[Budget of the United States Government]
[III. Creating a Better Government]
[12. Health]
[From the U.S. Government Publishing Office, www.gpo.gov]
12. HEALTH
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Table 12-1. Federal Resources in Support of Health
(In millions of dollars)
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Estimate
Function 550 2000 -----------------------------------------------------------
Actual 2001 2002 2003 2004 2005 2006
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Spending:
Discretionary Budget Authority.......... 33,823 38,858 41,008 45,663 46,882 48,130 49,397
Mandatory Outlays:
Existing law.......................... 124,521 138,710 152,363 168,913 183,636 199,672 216,553
Proposed legislation.................. ........ 2,500 10,675 13,743 14,571 4,265 121
Credit Activity:
Guaranteed loans........................ 5 32 21 21 22 22 23
Tax Expenditures:
Existing law............................ 91,080 99,750 108,620 117,750 127,500 136,810 147,080
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In 2002, the Federal Government will spend about $193 billion under
existing law and allocate nearly $109 billion in tax incentives to
provide direct health care services, promote disease prevention, further
consumer and occupational safety, and conduct and support research.
These Federal activities aim to improve the health of Americans as
evidenced by key health statistics such as life expectancy and infant
mortality. In addition, in 2002 Federal health programs will continue
efforts to research and understand the causes of diseases such as cancer
and diabetes, as well as to reduce the incidence of HIV and other
infectious diseases. The Department of Health and Human Services (HHS),
as the Federal Government's lead agency for health, will undertake a
thorough examination across the entire Department to become more
efficient and ensure a streamlined, rationalized budget and program
structure.
Health Care Services and Financing
Of the estimated $193 billion in Federal health care spending in 2002,
84 percent finances or supports direct health care services to
individuals.
Immediate Helping Hand (IHH): The Immediate Helping Hand initiative
provides critical assistance to our Nation's most vulnerable senior
citizens for the cost of their prescription drugs. It provides $46.0
billion for 2001-2005 to States to help low-income Medicare
beneficiaries pay for their prescriptions. This proposal builds on
coverage that is already in place in more than half the States and would
provide benefits to 9.5 million vulnerable Medicare beneficiaries who
currently do not have any other prescription drug coverage. The plan is
unique because needy seniors will be able to get help with their
prescription drug costs this year.
IHH covers the full cost of drug coverage for individual Medicare
beneficiaries with incomes up to $11,600 who are not eligible for
Medicaid or a comprehensive private retiree benefit, and for married
couples with incomes up to $15,700 (135 percent of poverty) who do not
have access to coverage. These beneficiaries would receive comprehensive
drug insurance for no premium with nominal charges for prescriptions.
IHH covers part of the drug costs for individual Medicare
beneficiaries with incomes up to $15,000 and married couples with
incomes up to $20,300 (175 percent of poverty). These beneficiaries
would receive subsidies for at least 50 percent of the premium for drug
coverage.
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IHH also provides catastrophic drug coverage for all Medicare
beneficiaries, giving them financial security against the risk of very
high out-of-pocket prescription expenditures.
Medicaid: This Federal-State health care program served about 33.4
million low-income Americans in 2000. States that participate in
Medicaid must cover several categories of eligible people as well as
several mandated services. The Federal Government spent $117.9 billion,
57 percent of the total, on the program in 2000 while States spent $89.1
billion, or 43 percent. 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 a third of Medicaid enrollees in 2000, but
accounted for approximately two-thirds 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 and community-
based care, but the mix of payments is expected to be almost equal in 10
years.
Current restrictions and requirements in the Medicaid program may be
inhibiting the States' ability to operate the program efficiently. In
addition to taking steps to further address the Medicaid upper payment
limit loophole, the Administration plans to consult with the States on
the development of ideas to increase State flexibility, control Medicaid
costs, improve Medicaid coverage, and ensure the fiscally prudent
management of the Medicaid program.
