HHS Sec. Price: Trump’s FY 2018 budget does not ‘confuse spending with success’

On May 23, 2017, President Trump submitted his fiscal year (FY) 2018 budget proposal to Congress. The proposed budget contained the administration’s tax, spending, and policy proposals for FY 2018. The proposed budget was greeted with much criticism due to various program cuts (see $3.6T in cuts spells R-E-S-P-E-C-T in Trump budget, Health Law Daily, May 23, 2017). On June 8, 2017, HHS Secretary Price appeared before the House Ways & Means Committee and discussed the President’s proposals involving HHS programs.

Confusing spending with success

Because the President’s FY 2018 budget was met with so much criticism due to various program cuts, Price began by taking on that issue directly: “President Trump’s budget request does not confuse government spending with government success. The President understands that setting a budget is about more than establishing topline spending levels. Done properly, the budgeting process is an exercise in reforming our federal programs to make sure they actually work—so they do their job and use tax dollars wisely.”

Price continued: “The problem with many of our federal programs is not that they are too expensive or too underfunded. The real problem is that they do not work—they fail the very people they are meant to help. Fixing a broken government program requires a commitment to reform — redesigning its basic structure and refocusing taxpayer resources on innovative means to serve the people that the program is supposed to serve. And sometimes it requires recognition that the program is unnecessary because the need no longer exists or there are other programs that can better meet the needs of the people that the program was originally designed to serve.”

To emphasize this point, Price spoke directly about two federal programs, Aid to Families with Dependent Children and Medicaid.

Aid to Families with Dependent Children

According to Price, the Aid to Families with Dependent Children program undermined self-sufficiency and work. He applauded Congressional action that created the Temporary Assistance for Needy Families (TANF) program that promoted the empowerment of parents through work. He pointed out that TANF caseloads have declined by 75 percent through FY 2016. And that under the TANF program, the employment of single mothers increased by 12 percent from 1996 through 2000, and even after the 2008 recession, employment of single mothers is still higher than before welfare reform.

Medicaid

With regards to the Medicaid program, Price stressed that 20 years ago, annual government spending on Medicaid was less than $200 billion; and that within the next decade, that figure is estimated to top $1 trillion. Despite these investments, Price noted that: (1) one-third of doctors in America do not accept new Medicaid patients; and (2) research shows that enrolling in Medicaid does not necessarily lead to healthier outcomes for the newly eligible enrollee.

To illustrate the failure to achieve healthier outcomes, Price pointed to the results of an Oregon Health Insurance Study that replicated a randomized clinical trial by enrolling some uninsured people in Medicaid through a lottery. Comparing this population to those who remained without coverage, the data showed an increase in emergency room use for primary care, the probability of a diagnosis of diabetes, and the use of diabetes medication. The data also showed no significant effects on measures of physical health such as blood pressure, cholesterol, or average glycated hemoglobin levels (a diagnostic criterion for diabetes).

According to Price, “This mixed impact of Medicaid coverage on health outcomes suggests we need structural reforms that equip states with the resources and flexibility they need to serve their unique Medicaid populations in a way that is as compassionate and as cost-effective as possible.” This is what the President’s FY 2018 budget does, according to Price. It uses state innovation to save and strengthen Medicaid by unleashing state-level policymakers to advance reforms that are tailor-made to meet the unique needs of their citizens. Price estimates that over the next decade, these reforms will save American taxpayers $610 billion.

CHIP

Price further testified that the FY 2018 budget includes provisions to extend funding for the Children’s Health Insurance Program (CHIP). The budget would rebalance the federal-state partnership through a series of reforms, including ending the requirement under section 2001 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) that states move certain children from CHIP into Medicaid and capping eligibility at 250 percent of the federal poverty level to return the focus of CHIP to the most vulnerable and low-income children.

Health security and preparedness

Price affirmed HHS’ role as “the world’s leader in responding to and protecting against public health emergencies — from outbreaks of infectious disease to chemical, biological, radiological, and nuclear threats — and assisting the health care sector to be prepared for cyber threats.”

To support HHS’ public health emergency preparedness and response, Price noted that the President’s budget provides $4.3 billion for disaster services coordination and response planning, biodefense and emerging infectious diseases research, and development and stockpiling of critical medical countermeasures.

