In the budget submitted to Congress on February 2, President Barack Obama is seeking almost $84 billion for the US Department of Health and Human Services (HHS) in fiscal 2016, about a $5 billion increase from the previous year.
The funding would cover everything from a replacement of Medicare’s sustainable growth rate (SGR) formula, to increased resources to combat prescription drug misuse, to an extension of the Medicaid primary care pay raise, to a huge program to take on antibiotic resistance.
The $4 trillion overall budget request also seeks to extend the Children’s Health Insurance Program, which ends this year. The four-year extension would be funded through an increase in tobacco taxes.
The Obama Administration is also asking Congress to give Medicare the authority to negotiate drug prices with pharmaceutical manufacturers.
“The proposal for HHS positions us to continue making historic strides toward priorities we all share: providing Americans with the opportunity to live healthy and productive lives,” said HHS Secretary Sylvia Burwell, in a briefing with reporters.
Addressing Physician Concerns
The president’s budget seeks to reverse some of the negative impacts previous policies have had on physicians.
Calling the SGR “flawed,” Burwell said that the administration wants to see it replaced. “The administration supports the type of bipartisan, bicameral efforts that Congress undertook last year,” she said.
Obama is also seeking to end the automatic budget cuts known as sequestration. Those cuts have resulted in a reduction in physician fees. And the budget calls for a one-year extension of an Affordable Care Act policy that set Medicaid rates on par with Medicare for primary care services.
The budget also proposes improved incentives “to deliver care in the most appropriate ambulatory setting,” but a reduction in reimbursement when services are ordered that financially benefit a healthcare provider.
The Office of the National Coordinator for Health Information Technology (ONC) would receive funds to support the interoperability of electronic health records.
Physicians may also feel the impact of a $99 million request that aims to reduce prescription opioid and heroin abuse, dependence, and overdose. The funds would go in part to the Centers for Disease Control and Prevention, the Substance Abuse and Mental Health Services Administration, the Agency for Healthcare Research and Quality, and the ONC. The money would also fund research on using medication-assisted treatment for opioid dependence in primary care settings.
Cutting Costs, Backing Science
The budget could lead to $423 billion in net savings for Medicare and Medicaid over the next decade, said Burwell.
Among the areas the administration is looking for savings: Medicare Part D drugs. “The administration is deeply concerned with the rapidly growing prices of specialty and brand name drugs,” according to a budget summary issued by the White House. The budget lays out a proposal to let the HHS Secretary “negotiate drug prices for biologics and high-cost drugs,” said the summary. But that would require new legal authority.
“This is a conversation that we will be having, hopefully with the United States Congress,” said Burwell.
The administration is also looking for savings from fraud and abuse efforts and by increasing Part B premiums for Medicare beneficiaries who have Medigap policies.
The White House had already announced a $1.2 billion initiative to fight antibiotic resistant bacteria on January 27. Details are included in the budget request, which doubles the prior year’s funding and seeks to improve antibiotic stewardship; strengthen antibiotic resistance risk assessment, surveillance, and reporting capabilities; and drive research.
Some $100 million out of the $1.2 billion initiative would go to the National Institutes of Health (NIH) to establish a clinical trials network to rapidly test new therapies, said NIH Director Francis S. Collins, MD, PhD, at the briefing.
Overall, the president is seeking $31.3 billion for NIH, which is a $1 billion increase from the fiscal year 2015 (FY15) enacted budget. That includes $70 million in new funding for the BRAIN (Brain Research through Advancing Innovative Neurotechnologies) Initiative.
“This is what this initiative needs to see the full opportunity realized,” said Dr Collins.
The US Food and Drug Administration (FDA) will receive $47 million of the $1.2 billion for evaluating new therapies and trying to remove human antibiotics from agricultural use, said FDA commissioner Margaret Hamburg, MD, at the February 2 briefing.
The FDA’s overall budget request is for $4.9 billion, which is a 9% increase over he FY15 appropriated budget.
The FY16 budget also includes $215 million for the Precision Medicine initiative which Obama detailed on January 30.