[Budget of the United States Government]
[VI. Investing in the Common Good: Program Performance in Federal Functions]
[23. Health]
[From the U.S. Government Publishing Office, www.gpo.gov]


 
                               23.  HEALTH

  ----------------------------------------------------------------------

                               Table 23-1.  FEDERAL RESOURCES IN SUPPORT OF HEALTH
                                            (In millions of dollars)
----------------------------------------------------------------------------------------------------------------
                                                                               Estimate
               Function 550                   1998   -----------------------------------------------------------
                                             Actual     1999      2000      2001      2002      2003      2004
----------------------------------------------------------------------------------------------------------------
Spending:
  Discretionary Budget Authority..........    26,386    30,070    30,611    30,971    30,846    30,836    30,836
  Mandatory Outlays:
    Existing law..........................   106,588   115,481   122,769   131,625   141,724   152,964   165,038
    Proposed legislation..................  ........         8       -52       693       828       890       683
Credit Activity:
  Direct loan disbursements...............  ........  ........  ........       N/A       N/A       N/A       N/A
  Guaranteed loans........................        94        73        48       N/A       N/A       N/A       N/A
Tax Expenditures:
  Existing law............................    80,545    85,810    91,795    97,885   104,410   111,640   119,660
  Proposed legislation....................  ........  ........        59     1,235     1,281     1,423     1,577
----------------------------------------------------------------------------------------------------------------
N/A = Not available

  ----------------------------------------------------------------------
  In 2000, the Federal Government will spend about $152 billion and 
allocate about $92 billion in tax incentives to provide direct health 
care services, promote disease prevention, further consumer and 
occupational safety, conduct and support research, and help train the 
Nation's health care work force. Together, these Federal activities will 
contribute to considerable progress in extending life expectancy, 
cutting the infant mortality rate to historic lows, preventing and 
eliminating infectious diseases, improving treatment and quality of 
care, and improving the quality of life for individuals suffering from 
chronic diseases and disability. Estimated life expectancy reached a 
record-high of 76.5 years for those born in 1997, and infant mortality 
has reached a record low of 7.1 infant deaths per 1,000 live births, an 
eight-percent reduction from the previous year. Age-adjusted death rates 
associated with HIV/AIDS fell 47 percent from 1996 to 1997, and the 1997 
rate of 5.9 deaths per 100,000 is the lowest since mortality data have 
been available.
  The Department of Health and Human Services (HHS), the Federal 
Government's lead agency for health, aims: ``to enhance the health and 
well-being of Americans by providing for effective health and human 
services and by fostering strong, sustained advances in the sciences 
underlying medicine, public health, and social services.'' This mission 
is supported by the following strategic goals: (1) Reduce the major 
threats to health and productivity of all Americans; (2) Improve the 
economic and social well-being of individuals, families, and communities 
in the United States; (3) Improve access to health services and ensure 
the integrity of the Nation's health entitlement and safety net 
programs; (4) Improve the quality of health care and human services; (5) 
Improve public health systems; and (6) Strengthen the Nation's health 
sciences research enterprise and enhance its productivity.

Health Care Services and Financing

  Of the estimated $152 billion in Federal health care outlays in 2000, 
88 percent finances or supports direct health care services to 
individuals.

  Medicaid: This Federal-State health care program served about 33 
million low-income Americans in 1998, the latest year for which 
statistics are currently available The Federal

[[Page 238]]

