    [Economic Outlook, Highlights from FY 1994 to FY 2001, FY 2002 Baseline Projections]
    [III. Major Functions of the Federal Government]
    [12.  Health]
    [From the U.S. Government Printing Office, www.gpo.gov]

    [[Page 149]]

                                   12.  HEALTH

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

                                   Table 12-1.  Federal Resources in Support of Health
                                              (Dollar amounts in millions)
    ----------------------------------------------------------------------------------------------------------------
                                                                                                            Percent
                                    Function 550                                     1993        2001       Change:
                                                                                    Actual     Estimate    1993-2001
    ----------------------------------------------------------------------------------------------------------------
    Spending:
      Discretionary budget authority............................................     20,697      38,884         88%
      Mandatory outlays.........................................................     79,775     138,907         74%
    Credit Activity:
       Direct loan disbursements................................................         78   ..........      -100%
       Guaranteed loans.........................................................        340          32        -91%
    Tax expenditures............................................................     53,295      99,750         87%
    ----------------------------------------------------------------------------------------------------------------

      ----------------------------------------------------------------------
      Since 1993, the Clinton-Gore Administration has worked to expand
    access to affordable quality health care for all Americans. When
    President Clinton took office in 1993, the ability of the Nation's
    health care system to deliver high quality care was in question and the
    public health delivery system was badly in need of repair: many children
    were not immunized against deadly diseases; cigarette use among youth
    was increasing; the number of HIV/AIDS deaths was spiraling; and, mental
    health was a low priority. Health care costs were rising at a rapid rate
    and the rate of the uninsured--especially uninsured children--was
    growing. Fraud and abuse plagued the Medicare and Medicaid programs and
    the Medicare Trust Fund was projected to be insolvent by 1999.
      In the past eight years, the Clinton-Gore Administration has
    significantly improved the Nation's health care system. The strong
    economy, preventing medical fraud and abuse, and the Balanced Budget Act
    (BBA) of 1997 extended the solvency of the Medicare Trust Fund to 2025.
    Chief among the Administration's accomplishments to expand health care
    coverage to the uninsured is the creation of the State Children's Health
    Insurance Program (SCHIP). Enacted in the BBA of 1997, SCHIP now
    provides coverage to over three million children and has helped reduce
    the number of uninsured children. The Administration has also been
    successful in expanding Medicaid coverage options to other vulnerable
    groups of uninsured, including workers with disabilities, women with
    breast cancer, and low-income families.
      In addition to expanding access to health care, the Administration
    initiated targeted efforts to improve the quality of care by promoting
    patient protections in managed care, protecting patients' privacy,
    establishing programs to reduce medical errors, and working to eliminate
    health disparities. Federal Government spending and tax incentives have
    provided direct health care services; promoted disease prevention;
    furthered consumer, occupational, and patient safety; and, promoted
    research. The results of these Federal activities include measurable
    improvements in the health of Americans. For example:
      life expectancy increased from 75.5 years in 1993 to an all
              time high of 76.7 years in 1998;
      the infant mortality rate decreased from 837 deaths per 1,000
              live births in 1993 to 720 deaths in 1998, a decrease of 14
              percent;
      United States deaths related to HIV infection decreased
              dramatically from 37,267 deaths in 1993 to 13,426 deaths in
              1998, a decrease of 64 percent; and,

    [[Page 150]]

      the teenage pregnancy rate declined from 116 pregnancies per
              1,000 teenage women in 1990 to 98 pregnancies in 1996, a
              decrease of 16 percent.
      The Federal Government is expected to spend about $178 billion on
    health-related activities and allocate about $100 billion in tax
    incentives in 2001, compared to $100 billion in Federal spending and $53
    billion in tax expenditures in 1993.