A major Administration priority is to improve the quality of Medicaid
coverage. Because the Health Care Financing Administration (HCFA) and
States jointly administer Medicaid, HCFA has worked with State Medicaid
agencies to develop national performance goals for Medicaid. These
efforts will continue in 2002. With respect to the goal of increasing
immunization rates among Medicaid children, HCFA will continue to
collaborate with States to develop individualized State immunization
goals, with each State developing its own methodology, baseline, and
three-year target. In 2002, the first and second groups of States will
report their progress towards their State goals, and the final group of
States will establish their baselines and targets. HCFA's goal
complements the Centers for Disease Control and Prevention's (CDC's)
broader 2002 goal of helping States ensure that at least 90 percent of
all U.S. children by age two receive each recommended basic childhood
vaccine.
State Children's Health Insurance Program: The State Children's Health
Insurance Program (S-CHIP) was established in 1997 in the Balanced
Budget Act to provide $24 billion over five years for States to expand
health insurance coverage to low-income, uninsured children. S-CHIP
provides States with broad flexibility in program design while
protecting beneficiaries through basic Federal standards.
Each State's S-CHIP plan describes the strategic objectives,
performance goals, and performance measures used to assess the
effectiveness of the plan. HCFA has been working with the States to
develop baselines and targets for the S-CHIP/Medicaid goal of decreasing
the number of uninsured children by enrolling children in S-CHIP and
Medicaid. In 2000, 3.3 million children were enrolled in S-CHIP, a 70-
percent increase over 1999 levels. However, more than twice as many
children remain uninsured.
Other Health Care Services: In addition to Medicare and Medicaid, HHS
administers a number of other programs, some of which have been added to
the inventory of HHS activities over the last several years. As a
result, HHS has evolved into a sprawling, loosely organized bureaucracy
where several programs are serving similar populations. During 2002, HHS
will ensure strong centralized control and coordination to eliminate
overlap and duplicative activities. Selected health-related 2002
performance goals are highlighted below.
Access to health care: The budget includes a Community and
Migrant Health Center (CMHC) initiative to increase access to
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health care by supporting 1,200 new and expanded community
health center sites over five years. In 2001, 3,263 CMHC sites
delivered high quality, culturally competent care to millions
of uninsured and underserved Americans. In 2002, the number of
health center sites will increase by almost 100. By increasing
the number of health care access points, CMHCs will be able to
help assure the provision of preventive and primary health
care to almost one million more individuals than were served
in 2001.
Healthy Communities Innovation Fund (HCIF): The 2002 Budget
includes an HHS-wide HCIF initiative that will make available
approximately $400 million within existing grant activities to
target innovative solutions in areas of health risks such as
heart disease, adult and childhood Type II diabetes, and
childhood obesity. HHS will ensure that the best and broadest
range of innovative solutions are funded across the country.
Indian Health Service (IHS): IHS is committed to addressing
the major health problems afflicting Native Americans and
Alaska Natives and has targeted diabetes because of the high
prevalence of this disease in this population. IHS' efforts in
disease monitoring, prevention education, and treatment focus
on improving the average blood sugar levels of IHS' diabetic
patients. In 2002, IHS will demonstrate a continued trend in
improved glycemic control in the proportion of Native American
patients with diagnosed diabetes.
Substance Abuse and Mental Health Services Administration
(SAMHSA): SAMHSA is committed to narrowing the treatment gap
between those in need of treatment and those with access to
it, which is almost three million individuals. SAMHSA also
seeks positive, measurable outcomes for those people who do
receive treatment. By 2007, SAMHSA expects that those who
complete substance abuse treatment programs will achieve a 10-
percent increase in full-time employment status, a 10-percent
increase in educational status for adolescents, a 10-percent
decrease in illegal activity, and a 10-percent increase in
general medical health.
Youth drug treatment: While drug use among youth increased
for much of the last decade, there has been some encouraging
news in the most recent data. The percent of youths age 12 to
17 who reported current use of illicit drugs decreased from
11.4 percent in 1997 to nine percent in 1999. In 2002, SAMHSA
will aim to cut monthly marijuana use in this population by 25
percent, from the 1998 baseline of 8.3 percent to 6.2 percent.
