[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.