    Health Care Services and Financing

      Medicaid: Since 1993, the Administration has worked to expand Medicaid
    coverage to children and families, provide important new health
    insurance options for people with disabilities, improve the quality and
    availability of long-term care services, and protect the fiscal
    integrity of the Medicaid program. This Federal-State health care
    program served more than 33 million low-income Americans in 2000,
    including a fourth of the Nation's children. Medicaid is the largest
    single purchaser of maternity care as well as of nursing home and other
    long-term care services. The Federal Government spent almost $118
    billion on the program (57 percent of the total) in 2000 while States
    spent approximately $89 billion (43 percent).
      Expanding Coverage: Over the past eight years, the Administration has
    expanded coverage to a number of vulnerable uninsured groups.
      The President signed the Ticket to Work and Work Incentives
              Improvement Act of 1999, which created new coverage options
              for workers with disabilities. The Administration also took
              regulatory action giving States flexibility to expand coverage
              to tens of thousands of people with disabilities who will no
              longer need to impoverish themselves to qualify for benefits.
      The Personal Responsibility and Work Opportunity
              Reconciliation Act of 1996 (PRWORA) gave States the
              flexibility to expand Medicaid coverage to more families, and
              put aside $500 million for States to simplify their
              eligibility systems and to conduct outreach. The President has
              taken several actions to improve coverage for those moving
              from welfare to work, including guidance to States to ensure
              that families that remain eligible for Medicaid do not lose
              their health care coverage, and the creation of a performance
              bonus for States with high or improved rates of coverage.
      The President signed legislation granting Medicaid eligibility
              to uninsured women with breast and cervical cancer and to
              young people leaving the foster care system. Coverage will be
              provided to approximately 22,000 women diagnosed with breast
              cancer and to 24,000 youth leaving foster care per year, when
              these options are fully implemented.
      The Administration has actively worked with States to develop
              Medicaid waivers that expand coverage and test new delivery
              and financing arrangements within the budget of the existing
              program.
      Long-Term Care Initiative: To encourage the development of long-term
    care insurance and ensure that those who need long-term care services
    receive them, the President promoted a comprehensive long-term care
    initiative, including tax incentives for long-term care, a new State
    option to support families who provide long-term care, and the
    availability of private long-term care insurance for Federal employees.
    The Administration approved over 200 Medicaid home and community-based
    waivers nationwide, helping hundreds of thousands of people receive
    critical health care services at home rather than in an institution. The
    Health Care Financing Administration (HCFA) issued guidance to the
    States to assist them in addressing the Supreme Court's Olmstead
    decision, which moves States towards providing services to people with
    disabilities in the ``most integrated setting'' appropriate.
      Program Integrity: The President successfully worked with the Congress
    to enact legislation that curbed double-digit growth in Disproportionate
    Share Hospital payments in the early 1990s. In October 2000, the
    Administration issued a proposed regulation aimed at curbing
    questionable State reimbursement practices through the manipulation of
    upper payment limits for certain public providers. The regulation was
    issued in January 2001.

    [[Page 151]]

      State Children's Health Insurance Program (SCHIP): In an effort to
    reduce the growing number of uninsured children, SCHIP was one of the
    Administration's highest priorities in the BBA of 1997. The single
    largest investment in children's health care since the creation of
    Medicaid in 1965, SCHIP provides $40 billion over 10 years for States to
    expand health insurance coverage to uninsured children in families with
    too much income to qualify for Medicaid but too little to afford private
    coverage. States have broad flexibility to design their programs, while
    beneficiaries are protected through basic Federal standards. All fifty
    States, the District of Columbia and the five U.S. Territories have
    implemented SCHIP.
      HCFA and the States have succeeded in meeting the SCHIP/Medicaid goal
    of decreasing the number of uninsured children by enrolling children in
    SCHIP and Medicaid. In 1999, the number of uninsured children declined
    for the first time since the Census Bureau began collecting health
    insurance data in 1987. Medicaid enrollment increased by more than a
    million children in 1999, while over three million children were
    enrolled in SCHIP as of January 2001.
      The Administration has sought to build on the goals of SCHIP. In its
    2001 Budget, the Administration proposed a 10-year, $76 billion
    initiative that would convert SCHIP into the FamilyCare Program and
    provide coverage to uninsured parents of children currently enrolled in
    SCHIP. The Administration has also sought to expand outreach activities
    to ensure that all children eligible for federally-sponsored health
    insurance programs receive coverage.

      Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act
    of 2000 (BIPA): The Administration worked to secure enactment of the
    BIPA, which invests about $35 billion over five years to address some of
    the overly aggressive payment reductions from the BBA of 1997 and
    provide enhanced beneficiary protections in Medicare and Medicaid. The
    bill:
      increases payments to safety net, rural and teaching
              hospitals, and other health care providers;
      extends Medicaid coverage for people leaving welfare for work;
      makes it easier for States to enroll uninsured children in
              Medicaid and SCHIP; and,
      improves Medicare preventive benefits.
      The BIPA builds on the Balanced Budget Refinement Act of 1999 which
    also addressed the adequacy of provider payments.

      Nursing Home Quality Initiative: The President worked to improve the
    quality of long-term care by helping States strengthen nursing homes
    enforcement tools to ensure that facilities meet Federal quality
    standards, and by increasing Federal oversight of nursing home quality
    and safety standards. This funding has allowed States to improve and
    target nursing home inspections and respond to resident and family
    complaints more quickly.

    Public Health Care Services

      Health Research: The Administration has increased funding for
    biomedical research at the National Institutes of Health (NIH) by over
    $10 billion, almost doubling the 1993 level of $10.4 billion. The
    Federal Government's support of basic and clinical biomedical research
    is a key to improving human health. The priority the Administration has
    placed on funding for biomedical research has led to tremendous
    advancements in the diagnosis, treatment, and prevention of disease and
    illness in the last eight years.
      On June 26, 2000, NIH announced the completion of the
              sequencing of the human genome, which has the potential to
              revolutionize the ways health professionals diagnose, treat,
              and cure disease.
      In response to findings that putting babies on their backs to
              sleep decreases the risk of Sudden Infant Death Syndrome, NIH
              launched a national Back to Sleep public education campaign in
              1994 to heighten awareness among parents and health care
              providers.
      NIH-funded researchers were able to uncover new therapies to
              prevent breast cancer in high-risk populations.

    [[Page 152]]

      NIH-funded research also led to the development of new immune-
              based therapies to prevent rejection of transplanted organs.

      Children's Hospital Graduate Medical Education (GME): Medicare is the
    largest explicit financier of physician training in the United States.
    Since free-standing children's teaching hospitals do not serve the
    elderly, they qualify for almost no Federal Medicare GME support. To
    level the playing field in GME financing, and to ensure that the health
    care work force includes sufficient numbers of physicians trained to
    care for children, this Administration proposed funding in 2000
    specifically for Children's Hospital Graduate Medical Education. In
    2001, $235 million was provided, a 487-percent increase over the 2000
    funding level of $40 million. Through this investment, the program seeks
    to increase the number of residents who train in children's hospitals by
    providing a level of Federal GME support more consistent with other
    hospitals.
      Patient Safety: In response to a December 1999 Institute of Medicine
    study reporting that preventable medical errors may cause up to 98,000
    deaths in the United States annually, the Administration launched a new
    initiative aimed at improving patient safety. The Agency for Healthcare
    Research and Quality will pursue a $50 million research agenda in 2001
    and plans to create a new Center for Patient Safety. In 2001, the Food
    and Drug Administration (FDA) received a 35-percent increase in funding
    over 2000, to $27 million, to fund the modernization of its existing
    adverse event reporting systems. Information on adverse events and
    medical errors is submitted to the FDA by doctors, consumers,
    manufacturers, and other medical professionals.
      Public Health Regulation and Safety Inspection: The Administration has
    increased funding for FDA by 57 percent from $826 million in 1993 to
    $1.3 billion in 2001. This increase, in conjunction with the 1997 FDA
    Modernization Act, signed into law by President Clinton, has reduced
    review times for new drugs, medical devices, and biologics. For example,
    average drug review times have decreased since the beginning of the
    Administration from nearly three years to just over one year. Consumers
    now have improved access to breakthrough medical technologies that can
    improve and save lives, while being assured that new products are both
    safe and effective.
      ----------------------------------------------------------------------

                                           Table 12-2.  Food Safety Initiative
                                     (Budget authority, dollar amounts in millions)
    ----------------------------------------------------------------------------------------------------------------
                                                                                                            Percent
                                                                                     1997        2001       Change:
                                                                                    Actual      Enacted    1997-2001
    ----------------------------------------------------------------------------------------------------------------
    Department of Agriculture...................................................         57         165        189%

