March 17, 2017

Trump proposes 18 percent cut to HHS in budget proposal

Daily Briefing

    President Trump on Thursday released a $1.1 trillion budget blueprint for fiscal year (FY) 2018 that would boost U.S. defense spending by $54 billion and implement corresponding spending cuts for other domestic programs.

    White House budgets, according to The Atlantic, are "primarily a wish list" of the president's priorities that is sent to Congress. Majority leaders in the House and Senate will take Trump's requests under consideration and craft their own budget proposals, which will form the basis of appropriation bills to fund federal departments and agencies, The Atlantic reports.

    Budget provisions affecting HHS

    For instance, the budget blueprint would cut about $15.1 billion, or 17.9 percent, from HHS' current budget, lowering the department's budget to $69 billion. The $69 billion budget would be HHS' lowest budget in almost 20 years, the Washington Post reports.

    The budget blueprint's reductions to HHS funding include about $5.8 billion in cuts to NIH, which would equal about 19 percent of the agency's current $30.3 billion discretionary budget. In addition, the budget blueprint calls for "a major reorganization" of NIH's 27 centers and institutes.

    According to the Post's "To Your Health," the budget blueprint offers few details on how NIH would be reorganized. However, the budget blueprint does call for:

    • Completely eliminating NIH's Fogarty International Center, a $69.1 million program that focuses on facilitating partnerships between medical research institutions in the United States and other countries; and
    • Consolidating the Agency for Healthcare Research and Quality, a division of HHS, into NIH.

    The budget blueprint also states that it will include additional funding for HHS to be used for "program integrity and implementing the 21st Century Cures Act." However, the blueprint calls for eliminating $403 million in HHS funds used to train health care professionals.

    The budget blueprint would increase federal funding for substance use disorder treatment and prevention by about $500 million. The blueprint also calls for the creation of an emergency fund that could be used to respond to public health threats, such as disease outbreaks. However, the blueprint does not detail how much money that fund would receive or how it would be funded.

    The budget blueprint would maintain funding for the Ryan White HIV/AIDS program and calls the initiative a "high priority" that the administration wants to continue. According to Vox, the program received $2.3 billion in FY 2017. In addition, the budget blueprint states that the administration seeks to "provid[e] sufficient resources to maintain current commitments and all current patient levels on HIV/AIDS treatment under the President's Emergency Plan for AIDS Relief."

    The budget blueprint also does not specify funding levels for CDC, which currently has a core budget of about $7 billion, according to the Post. However, it does state that the administration would "refor[m]" CDC by creating a $500 million block grant intended "to increase state flexibility and focus on leading public health challenges specific to each state."

    The blueprint also calls for "reforms" in "key public health, emergency preparedness, and prevention programs," which encompass a significant portion of CDC's work, the Post reports. However, the blueprint does not offer specific details on those reforms.

    For Medicare and Medicaid, the budget blueprint offers no funding details, but it states that the Trump administration would seek to uphold "program integrity" for the two federal insurance programs. According to the Post, federal funding for Medicare and Medicaid currently totals about $1 trillion. Office of Management and Budget Director Mick Mulvaney on Wednesday said Trump would not seek to reduce funding for Medicare in FY 2018, Politico Pro reports.

    What to expect from Trump's newly confirmed CMS pick

    Budget provisions affecting FDA

    The budget blueprint would significantly increase the fees health care companies must pay for FDA to review their products, Reuters reports. The blueprint calls for FDA to collect more than $2 billion in such fees in 2018, about double the amount the agency is projected to collect this year. According to Reuters, the budget blueprint would more than double the fees drug and medical device makers pay for FDA product reviews, stating that such companies "can and should pay for their share."

    In addition, the budget blueprint states that the administration will propose changes intended to speed up FDA's review process, though it does not provide details on those proposals.

    Budget provisions affecting VA

    The budget blueprint also calls for a 6 percent, or about $4.4 billion, increase in funding for Veterans Affairs (VA). According to the blueprint, much of that funding would be dedicated "to improve patient access and timeliness of medical care" at VA medical centers.

    In addition, the budget blueprint calls for continuing the VA Choice Program, which was implemented under a VA reform bill (HR 3230) signed into law in August 2014 following a scandal over long wait times for veterans seeking health care and subsequent cover-up efforts. According to the Post, the blueprint asks Congress to authorize an additional $3.5 billion in mandatory funding to continue the program, which is set to expire Aug. 7.

    Budget provisions affecting USDA, HUD

    In addition, the budget blueprint would cut $4.7 billion, or about 21 percent, from the U.S. Department of Agriculture's (USDA) current budget, reducing the department's budget to $17.9 billion. According to The Hill, the blueprint proposes cutting the funds from "discretionary" programs under USDA, including those targeting food safety.

    The blueprint also calls for an additional $20 million in funding for the Department of Housing and Urban Development to address public health hazards such as lead-based paint in houses, though the blueprint would reduce total funding for the department by about $6.2 billion.

    (Merica, CNN, 3/16; Berman, The Atlantic, 3/16; Bernstein, "To Your Health," Washington Post, 3/16; Goldstein, Washington Post, 3/16; Sun, Washington Post, 3/16; Trump budget blueprint, accessed 3/16; Pradhan, Politico Pro, 3/16 [subscription required]; Simon, STAT News, 3/16; Humer, Reuters, 3/16; Rein, Washington Post, 3/16; Belluz, Vox, 3/16; Savransky, The Hill, 3/16; Reuters, accessed 3/16).

    12 things CEOs need to know in 2017

    12 things CEOs need to know in 2017

    The continued growth of the consumer-driven health care market threatens the durability of patient-provider relationships—and, at the same time, the push toward population health management and risk-based payment is greater than ever.

    Hospitals and health systems must adopt a two-pronged strategy to respond to these pressures and serve both public payers and the private sector.

    At the core of that strategy? A formula of accessible, reliable, and affordable care that wins consumer preferences and drives loyalty over time. Below, we share 12 key insights for senior executives working to create a consumer-focused health system.

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