Peter, of where I see this helping break the logjams -- as you may know, administrations in Washington even prior to this one have been saying forever that we need to get better collaboration on information technology between the two branches; that the VA and DOD health IT systems just can't communicate. And this really interferes with quality of care sometimes, and it's absurd. As I say, this has been a recommendation of experts and everybody for years, literally. And we've had a terrible time getting headway on it, getting the agencies to really buckle down and take this seriously.

Well, basically as a result of these SOC meetings and the Dole-Shalala recommendations, we've had a tremendous leap forward in the last six months on health IT, to the point where -- I think the deadline is November -- as of November we're expecting that they will be able to exchange pharmacy records and some -- I believe some diagnostic records, and are on a sketched-out path now that will allow their two health IT systems to talk seamlessly I believe within 12 months.

And I'm really tickled and pleased about this. I feel like that this is exactly the kind of head-cracking that we sort of needed and intended, and it is definitely fruit of this collaborative process. Now, we're not done. We're not done in a lot of areas. But that's a big accomplishment.

Another area is the PTSD and traumatic brain injury. Huge progress has been made there very rapidly. It is, for instance, the standing protocol that anybody going into a VA facility now is screened for PTSD, even if they don't ask for it. You don't have to ask for it. Even if you don't ask for it, you will be screened. Just making it simpler, making it kind of part of the standard expectation, making sure that people who are embarrassed or feel awkward about this are not made to feel that way.

Q: And so -- but this report, the GAO says that, for instance, the pilot program to establish a -- what you talked about, the disability evaluation system, was -- there's a pilot program established, a single-joint system slated to begin August 1st, but that date slipped. It says that there was plans in terms of how many recovery folks would be -- coordinators would be on duty by mid-October, and that hasn't -- that slipped. I mean, do you find that this has been more difficult on things like that than people had hoped or expected?

MR. ZINSMEISTER: Actually, no. I mean, I'm not -- to be honest, I'm not familiar with the report. I don't know what you're reading from right now. But let me just give you some examples, for instance, on the recovery coordinators. That -- the schedule that we're on, that I know, is that we had committed to, by October 1st, there would be a memorandum of understanding between DOD and VA and HHS as to exactly how the recovery coordinator corps would be set up and trained. And that has happened on schedule.

The next deadline was by October 15th, yesterday -- was that there would be a -- basically a plan, more or less kind of a schedule of how each patient's progress will be charted. And again, that has been met. The next deadline will be in a couple weeks, on November 1st, when DOD and VA are expected to have a plan for the kind of computer infrastructure that will support all of this kind of charting.

And that's, so far as I know, very much on schedule and very much accelerated, compared to how these things often proceed. Now, look, these are two giant octopuses. And one of the whole jobs of the SOC is to crack heads and to find out what's lagging and what's not. But I'm really pleased that we have the attention of the deputy secretaries, that they are putting this kind of time and effort into it. Secretary Gates was at a private meeting just before the public event today and mentioned that he's going to make this one of his main points in one of the next projects he undertakes.

We really have the attention of the departments and -- so far as I can tell, and it's kind of my job to be the Inspector General here, so far as I can tell -- are very much on track to make good progress in most of these areas.

Q: Thank you.

MR. ZINSMEISTER: Thank you.

Q: Thanks, Karl. What about cost? I haven't heard anybody indicate what -- how much this will cost and how it compares to what's being spent now.

MR. ZINSMEISTER: Sure. Well, let me first say that -- as I mentioned earlier, this is -- there's kind of a process here. In order to get to the end of the road, you first have to remake what they call the injury schedule. So you sort of figure out what can be expected -- what level of disability should be expected from a amputation below the knee; what level of disability is associated with different types of PTSD. That's, again, very technical medical work that has to be done in studies. That will be done over a six-month period.

And then there will be a translation of those expert medical recommendations into regulations, normal regulation process -- open, public comment and all that. And then the third step is you eventually have to have Congress act one more time in order to say, okay, we've kind of defined and pigeon-holed everybody where they sit on the totem pole of disability; now we have to assign dollar figures to it. And until that's done, it's a little hard to be exact about costs. And again, the prerogative there really ends up being Congress's.

However, let me say that as best we can tell, our expectation is this system is going to cost a little more than the old system. That's, again, based on best guesses. And no one knows for sure, but we know it's going to cost less at the Defense Department, obviously, because they're going out of the disability business. It's going to cost more at VA. There is going to be some cost to the Treasury, in our best cost estimates, associated with the fact that people will be able to concurrently receive their disability benefits and Social Security. And the disability benefits will not be taxed, will not be FICA-taxed. That was the judgment that was made partway through the policy process. And collectively, as I say, it appears that this will make the system somewhat more expensive than the existing system. Not grossly so, but somewhat more so.