    Department of Health and Human Services.....................................        114         257        125%
                                                                                 -----------------------------------
      Total.....................................................................        171         422        147%
    ----------------------------------------------------------------------------------------------------------------

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

      Food Safety Initiative: In 1997, the President announced the Food
    Safety Initiative, a comprehensive initiative to improve food safety and
    reduce foodborne illness. In 1998, the President created the President's
    Council on Food Safety to strengthen coordination and planning across
    the Federal food safety agencies. Funding for the Food Safety Initiative
    at the Department of Health and Human Services (HHS) increased from $114
    million in 1997 to $257 million in 2001, an increase of 125 percent (see
    Table 12-2). This additional funding allowed for increased FDA
    inspections of high risk food production facilities and improved
    outbreak response, surveillance, and public education by both the
    Centers for Disease Control and Prevention (CDC) and the FDA. Illness
    from bacterial foodborne pathogens decreased by 20 percent from 1997 to
    1999.
      The landmark Pathogen Reduction/Hazard Analysis Critical Control Point
    (PR/HACCP) rule was also published in 1994, modernizing the Nation's
    meat and poultry inspection system for the first time in nearly 100

    [[Page 153]]

    years by utilizing more science-based approaches to inspection.
    Preliminary foodborne illness surveillance data suggest that significant
    reductions in the incidence of foodborne illnesses have occurred since
    FSIS began adoption of the HACCP system. Salmonellosis (salmonella
    enteritidis) declined 48 percent from 1996 to 1998, and
    Campylobacteriosis declined 26 percent from 1996 to 1998. These gains
    were achieved not only through vigorous product testing for deadly
    pathogens, but also through daily inspection provided by more than 7,000
    Food Safety and Inspection Service (FSIS) inspectors and veterinarians.
      Funding for the FSIS in the U.S. Department of Agriculture (USDA)
    increased from $495 million in 1993 to $697 million in 2001, an increase
    of 41 percent. FSIS inspects the Nation's meat, poultry, and egg
    products, ensuring that they are safe, wholesome, and not adulterated.
    In 1994, the Department of Agriculture Reorganization Act established
    the Office of the Under Secretary for Food Safety and consolidated USDA
    food safety inspection activities in a new public health mission area of
    USDA within FSIS.

      Smoking as a Public Health Problem: Tobacco use is the second leading
    cause of death in the United States, and is the largest preventable
    cause of death. Over 400,000 people die prematurely each year due to
    tobacco-related illnesses. The Administration has undertaken concerted,
    comprehensive efforts to make clear the public health menace that
    smoking represents, particularly to our Nation's youth, and to back up
    those efforts with specific policy, legislative, and revenue proposals.
      Education and prevention efforts to curb youth smoking: In
              2001, more than $100 million was provided for the Centers for
              Disease Control's tobacco education and control efforts--a
              tenfold increase since 1993. The focus of these efforts was to
              deglamorize tobacco, warn young people of its addictive nature
              and deadly consequences, and help parents discourage their
              children from taking up the habit.
      Price increases and penalties to reduce youth smoking: Public
              health experts agree that the single most effective way to cut
              youth smoking is to raise the price of cigarettes and other
              tobacco products. The BBA of 1997 increased cigarette excise
              taxes by 10 cents per pack (from 24 cents to 34 cents) in
              January 2000, which adds an additional five cent excise tax
              per pack in January 2002. Since 1997, smoking rates for youths
              aged 12-17 have decreased from 19.9 percent to 15.9 percent in
              1999.
              The Administration's last three budgets have pressed for
              further, major cigarette price increases and have included
              strong disincentives for the tobacco companies to stop
              targeting children. To build on the momentum of price
              increases stemming from the Tobacco Settlement Agreement
              between tobacco companies and the States, the Administration's
              2001 Budget proposed a combination of additional excise tax
              increases and a youth smoking assessment. Congress failed to
              enact these proposals.
      Authority to regulate tobacco products: In 1995, the
              Administration and the FDA wrote strong, effective rules to
              prevent children under age 18 from buying any tobacco product,
              anywhere in the United States. The FDA was also prepared to
              end tobacco advertising aimed at young people. In March 2000,
              the Supreme Court ruled that the FDA must have explicit
              authorization from the Congress before it can regulate
              tobacco. In response, the Administration has urged the
              Congress to give the FDA's tobacco regulations the force of
              law, building on bipartisan efforts in 1998 where a clear
              majority of Senators backed explicit legislative authority for
              FDA to regulate tobacco.
      Justice Department litigation against tobacco companies: The
              Administration is also pursuing litigation against tobacco
              manufacturers for deceiving the public about the dangers of
              smoking. This lawsuit is part of a continuing effort to hold
              tobacco companies accountable for their conduct and to force
              the industry to forfeit all illicit profits. The
              Administration has repeatedly urged the Congress to provide
              the necessary funding to continue these Justice Department
              litigation efforts. The Administration succeeded in persuading