Services for the mentally ill: The Surgeon General's 1999
report on mental health states that one in five Americans is
living with a mental health disorder. Mental health services
funded in SAMHSA will advance the goal of increasing the
percent of adults with serious mental illness who are
employed, are living independently, and have had no contact
with the criminal justice system.
Consumer Product Safety Commission (CPSC): In 1999, there were an
estimated 670,000 product-related head injuries to children under 15
years old. As a part of CPSC's effort to reduce head injuries by 10
percent by 2006, this independent agency recalled or took corrective
actions on 20 products in 1999 and 32 in 2000 that presented a
substantial risk of head injury. In 2002, CPSC projects pursuing another
30 recalls or corrective actions of products that present substantial
risk of head injury.
Bioterrorism: HHS' Office of Emergency Preparedness will work with
localities to establish 25 new Metropolitan Medical Response Systems,
which develop and link local public health, public safety, and health
services capabilities to respond to a chemical/biological/nuclear
terrorist incident, for a total of 122 systems in various stages of
development by the end of 2002. HHS will spend $52 million in 2002 on a
civilian stockpile of therapeutics to meet potential threats caused by
the agents listed in the 1999 Antibioterrorism Plan: anthrax, plague,
tularemia, smallpox, and nerve and blister agents. In 2002, HHS plans to
meet preparedness targets for treating victims of these agents as
specified in the Plan. Two new agents have been added to the list, and
HHS
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has begun determination of both treatment methods and victim numbers for
these agents. Preparedness percentages will rise each year, with an
expected readiness level of 100 percent to be reached for each agent on
the list, including the two new agents, by 2004.
HHS' HIV/AIDS Prevention and Care Activities: HHS spends approximately
$2.7 billion for the Centers for Disease Control and Prevention (CDC)
and the Health Resources and Services Administration (HRSA) to prevent
the spread of HIV/AIDS both domestically and increasingly,
internationally, and provide appropriate treatment for those living with
HIV/AIDS.
By 2005, CDC will reduce the incidence of new HIV infections
in the United States by 50 percent, from 40,000 in 1999 to
20,000 in 2005. As part of its efforts to achieve this goal,
CDC will reduce the number of new infections by approximately
six percent by 2002.
Internationally, working with other countries, the U.S.
Agency for International Development, and international and
U.S. Government agencies, CDC will reduce the number of new
infections among 15 to 24 year-olds in sub-Saharan Africa from
an estimated two million, by 25 percent by 2005.
There are an estimated 800,000 to 900,000 persons in the
United States living with HIV infection, two-thirds of whom
are aware of their status. HRSA's Ryan White CARE Act
treatment efforts will increase the number of AIDS Drug
Assistance Program (ADAP) clients receiving HIV/AIDS
medications during at least one month of the year through
State ADAPs from 65,387 in 2000 to approximately 72,000
clients in 2002.
Centers for Disease Control and Prevention: CDC is the leading
prevention agency within the public health service and focuses on
preventing and controlling disease, injury and disability. CDC's
activities cover a broad range of programmatic areas from childhood
immunizations to HIV/AIDS prevention to occupational safety and health
research to infectious disease control and chronic disease prevention.
In 2002, CDC will continue its efforts to improve State and local public
health capacity to detect and respond to emerging infectious diseases.
Fifty-three State health departments will have increased epidemiologic
and laboratory capacity, which is an increase from 33 in 1999. CDC will
also continue to work to improve its financial management, accounting
and budgetary systems so that the total costs of CDC's activities will
be presented more accurately and fairly.
Health 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 supports nearly 60,000 awards and
contracts to universities, medical schools, and other research and
research training facilities while conducting over 1,200 projects in its
own laboratories and clinical facilities. In 2002, NIH-supported
research will aim to add to the body of knowledge about biological
functions, develop new and improved instruments and technologies for use
in research and medicine, and develop new or improved approaches to
diagnosing and treating diseases and disability. NIH performance goals
include:
Continuing the progress of genome sequencing by completing
two-thirds of the human genome sequence with 99.99 percent
accuracy by the end of 2002. This goal builds on a recent
announcement of the completion of a draft sequence and initial
analysis of the human genome. While this draft is extremely
useful, the next stage will involve finishing the sequence
completely with no gaps and with a 99.99 percent accuracy.