Government spent $101 billion, 57 percent of the total, on the program 
in 1998 while States spent $76 billion, or 43 percent. States that 
participate in Medicaid must cover several categories of eligible 
people, including certain low-income elderly, women, and children, and 
people with disabilities, as well as several mandated services, 
including hospital care, nursing home care, and physician services. 
States also may cover optional populations and services. Under current 
law, Federal experts expect total Medicaid spending to grow an average 
of 7.7 percent a year from 2000 to 2004.
  Medicaid covers a fourth of the Nation's children and is the largest 
single purchaser of maternity care as well as of nursing home services 
and other long-term care services; the program covers almost two-thirds 
of nursing home residents. The elderly and disabled made up less than a 
third of Medicaid beneficiaries in 1997, but accounted for almost two-
thirds of spending on benefits. Other adults and children made up over 
two-thirds of recipients, but accounted for less than a third of 
spending on benefits. Medicaid serves at least half of all adults living 
with AIDS (and up to 90 percent of children with AIDS), and is the 
largest single payer of direct medical services to adults living with 
AIDS. Medicaid pays for over one-third of the nation's long-term care 
services. Medicaid spends more on institutional care today than it does 
for home care, but the mix of payment will be almost equal in 10 years.
  Enrollment in Medicaid managed care arrangements rose from 7.8 million 
in 1994 to approximately 15 million in 1997. In 1998, the Federal 
Government proposed regulations to improve the quality of care and 
patient protections for Medicaid beneficiaries enrolled in managed care 
plans.
  Because the Health Care Financing Administration (HCFA) and States 
jointly administer Medicaid, HCFA must consult with State Medicaid 
agencies to develop and test national performance goals for Medicaid. 
Understanding that Federal and State Medicaid funding must result in 
improved health conditions and quality of care for children and low-
income families, the State agencies are working with HCFA to define 
performance goals and measures that are measurable. The States and HCFA 
have agreed to increase immunization rates among needy children, to 
increase the number of children enrolled in the Children's Health 
Insurance program and Medicaid, and to increase enrollment of dually-
eligible Medicare beneficiaries, for example. State cooperation with the 
Federal GPRA program will produce quantifiable national goals and 
measures during 1999, for 2000 and beyond.

  Children's Health Insurance Program: More than 11 million American 
children lack health insurance. To increase the number of children with 
insurance, the Children's Health Insurance Program (CHIP) was 
established in 1997 to provide $24 billion over five years for States to 
expand health insurance coverage to low-income, uninsured children. CHIP 
provides States with broad flexibility in program design while 
protecting beneficiaries through basic Federal standards. In the 
program's first year, States have expanded Medicaid, created separate 
State programs, and developed programs that combine the two.
  A State receives CHIP funding after HCFA approves its child health 
plan. Nearly every State submitted and received approval of its State 
CHIP plan in 1998. These plans describe the strategic objectives, 
performance goals, and performance measures used to assess the 
effectiveness of the plan. In addition, HCFA is working with the States 
to develop baselines and targets for the CHIP/Medicaid goal as well as 
to develop additional goals for CHIP:
  Decrease the number of uninsured children by working with 
          States to implement CHIP and by enrolling children in 
          Medicaid. In 1999, HCFA will work with the States to establish 
          performance measurement baselines and performance targets.

  Other Health Care Services: HHS supplements Medicare and Medicaid with 
a number of ``gap-filling'' grant activities to support health services 
for low-income or specific populations, including Consolidated Health 
Center grants, Ryan White AIDS treatment grants, the Maternal and Child 
Health block grant, Family Planning grants, and the Substance Abuse 
block grant. In addition, the Indian Health Service (IHS) delivers 
direct care to

[[Page 239]]

about 1.4 million American Indians and Alaska Natives. In 2000, the 
following agencies will work to meet the following goals:
  IHS: Increase the proportion of women who have annual pap 
          screening to 55 percent, from the 1997 baseline of 43 percent.
  Substance Abuse and Mental Health Services Administration 
          (SAMHSA): Reverse the upward trend and cut monthly marijuana 
          use among 12 to 17-year-olds by 25 percent, from the 1995 
          baseline of 8.2 percent to 6.2 percent by the end of 2002.
  Health Resources and Services Administration (HRSA): Increase 
          the number of AIDS Drug Assistance Program (ADAP) clients 
          receiving appropriate anti-retroviral therapy (consistent with 
          clinical guidelines) through State ADAPs during at least one 
          month of the year, to a projected monthly average of 82,200 by 
          the year 2000. This would constitute a 49 percent increase 
          over the 1998 baseline of 55,000.
  HRSA: Increase the number of women served by family planning 
          clinics by at least two million over the 1995 baseline of 4.5 
          million women served.
  Agency for Health Care Policy and Research: Release and 
          disseminate Medical Expenditure Panel Survey (MEPS) data and 
          associated products to the public within nine to 12 months of 
          data collection.
  Consumer Product Safety Commission (CPSC): CPSC, an 
          independent agency, will reduce product-related head injuries 
          to children by 10 percent in 2000, from a 1997 level of 
          650,000.

