This week, the Obama administration released a proposed budget for Fiscal Year 2011, with and overall total spending of $3.834 trillion. The budget also allocates $50.6 billion in advance appropriations for the Veteran’s Administration (VA) medical care program so that care for the Nation’s veterans is not hindered by budget delays.
Below is a summary of the proposed budget for the Department of Health and Human Services (HHS) and some of its major agencies. In addition, Health and Human Services (HHS) Secretary, Kathleen Sebelius, gave a speech announcing some of the departments goals for the upcoming fiscal year in response to the President’s proposed budget.
The Budget includes $561 million in discretionary resources, an increase of $250 million, to strengthen Medicare and Medicaid program integrity activities, with a particular emphasis on fighting health care fraud in the field, increasing Medicaid audits, and strengthening program oversight while reducing costs.
Such an investment against fraud and abuse claims to help save $9.9 billion over ten years. According to HHS, the additional funding will better equip the Federal government to minimize inappropriate payments, pinpoint potential weaknesses in program integrity oversight, target emerging fraud schemes by provider and type of service, and establish safeguards to correct programmatic vulnerabilities.
Additionally, the HHS budget will install a set of new program integrity proposals that will give HHS the necessary tools to fight fraud by enhancing provider enrollment scrutiny, increasing claims oversight, improving Medicare’s data analysis capabilities, and reducing over-utilization of Medicaid prescription drugs. These proposals will claim to save approximately $14.7 billion over 10 years.
Other healthcare related budget expenditures include:
- $3.6 billion, an increase of $186 million, to CMS to meet current administrative workload demands from recent legislative requirements and continuous beneficiary growth. The money also helps revamp information technology (IT) systems and optimize staffing levels so that CMS can meet the future challenges of the Medicare and Medicaid programs and can be an active purchaser of high quality and efficient care.
- $110 million of CMS’ increase is for a new, comprehensive Health Care Data Improvement Initiative to transform CMS’s data environment from one focused primarily on claims processing to one also focused on state-of-the art data analysis and information sharing.
- $1 billion in funding is budgeted to strengthen and support the country’s health care workforce by increasing the capacity of nursing schools, helping more low-income and minority students become doctors, and ensuring that America’s seniors can get care when they need it. This funding will expand loan repayment programs for physicians, nurses, and dentists who agree to practice in medically underserved areas.
- An increase of $290 million for further expansions of health center services, including the creation of 25 new access points in communities without access to a health center, and will facilitate the integration of behavioral health into the existing health centers’ primary care system.
- $78 million, an increase of $17 million, for the Office of the National Coordinator for Health Information Technology (ONC) to advance the President’s health IT initiative by accelerating health IT adoption and electronic health records (EHRs) utilization as essential tools to modernizing the health care system.
- An additional $261 million, including program support costs, in the Agency for Healthcare Research and Quality (AHRQ) to support new research projects including comparative effectiveness research.
- $20 million for a CDC initiative to reduce the rates of morbidity and disability due to chronic disease in up to ten of the largest U.S. cities.
- $162 million for Health Statistics, an increase of $23 million, to improve CDC’s ability to collect data on the health of the Nation for use by policy-makers and Federal, State, and local leaders. This increase will ensure data availability on key national health indicators by supporting electronic birth and death records in States and enhancing national surveys.
- $222 million, an increase of $16 million, for Autism Spectrum Disorders (ASD).
- The Food and Drug Administration (FDA) will receive $3,237,218,000. Of this $3 billion, $1.4 billion, is for medical product safety. This increase will enable FDA to invest in tools that will enhance the safety of increasingly complex drugs, medical devices, and biological products. Also, $61,860,000 of funds for HHS are derived from medical device user fees.
- $102.5 million in increased funding for a new Caregiver Initiative at Administration of Aging (AoA).
- $32.2 billion for NIH, an increase of $1 billion, to support innovative projects from basic to clinical research. In FY 2011, NIH estimates it will support a total of 37,001 research project grants, including 9,052 new and competing awards. With regards to clinical research, HHS announced that “new partnerships between academia and industry are working to revitalize the drug development pipeline.”
- $25 million for advancing regulatory science at FDA, $15 million of which is for nanotechnology related research. The additional resources will also enable FDA to update review standards and provide regulatory pathways for new technologies, such as biosimilars.
Ultimately, while significant amounts of money are budgeted for HHS and its related agencies to improve health care, the focus on clinical research and innovation for breakthroughs in treatment, drugs, and devices is inadequate.
For instance, on average, it costs approximately $1 billion for one drug to reach the market, and only $32.2 billion for NIH—an increase of $1 billion from last year—is being provided from the budget. Without the support of industry and other organizations to work in collaboration with academic medical centers and the government, advances will be limited. Certainly, it would be in the best interest of patients, doctors and Congress to begin discussing the shortfalls of such a budget for the kind of research and funding that is needed to help care for an increasingly sick and older population, especially if any sort of health care reform is passed.