But I got to tell you, that really was not part of the calculus until, I think, the -- literally, the first time I saw the cost estimates was yesterday. This whole process was driven by the idea that we have a really inferior, substandard system right. It is not consumer-friendly, it is not fair, it is not accurate. It needs to be fixed, needs to be gotten better. And that was very much our charge from the President. If you happen to be at today's event, both, I think, Dole and Shalala mentioned that that really was not their concern. They were trying to make a better mouse trap, obviously being reasonable, so that where the costs fall were to be problem two down the road. And that really is sort of how the process was driven throughout.

Q: Thank you very much, and thanks for the call today. I'm wondering how many people are entering the system, the disability system every year for the last couple of years. You talked about at the beginning there are 3 million people in the system now, is that right?

MR. ZINSMEISTER: In the current system, Ginger. And these are literally people from World War II to the present. So, yes, there's a big legacy group. And just to repeat myself, those boats are not going to be rocked. They're going to be left alone.

The transition -- obviously at some point you have to have a transition moment. So what we have settled on is the first military action of the war on terror, which the Pentagon told us was October something, I forget -- some date in October 2001. That was when we sort of date the beginning of the war on terror. That was what we selected as our D-day for when the new system dawns.

Now, you will instantly kind of perceive that there are some guys who were hurt after that date who are in the old system, and they got hurt in 2003; something had to happen to them, they came back, they were at rehab. Some of them got checks; some of the started new lives. For that group that qualified after we said the new system had dawned, but who have already got some expectation out of the old system, we're going to give them a choice. They can either stick with their current adjudication, or they can enter the new system if they think it will be a better situation for them.

But for anyone else, anybody who comes on in the future -- obviously the legislation has to be passed and be implemented -- but once it's passed and implemented, anybody who comes into the system will be in the new system. And in the beginning it's small. I mean, thank God the number of people we're talking about is not large. The number of seriously disabled people, seriously injured people, sufficiently injured to actually be judged unfit for service and given a disability qualification is small; it's in the thousands.

Q: Per year? Is that per year?

MR. ZINSMEISTER: You know, I'd want to get you the exact figures, which I'm happy to look up. But yes, it's single-digit thousands per year. But this will grow over time. As I say, this will be the one and only military disability system eventually down the road.

And one other thing. Let me say -- as I say, we judged, I think, rightly, that it would be terribly unfair and disruptive to people to change the rules of the old system and disrupt their momentum. But we also believe and hope that in the process of running the new system, we're going to learn all kinds of neat things, and we're going to learn better ways of doing things that can kind of be fed back into the old system. And that is very much the expectation, that as we learn what works better in the new system, we'll go to Congress and say, look, these same rules, this same judgment, this same set of protocols ought to be applied to the old system. So we expect and hope there will be a nice feedback effect that improves the care for the older service members, as well.

I can take one more question, would be happy to do my best on one more.

Q: Thank you. Karl, one last clarification point here. Is it the administration's intent to try to merge the best of the Dole-Shalala commission with the congressionally chartered commission -- also the Veterans Disability Benefits Commission that was chartered -- basically started over two years ago to do the same subject?

MR. ZINSMEISTER: The skeleton that we adopted, Joe, is the Dole-Shalala skeleton. However, in the legislation that is going up today, when you get a copy of it and read it, you will see that at several points we sort of invite the very best current, contemporary knowledge. And the VDBC, the Veterans Disability Benefits Commission that you mentioned, is specifically cited by name in the legislation as one of the places that the Secretary -- the VA Secretary should draw from when he's making some of these expert technical judgments down the road.

We also stipulate in the legislation that the veterans groups themselves ought to be consulted as sources of expertise and judgment calls. So again, this is really going to have to be a big, collaborative process, and recognize that we're going to try to take some of the best ideas from here and there. The really great thing about the Dole-Shalala recommendations, the real genius thing is that they did not throw in everything but the kitchen sink. It was very focused, it was very doable, it was very practical. The traditional commission comes out with 136 recommendations, and it's all pie in the sky, and it doesn't happen. These folks were much more focused on what is really practical for Congress to bite off and digest. And that is the spirit that we've tried to pick up and operate in.

Q: I appreciate it. Everything will definitely come to a head tomorrow when all the commission heads brief the Senate VA committee.

MR. ZINSMEISTER: Great, thank you.

END 5:37 P.M. EDT