  Public Health Initiative for the Uninsured: HHS has established a new 
initiative to increase the capacity and effectiveness of the Nation's 
health care safety-net in ways that increase the number of uninsured 
people receiving needed health care and improve the quality of care that 
is received.
  HHS has set the following performance goals for the year 2000 and 
beyond:
  Increase the number of new integrated health services networks 
          that are providing care using report card information to 
          integrate and improve health services for the uninsured.
  Increase the number of uninsured people receiving primary 
          care, mental health, substance abuse, and other health 
          services and expand the number of services supported.
  Reduce, where appropriate, hospital admissions for ambulatory 
          care-sensitive conditions for uninsured people living in 
          project service areas.

  Strengthening Graduate Medical Education at the Nation's Children's 
Hospitals: The budget includes a significant new investment in training 
pediatric care-givers at the Nation's free-standing children's 
hospitals. In 2000, this program has the following two goals:
  Increase the number of pediatric care-givers receiving 
          training; and Increase the number of children with acute 
          illnesses receiving appropriate care in their communities.

  Prevention Services: Measures to protect public health range from 
providing sanitation to prevent bacteria from developing resistance to 
antibiotics. State and local health departments traditionally lead such 
efforts, but the Federal Government--through HHS' Centers for Disease 
Control and Prevention (CDC)--also provides financial and technical 
support.
   Working with HCFA, CDC will continue to help States ensure 
          that at least 90 percent of all U.S. children by age two 
          receive each recommended basic childhood vaccine.
   With FDA and SAMHSA, CDC will work to reduce the number of 
          children in grades nine through twelve who smoke from 36.4 
          percent to 21 percent by 2010 by conducting education 
          campaigns, providing funding and technical assistance to state 
          programs, and working with nongovernmental entities.
   CDC will increase purchase of vaccines in support of the 
          World Health Organization's goal to eliminate polio globally 
          by December 31, 2000.

[[Page 240]]

  Public Health Electronic Surveillance: Increase the number of State 
and local health departments that have integrated their electronic 
surveillance systems for infectious disease, food safety, and 
bioterrorism, and have electronic linkages to the medical community.
  Bioterrorism: While research and product regulation are primarily 
Federal roles, enhancing surveillance, epidemiologic capabilities, and 
laboratory capacities, and medical response systems, are activities 
where the Federal government can work in partnerships with states, 
providing leadership and funding early in this multi-year effort. States 
should be expected to assume more responsibility for their share of 
partnership expenses over time.
   Implement the plan developed in 1999 to ensure ready 
          availability of a national pharmaceutical stockpile to respond 
          to terrorist use of potential biological or chemical agents, 
          including the ability to protect four million civilians from 
          an anthrax attack.
   Develop blood and urine analytical chemistry methods that 
          will rapidly measure 50 chemicals likely to be used in 
          chemical terrorism.
   Create a network of twelve state or major city laboratories 
          to provide rapid and accurate diagnostic and/or reference 
          support for 10-15 select biologic agents.
  Biomedical Research: The National Institutes of Health (NIH) supports 
and conducts research to gain knowledge to help prevent, detect, 
diagnose, and treat disease and disability. NIH conducts research in its 
own laboratories and clinical facilities; supports research by non-
Federal scientists in universities, medical schools, and hospitals 
across the Nation, and helps train research investigators. NIH supports 
over 50,000 grants to universities, medical schools, and other research 
and research training institutions while conducting over 1,200 projects 
in its own laboratories and clinical facilities. Examples of recent 
research advances include new discoveries of genes associated with 
diseases, including a form of Parkinson's disease that occurs early in 
life; discovery that a drug used to treat breast cancer can also reduce 
breast cancer in high-risk women; and the use of high-energy X-rays to 
visualize how HIV begins to attack the body's immune system. NIH 
performance goals for the next century of research, include:
   increasing the rate of sequencing to 190 million base pairs a 
          year in 2000 in order to complete the human genome sequencing 
          project by 2003; and
   promoting private sector participation and investment in 
          applications of novel research discoveries by increasing the 
          number of executed cooperative development agreements by five 
          percent over the 1998 level.
  Additionally, NIH is leading the national effort to meet the 
President's goal of developing an AIDS vaccine by 2007.
  Public Health Regulation and Safety Inspection: The Food and Drug 
Administration (FDA) spends $1 billion a year to promote public health 
by helping to ensure that foods are safe, wholesome, and sanitary; human 
and veterinary drugs, biological products, and medical devices are safe 
and effective; and cosmetics and electronic products that emit radiation 
are safe. It leads Federal efforts to ensure the timely review of 
products and ensure that regulations enhance public health, and not 
serve as an unnecessary regulatory burden. In addition, the FDA supports 
research, consumer education, and the development of both voluntary and 
regulatory measures to ensure the safety and efficacy of drugs, medical 
devices, and foods.
  To speed the review process, FDA has set the following performance 
goals for 2000:
   review and process 90 percent of complete new drug 
          applications within a year of submission;
   review and process 85 percent of new medical device 
          applications (know as pre-market applications) within 180 
          days, compared to 79 percent in 1997. To give the public 
          useful health information, FDA has set the following 
          performance goal:
   Ensure that, by the year 2000, 75 percent of consumers 
          receiving new drug prescriptions will get more useful and 
          readable information about their product.