    [[Page 154]]

              the Congress not to legislate limitations and, therefore,
              funding to continue this litigation remains available for
              2001.

      Childhood Immunizations: In 1993, the President launched a major
    Childhood Immunization Initiative to improve immunization rates among
    children in the United States. As part of this initiative, the
    Administration established the Vaccines for Children (VFC) program in
    1994 to ensure the availability of recommended vaccines for low-income
    children. Since 1993, the Administration has tripled funding for
    childhood immunizations from $341 million in 1993 to over $1 billion in
    2001--an increase of 300 percent. Childhood immunization rates are now
    at an all-time high, with 90 percent of children receiving critical
    vaccines by the age of two.
      Domestic and Global HIV/AIDS: The Administration has demonstrated its
    leadership in addressing HIV/AIDS, both domestically and
    internationally, through funding increases for research, prevention, and
    treatment activities. Since 1993, research on HIV/AIDS at NIH has
    doubled, from $1.1 billion to an estimated $2.2 billion in 2001. This
    research has increased our understanding of HIV dramatically and led to
    the development of highly effective antiretroviral therapies that have
    extended the lives of people with HIV/AIDS. Funding for domestic HIV/
    AIDS prevention has grown from $498 million in 1993 to $788 million in
    2001, an increase of $290 million, or 58 percent, which has helped
    reduce the rate of newly reported HIV/AIDS cases in infants due to
    perinatal transmission by 73 percent. The Administration has also
    increased funding for the Ryan White CARE Act by 369 percent, or $1.4
    billion, from 1993 through 2001, enabling approximately 500,000 people
    to access HIV/AIDS related medical and support services each year,
    including lifesaving drug therapies. The Administration's contribution
    to the HIV/AIDS epidemic in the United States has resulted in a 70-
    percent decline in HIV/AIDS mortality since 1995 and AIDS is no longer
    among the top 15 causes of death--it was the eighth leading cause in
    1996.
      To address the HIV/AIDS epidemic internationally, in 1999 the
    Administration established the Leadership and Investment in Fighting an
    Epidemic (LIFE) Initiative, an interagency effort to slow the spread of
    HIV/AIDS abroad, primarily in sub-Saharan Africa. With USAID and the
    Departments of Defense and Labor, the Centers for Disease Control and
    Prevention received $35 million in 2000 and $105 million in 2001, an
    increase of $70 million (199 percent) for prevention activities
    internationally. The U.S. funding will contribute to the United Nations
    goal of reducing the incidence of HIV infection 25 percent among 15-24
    year olds by 2005.
      ----------------------------------------------------------------------

                                     Table 12-3.  Government-wide HIV/AIDS Spending
                                     (Budget authority, dollar amounts in millions)
    ----------------------------------------------------------------------------------------------------------------
                                                                                                            Percent
                                       Agency                                        1993        2001       Change:
                                                                                    Actual      Enacted    1993-2001
    ----------------------------------------------------------------------------------------------------------------
     Health and Human Services..................................................      3,708      10,110        173%
     Social Security Administration.............................................        675       1,312         94%
     Veterans...................................................................        299         358         20%
     U.S. Agency for International Development..................................        117         330        182%
     Office of Personnel Management.............................................        175         293         67%
    Housing and Urban Development...............................................        100         258        158%
     Defense....................................................................        155         110        -29%
     Justice/Bureau of Prisons..................................................          5          15        200%
     Labor......................................................................          1          12     -1,100%
     Other agencies.............................................................          1           1   ..........
                                                                                 -----------------------------------
       Total....................................................................      5,236      12,799        144%
    ----------------------------------------------------------------------------------------------------------------