Currently about one-third of the sequence is in finished form.
Additionally, progress toward development of a vaccine for HIV/AIDS
by 2007 is encouraging. Diverse approaches to HIV vaccine design are
being pursued, including refinements in the envelope protein strategy,
using other HIV accessory proteins as immunogens, and improved DNA
vaccine strategies.
By 2002, NIH funding will have grown by $9.5 billion, or 70 percent,
since 1998. NIH is working to meet the management challenges that can
arise when an agency receives a substantial infusion of resources over a
short period of time. During the 2000 financial audit, for instance, the
Inspec
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tor General noted that NIH's decentralized and non-standard accounting
processes resulted in numerous errors that were not corrected until
several months later, significantly delaying NIH preparation of reliable
financial statements. NIH is in the process of identifying strategies
and policies that would be implemented in 2002 and 2003 and beyond to
maximize budgetary and management flexibility in the future. Such
strategies would include funding the total costs of an increasing number
of new grants in the grant's first year and supporting some one-time
activities such as high-priority construction and renovation projects.
Besides NIH, eight other HHS agencies supported over $1.2 billion of
public health, health services and policy research in 2001. In light of
the initiative to double funding for NIH, there is an opportunity now to
examine the HHS health research portfolio to streamline management of
the research agenda, identify any overlap in funding for similar
research, and set priorities. Over the coming year, HHS will examine
these issues closely and develop recommendations for reforming the
Department's health research activities. In particular, HHS will
prioritize its research agenda to focus on activities where the Federal
mission and interests are clear, and focus less on research that is more
traditionally and appropriately supported by universities and other
research institutions.
Agency for Healthcare Research and Quality (AHRQ): AHRQ will continue
efforts to gather data on the effectiveness and delivery of treatments.
In 2002, AHRQ will conduct, support, and disseminate research on the
organization, quality, financing, and content of health services. A
minimum of 60 projects will be funded that will reduce medical errors
and enhance patient safety. Evidence-based Practice Centers will produce
a minimum of 18 evidence reports and technology assessments that can
serve as the basis for interventions to enhance health outcomes and
quality by improving practice.
Office of the Secretary (OS): The OS will take the lead across HHS in
ensuring that operations and investments are managed effectively and
produce results. Funding for OS will grow by 14 percent in 2002, which
will include major, new investments in information technology. The
budget supports efforts to streamline HHS' decentralized approach to
departmental management with the goal of enhancing coordination,
eliminating costly duplication of efforts, and developing unified
approaches and measurable outcomes for several of the key management
challenges. For example, HHS will move toward a unified financial
management system to streamline accounting operations throughout the
Department and consolidate Department-level financial reporting. OS will
also promote a Department-wide information technology (IT) system
design, to find efficiencies in the Department's current internal IT
spending base of $1.5 billion. Additionally, HHS will also review
opportunities for managing and consolidating similar programs.
Public Health Regulation and Food Safety Inspection: The Food and Drug
Administration (FDA) spends over $1.2 billion a year to promote public
health by ensuring that foods are safe and wholesome and drugs,
biological products, and medical devices are safe and effective. It
leads Federal efforts to review new products and ensure that regulations
enhance public health without unnecessary burden. The FDA also supports
important research and consumer education.
To allow innovative new drugs, medical devices, and other products to
be made available to the public more quickly, FDA has set the following
performance goals for 2002:
Review and act on 90 percent of standard original new drug
application submissions within 10 months of receipt and 90
percent of priority original new drug application submissions
within six months of receipt, while handling a new drug
application workload that grows annually; and,
Complete first action on 90 percent of new medical device
applications (known as pre-market applications) within 180
days, compared to 74 percent in 1999.