[[Page 241]]

  The Food Safety and Inspection Service (FSIS) in the U.S. Department 
of Agriculture uses $600 million annually to inspect the Nation's meat, 
poultry, and egg products, ensuring that they are safe, wholesome, and 
not adulterated. In 1996, FSIS began implementing a modernized 
inspection system, Hazard Analysis and Crisis Control Point (HACCP) 
system, that will begin shifting responsibility for ensuring meat and 
poultry safety from FSIS to the industry. Together with FSIS, HHS has 
the following food safety goals:
   By 2000, 99 percent of Federally-inspected meat and poultry 
          plants will comply with the HACCP.
   80 percent of the domestic seafood industry will be operating 
          preventive controls for safety as evidenced by functioning 
          HACCP systems.
   Increase the frequency of inspection of high-risk domestic 
          food establishments to once every year, from once every three 
          to four years.
   More than double the number of inspections conducted of 
          foreign food processors from 100 to 250.
   Establish and enhance eight active FoodNet food-borne 
          surveillance sites. Expand state health department capacity to 
          subtype and rapidly exchange information using PulseNet for 
          E.coli (currently 29 labs) and Typhimurium Salmonella 
          (currently 15 labs) to 40 labs for each.
   Increase the number of outbreaks of diarrheal and/or food 
          borne illness that will be detected and investigated to 24.

Workplace Safety and Health

  The Federal Government spends $620 million a year to promote safe and 
healthy workplaces for over 100 million workers in six million 
workplaces, mainly through the Labor Department's Occupational Safety 
and Health Administration (OSHA) and Mine Safety and Health 
Administration (MSHA). Regulations that help businesses create and 
maintain safe and healthy workplaces have significantly cut illness, 
injury, and death from exposure to hazardous substances and dangerous 
employment. In 1997, workplace injuries and illnesses fell to the lowest 
rate on record.
   To improve workplace safety and health for all workers, by 
          September 30, 2000, OSHA will: (1) reduce injury/illness rates 
          20 percent in at least 50,000 of the most hazardous 
          workplaces; and (2) initiate investigation of 95 percent 
          worker complaints within one working day or conduct an on-site 
          inspection within five working days.
  MSHA will, in 2000, reduce fatalities and lost workdays in all 
          mines to below the average number recorded for the previous 
          five years. From 1993-1997, there was an average of 95.8 
          fatalities and 4.29 lost workdays.

Federal Employees Health Benefit Program (FEHBP)

  Established in 1960, the FEHBP is America's largest employer-sponsored 
health benefit program, providing $17 billion in health care benefits a 
year to about nine million Federal workers, annuitants, and their 
dependents. About 85 percent of all Federal employees participate in the 
FEHBP, and they select from nearly 300 health care plans. The Office of 
Personnel Management administers the FEHBP. By the year 2000, the FEHBP 
will be fully compliant with the President's Patients' Bill of Rights. 
The Patients' Bill of Rights is an Administration initiative to provide 
health care consumers with rights of information disclosure, choice of 
providers and plans, access to emergency services, participation in 
treatment decisions, respect and nondiscrimination, confidentiality of 
health information, and rights of complaint and appeal.

Tax Expenditures

  Federal tax laws help finance health insurance and care. Most notably, 
employer contributions for health insurance premiums are excluded from 
employees' taxable income. In addition, self-employed people may deduct 
a part (60 percent in 1999, rising to 100 percent in 2003 and beyond) of 
what they pay for health insurance for themselves and their families. 
Total health-related tax expend

[[Page 242]]

itures, including other provisions, will reach an estimated $91.8 
billion in 2000, and $525 billion from 2000 to 2004. The exclusion for 
employer-provided insurance and related benefits (including deductions 
by the self employed) accounts for most of these costs ($79 billion in 
2000 and $455 billion from 2000 to 2004).