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

      Mental Health: The Surgeon General's 1999 report on mental health
    states that one in five Americans is living with a mental health
    disorder, and that less than two-thirds of adults with severe mental
    illness receive

    [[Page 155]]

    treatment. Reflecting its commitment to improving mental health, it
    supported the law that gives parity to mental health benefits in private
    health plans. The Administration also increased funding for mental
    health services through the Substance Abuse and Mental Health Services
    Administration. The 2001 funding level for Mental Health is $782
    million, a $151 million increase over 2000, more than doubling the 1993
    level. The largest part of this increase is an additional $64 million
    for the Mental Health Block Grant, which supports State efforts to
    develop community-based systems of care for the most seriously mentally
    ill where patients can receive the necessary treatment and supports to
    live self-fulfilling, productive lives. This increase will bolster
    States' youth violence abatement programs, jail diversion programs for
    youth, post-incarceration and post-hospitalization programs, suicide
    prevention programs for youth and the elderly, and will better equip
    States in responding to the mental health needs of persons moving from
    welfare to work. Increases for mental health services also include:
      $42 million for Knowledge Development and Application
              activities;
      $25 million for new Targeted Capacity Expansion grants for
              early intervention and prevention, as well as local capacity
              expansion;
      $9 million for Children's Mental Health Services;
      $6 million for grants to assist the homeless; and,
      $5 million for grants to ensure protections for the mentally
              disabled against abuse, neglect and civil rights violations.

      Substance Abuse Treatment and Prevention: Funding for substance abuse
    treatment and prevention services has increased by $501 million, or 31
    percent, since 1993. The 2001 funding level of $2.1 billion includes
    $1.67 billion for the Substance Abuse Block Grant to assist States in
    their efforts to prevent and treat substance abuse. In 2001, Block Grant
    funding will serve over 1.6 million people. While national levels of
    illicit drug use among 12-17 year olds increased from 1992 until 1997, a
    combination of Federal, State, and local investments in treatment and
    prevention has contributed to a 21-percent decline in that population's
    rate of use between 1997 and 1999.
      Family Planning: Since 1970, the Title X--Family Planning program has
    been the cornerstone of a national network to reduce unintended
    pregnancy and prevent adolescent pregnancy. The Federal effort has
    contributed to a 17-percent decline in the teenage pregnancy rate since
    it peaked in 1990. The Administration has increased family planning
    funding by 46 percent from $173 million in 1993 to $254 million in 2001.
    In addition to providing contraceptive services and abstinence
    education, the family planning program also finances sexually
    transmitted disease prevention and treatment, including the prevention
    of HIV transmission. Since 1996, the number of HIV tests administered by
    family planning clinics has increased by over 50 percent enabling more
    HIV infected individuals to enter into care and treatment. The
    Administration has consistently fought legislative riders limiting
    women's access to contraceptive health services. For example, in 2001,
    the Administration fought successfully to exclude language that would
    have restricted public health funds for emergency contraception health
    services in primary and secondary schools.
      Indian Health Service (IHS): The Administration has demonstrated its
    commitment to addressing major health problems affecting Native
    Americans and Alaska Natives through a $1.2 billion, or 58-percent,
    funding increase for the IHS since 1993. This funding enabled IHS to
    improve the quality and access to basic medical care for Native
    Americans, and also target a number of health problems, such as
    diabetes, that disproportionately affect Native Americans. IHS efforts
    in monitoring, prevention education, and treatment have resulted in an
    eight percent improvement in the average blood sugar levels of IHS'
    diabetic patients between 1994 and 1999.
      Racial Disparities in Health: In 1998, the President established the
    national goal of eliminating disparities in health status among racial
    and ethnic groups by the year 2010 in six key health areas where
    minority groups were disproportionately affected: infant mortality,
    cancer, immunizations, cardiovascular disease, HIV/AIDS, and diabetes.
    As part of