To allow for more thorough inspection of imported foods, FDA has set
the following performance goal for 2002:
Increase the number of import inspections of high-risk foods
to 60,000 in 2002.
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The Food Safety and Inspection Service (FSIS), in the U.S. Department
of Agriculture (USDA), inspects the Nation's meat, poultry, and egg
products at over 6,000 establishments nation-wide. In 1996, FSIS began
implementing a scientifically-based inspection system (Hazard Analysis
and Critical Control Point (HACCP)) that requires meat and poultry
plants to implement food safety controls and conduct sanitation and
microbiological testing. In addition to in-plant inspection, FSIS
conducts foreign and State program reviews, risk assessments, and
consumer education to reduce the prevalence of harmful pathogens on U.S.
meat and poultry that contribute to foodborne illness. USDA has the
following food safety goal:
In 2002, make continued progress towards the five-year goal
of reducing by 50 percent the prevalence of salmonella on
certain raw meat and poultry products by 2005.
Workplace Safety and Health
In 2002 the Federal Government will spend over $670 million to
promote safe and healthful conditions for over 100 million workers in
six million workplaces, primarily through the Department of Labor's
Occupational Safety and Health Administration (OSHA) and Mine Safety and
Health Administration (MSHA). Through a combination of compliance
assistance and targeted enforcement, these agencies protect workers from
illness, injury, and death caused by occupational exposure to hazardous
substances and conditions. Although occupational fatalities, injuries,
and illness are at record-low levels, the Government must maintain its
commitment to partner with employers and workers to reduce the over six
thousand fatalities and 5.7 million injuries and illnesses that occur
annually.
In 2002, OSHA will: reduce injury and illness rates by 20
percent in at least 100,000 hazardous workplaces where OSHA
initiates action; reduce injuries and illnesses by 15 percent
at work sites engaged in voluntary, cooperative relationships
with OSHA; and initiate an investigation of 95 percent of
worker complaints within one working day or conduct an on-site
inspection within five working days.
In 2002, MSHA will reduce fatalities and lost-workday
injuries to below the average number recorded for the previous
five years.
Federal Employees Health Benefits Program (FEHBP)
Established in 1960 and administered by the Office of Personnel
Management, the FEHBP is the largest employer-sponsored health insurance
program in the Nation, providing over $20 billion in health care
benefits a year to about nine million Federal employees, annuitants, and
their families.
FEHBP offers a wide range of health insurance plans that enable
employees to choose the benefits package that best suits their
particular health care needs and budgets. Because choice and competition
are hallmarks of the program, the FEHBP reports one of the highest
levels of customer satisfaction of any health care program in the
country. About 85 percent of eligible Federal employees participate in
the FEHBP.
FEHBP is one part of the Government's total compensation package,
and, like other health plans, has seen its costs outpace inflation over
the last few years. The Administration will consider the following:
options to ensure that the Program offers high quality and cost
effective health plans; incentives to Federal employees and annuitants
to choose their plans wisely; and coordination of annuitant health
benefits with future reforms to Medicare.
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, costing $92 billion in 2002
and $540 billion from 2002 to 2006. In addition, self-employed people
may deduct a part (60 percent in 2001, rising to 100 percent in 2003 and
beyond) of what they pay for health insurance for themselves and their
families. Total health-related tax expenditures, including other
provisions, will cost an estimated $109 billion in 2002, and $638
billion from 2002 to 2006.
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To encourage private health insurance coverage, the budget includes a
new refundable tax credit for individuals and families who are not
covered by an employee plan nor eligible for public programs. The budget
also includes new tax provisions to reform and permanently extend
Medical Savings Accounts (MSAs). The budget proposes to help those with
long-term care costs by providing a deduction for long-term care
insurance premiums and an additional personal exemption to home
caretakers of family members. In addition, the budget would improve
flexible spending accounts by allowing up to $500 in unused benefits to
be distributed as taxable income rolled over into an MSA, or rolled over
into a 401(K) or similar plan.