Key Public Health Priorities

In his testimony, Price described three new public health crises: (1) serious mental illness; (2) substance abuse, particularly the opioid abuse epidemic; and (3) childhood obesity. He stressed his commitment to these new challenges and noted that the President’s budget would:

  • invest $5 million in new funding authorized by the 21st Century Cures Act for Assertive Community Treatment for Individuals with Serious Mental Illness;
  • include a demonstration within the Children’s Mental Health Services program to test the applicability of new research from the National Institute of Mental Health on preventing or delaying the first episode of psychosis;
  • provide $811 million — an increase of $50 million above the FY 2017 continuing resolution — in support of HHS’ five-part strategy to combat the opioid epidemic; and
  • establish a new $500 million America’s HealthBlock Grant, which will provide flexibility for states and Tribes to implement specific interventions, including those designed to spur improvements in physical activity and the nutrition of children and adolescents, and to treat leading causes of death such as heart disease.

Women’s health services

Price also testified that the President’s budget would increase funding for the Maternal and Child Health Block Grant and Healthy Start to improve the health of mothers, children, and adolescents, particularly those in low-income families. The budget would also maintain funding for a variety of programs serving women, including, community health centers, domestic violence programs, women’s cancer screenings and support, mother and infant programs, and the Office on Women’s Health.

HHS to receive $73.5B under House funding bill, ACA left out

The 2017 Omnibus Appropriations bill allocates a total of $73.5 billion to HHS for the 2017 Fiscal year, ending September 30, 2017. The House Appropriations Committee released the fiscal year 2017 Omnibus Appropriations bill on May 1, 2017. The bill provides discretionary funding for the federal government and prioritizes health while cutting funding for “ineffective or wasteful programs.”

HHS

The HHS funding represents an increase of $2.8 billion above the 2016 enacted funding level and $3.8 billion above the Obama Administration’s budget request. The budget is split among various agencies within HHS to fund what the bill calls “effective, proven programs.”

Funding

The bill allocates $34 billion to the National Institutes of Health (NIH) for research related to Alzheimer’s, antibiotic resistance, and precision medicine. The legislation includes funding for critical disease prevention and biodefense activities by allocating $7.3 billion for the Centers for Disease Control and Prevention (CDC). The bill provides the Substance Abuse and Mental Health Administration (SAMHSA) with $3.6 billion for 2017, with a focus on prevention and treatment of opioid and heroin use. The legislation provides $6.4 billion for HRSA Health Resources and Services Administration (HRSA), in part to fund Community Health Centers.

CMS and the ACA

The bill allocates $3 billion for CMS program management and operations and, notably, does not provide funding to implement Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) programs. The bill continues prohibitions and restrictions on use of federal funds related to the ACA.

HHS’ $83 billion budget proposal under spotlight at House hearing

The House Committee on Ways and Means held a hearing to evaluate HHS’ $82.8 billion discretionary budget request for Fiscal Year (FY) 2017. HHS Secretary Sylvia Mathews Burwell testified at the hearing in support of the agency’s request, noting that the funds are necessary to build on successes under the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), advance medical research, and reform health care delivery.

Programs

Burwell testified that the budget would allow expanded access to health insurance coverage under the ACA by giving HHS another tool to encourage Medicaid expansion. Burwell explained that the budget would give three years of full federal support to any state that chooses to expand its Medicaid program, regardless of when the state elects to expand. The budget would also fund the Children’s Health Insurance Program (CHIP) through FY 2019. Burwell emphasized the importance of funding to advance the way providers are paid, how care is delivered, and the accessibility of quality care. She stressed the need to devote efforts to driving down prescription drug costs through innovative purchasing strategies and delivery system reforms that would be funded under the budget request.

Safety

Burwell testified in support of the $1.1 billion that HHS requested to combat opioid-related deaths. The funding would allow significant increases in access to treatment for individuals addicted to opioids, improve prescribing practices with enhanced prescribing guidelines, and provide preparation for communities and first responders. Her testimony highlighted other areas of funding need for HHS including efforts to increase access to behavioral and mental health care, combat antibiotic-resistant bacteria, and develop international and domestic preparedness.

Welfare

The testimony also noted the importance of supporting efforts related to early childcare, child welfare, and better targeting of funds under the Temporary Assistance for Needy Families (TANF) program. Burwell said that funding increases are necessary to support individuals at all stages of life. She justified budget requests for investments in the care of older adults by noting that the population age 65 and over is projected to more than double to 98 million in 2060.

Program Integrity

Burwell noted that combatting fraud and abuse in the Medicare and Medicaid programs was a top priority for HHS. In her testimony, Burwell explained that HHS hopes to continue efforts to cut fraud, waste, and abuse through the $199 million in new program integrity investments requested under the budget.

Response

Several members of the committee challenged the legitimacy of the budget proposal. For example, in his opening remarks, the Chairman of the House Committee on Ways and Means, Kevin Brady (R-Texas) noted his belief that the budget is “not rooted in reality.”