    [[Page 156]]

    this effort, $10 million was provided in 1999 to fund demonstration
    projects to better understand and address these racial disparities in
    health. In 2001, these projects were funded at $38 million, an increase
    of $28 million, or 279 percent. Through the Agency for Healthcare
    Research and Quality, the Administration invested more than $40 million
    annually in 2000 and 2001 to fund health disparities research. In 1999,
    the Administration created the Initiative to Address HIV/AIDS in Racial
    and Ethnic Minority Communities, with a $167 million investment in HIV/
    AIDS research, prevention, and treatment to reduce disparities. This
    investment has since grown to $357 million in 2001. In 2001, NIH will
    establish the Center for Research on Minority Health and Health
    Disparities to lead NIH's efforts to reduce health disparities. NIH
    conducts over $1 billion of research annually on minority health and
    health disparities.
      Consolidated Health Centers: Through a network of roughly 700 clinics,
    the Consolidated Health Centers provide preventive and primary care
    services to over nine million patients in the poorest rural and inner
    city areas. These services reduce hospitalizations and emergency room
    use and help prevent more expensive chronic disability care. Funding for
    Consolidated Health Centers has increased by 71 percent from $683
    million in 1993 to $1,169 million in 2001. Through this funding,
    Consolidated Health Centers will continue their efforts to eliminate
    health disparities by assuring access to high-quality healthcare.
      Community Access Program (CAP): In 1999, the Administration launched a
    new initiative to coordinate health care systems, increase the volume of
    services delivered, and establish an accountability system to ensure
    adequate care for the uninsured. CAP grant funds will be tailored to
    meet a community's health care needs, including developing management
    information systems, streamlining patient intake, coordinating patient
    referral arrangements, and providing comprehensive services for the
    uninsured. In 2000, $25 million was awarded to 23 communities and, with
    the $125 million provided in 2001, at least 100 new communities will
    receive CAP grants.
      Response to the Threat of Bioterrorism: Over the past three years, the
    Administration has marshalled substantial resources to deal with
    emerging threats relating to potential terrorist use of biological and
    chemical weapons. These efforts are part of a broader, multi-agency
    effort to address counterterrorism. HHS funding for medical and public
    health preparedness related to these threats has increased from $16
    million in 1998 to an estimated $326 million in 2001. Key components of
    the Administration's bioterrorism strategy include establishing a
    medical stockpile of vaccines and therapeutics, improving vaccine
    research and development, intensifying public health surveillance
    activities, conducting medical responder training and exercises, and
    supporting State and local governments to help prepare for potential
    bioterrorist threats.
      Consumer Product Safety Commission (CPSC): The CPSC is an independent
    Federal regulatory agency that helps keep American families safe by
    reducing the risk of injury or death from consumer products. CPSC safety
    standards annually prevent approximately 150 to 200 infant deaths from
    poorly designed cribs. Since 1993, financing for CPSC's efforts to
    develop voluntary safety standards, enforce mandatory standards, and
    recall harmful products has grown by 24 percent from $42 million in 1993
    to $53 million in 2001.

    Workplace Safety and Health

      In 2001, the Federal Government will spend more than $670 million per
    year--almost 40 percent more than 1993--to promote safe and healthful
    conditions for over 100 million workers in six million workplaces,
    through the Department of Labor's Occupational Safety and Health
    Administration and Mine Safety and Health Administration. Through a
    combination of enforcement, compliance assistance, strategic
    partnerships, and regulatory approaches, these agencies protect workers
    from illness, injury, and death caused by occupational exposure to
    hazardous substances and conditions. Their efforts have contributed to
    significant improvements in the Nation's workplaces.
      From 1993 to 1998, the most recent year for which data are available,
    the overall occupational injury and illness rate has dropped 21 percent,
    to a record low of 6.7 cases per 100 thousand full-time equivalent

    [[Page 157]]

    workers. The mining industry experienced a 28-percent reduction in its
    occupational injury and illness rate during the same period.
      From 1993 to 1999, the number of occupational fatalities dropped four
    percent, from 6,271 to a record low of 6,023. Mine fatalities, which
    during the 1970s ranged from 200 to 300 per year, in 1999 numbered 79.

    Federal Employees Health Benefits Program (FEHBP)

      Established in 1960 and administered by the Office of Personnel
    Management (OPM), the FEHBP is America's largest employer-sponsored
    health benefit program, providing over $19.5 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 more than 250 participating health
    plans across the country. The FEHBP is widely viewed as a model health
    care program. Many of the accomplishments noted below are examples of
    this leadership.
      OPM has greatly improved the quality and quantity of health plan
    information provided to enrollees, consumer protections, and the scope
    of health benefits covered by the program. In 1993, the annual health
    benefits open season guide provided program enrollees little more than
    cost information regarding the program's participating carriers. By 1999
    these materials had been enhanced to provide accreditation, performance,
    and customer satisfaction information in plain language consumers can
    easily understand. The FEHBP became fully compliant with the President's
    Patients' Bill of Rights in 2000, providing enrollees even stronger
    rights of information disclosure, choice of providers and plans, rights
    of complaint and appeal, and other consumer protections.
      Between 1993 and 1999, FEHBP benefits were greatly expanded. OPM
    adopted several important benefits policies to improve access to women's
    health services. They include: benefits for the diagnosis and treatment
    of infertility problems; benefits for mammography screening consistent
    with National Cancer Advisory Board recommendations; coverage for breast
    reconstructive surgery; coverage for high dose chemotherapy in
    conjunction with bone marrow transplants for breast and certain ovarian
    cancers; guaranteed hospital stays for mastectomy, as well as for
    maternity conditions subject to the Newborns' and Mothers' Health
    Protection Act of 1996; direct access to obstetricians and gynecologists
    consistent with the President's Patients' Bill of Rights; and, the
    provision of a full range of contraceptive drugs and devices approved by
    the Food and Drug Administration.
      In addition, OPM provided guidance to FEHBP-participating carriers on
    family-focused services: i.e., the provision of benefits for childhood
    immunizations; offering supplemental dental and vision coverage;
    benefits for routine screening and diagnostic testing for colorectal
    cancer and other diseases; making health plan pre-authorization and
    referral procedures customer-friendly; and, other customer service
    enhancements. Also, the FEHBP's benefit structure now provides parity in
    the provision of mental health and substance abuse benefits, and FEHBP
    carriers are instituting initiatives to improve health care quality
    through the prevention of medical errors and enhancements in patient
    safety.
      OPM implemented premium conversion in the FEHBP in 2000. Under this
    arrangement, Federal employees use pre-tax dollars to pay health
    insurance premiums to the program. Premium conversion uses Federal tax
    rules to let employees deduct their share of health insurance premiums
    from their taxable income, thereby reducing their taxes and making
    health coverage more affordable.

      Long-Term Care Insurance Program: Since 1998, OPM worked with the
    Administration, the Congress, and other stakeholders to bring about the
    enactment of a group long-term care insurance program for Federal
    employees and retirees, United States Postal Service employees and
    retirees, active duty and retired military personnel, and certain
    qualified relatives. Passed in 2000, the Act enables approximately 13
    million people to choose long-term care insurance by October 2002, on an
    enrollee-pay-all basis. OPM is in the process of developing a flexible
    long-term care product, including provisions for nursing

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    home care, personal care, home health care, and adult day care.

    Tax Incentives

      In the past eight years, the Administration has improved health tax
    policy. The Administration supported allowing self-employed people to
    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. The Health Insurance Portability and Accountability Act of
    1996 added a number of tax incentives as well, including clarifying the
    taxation of qualified long-term care insurance premiums, expenses and
    benefits; modifying the taxation of accelerated death benefits under
    life insurance contracts; and expanding penalties provided under the
    Consolidated Omnibus Budget Reconciliation Act of 1995 to enforce group
    health plan portability, access, and renewability requirements. The
    Administration has also supported the development of drugs for certain
    rare diseases or conditions through the Orphan Drug Credit.