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Withdrawal/Redaction Sheet
Clinton Library
DOCUMENT NO.
SUBJECT/TITLE
DATE
RESTRICTION
AND TYPE
001a. letter
From Bill Clinton to Mr Frederick H MacVicar; RE: address [partial]
09/04/1996
P6/b(6)
(1 page)
001b. letter
From Frederick H MacVicar To President Bill Clinton; RE:
08/05/1996
P6/b(6)
address/phone/fax number [partial] (1 page)
COLLECTION:
Clinton Presidential Records
Policy Development
Lyn Hogan
OA/Box Number: 10043
FOLDER TITLE:
Child Wel [Welfare]---Long-Term [1]
2011-1010-S
ms196
RESTRICTION CODES
Presidential Records Act - [44 U.S.C. 2204(a)]
Freedom of Information Act - [5 U.S.C. 552(b)]
P1 National Security Classified Information [(a)(1) of the PRAJ
b(1) National security classified information |(b)(1) of the FOIA]
P2 Relating to the appointment to Federal office [(a)(2) of the PRAJ
h(2) Release would disclose internal personnel rules and practices of
P3 Release would violate a Federal statute [(a)(3) of the PRA]
an agency |(b)(2) of the FOIA]
P4 Release would disclose trade secrets or confidential commercial or
h(3) Release would violate a Federal statute [(b)(3) of the FOIA]
financial information |(a)(4) of the PRAJ
b(4) Release would disclose trade secrets or confidential or financial
P5 Release would disclose confidential advice between the President
information [(b)(4) of the FOIA]
and his advisors, or between such advisors [a)(5) of the PRA|
b(6) Release would constitute a clearly unwarranted invasion of
P6 Release would constitute a clearly unwarranted invasion of
personal privacy [(b)(6) of the FOIA]
personal privacy [(a)(6) of the PRAJ
b(7) Release would disclose information compiled for law enforcement
purposes |(b)(7) of the FOIA]
C. Closed in accordance with restrictions contained in donor's deed
b(8) Release would disclose information concerning the regulation of
of gift.
financial institutions [(b)(8) of the FOIA]
PRM. Personal record misfile defined in accordance with 44 U.S.C.
b(9) Release would disclose geological or geophysical information
2201(3).
concerning wells [(b)(9) of the FOIA]
RR. Document will be reviewed upon request.
Withdrawal/Redaction Marker
Clinton Library
DOCUMENT NO.
SUBJECT/TITLE
DATE
RESTRICTION
AND TYPE
001a. letter
From Bill Clinton to Mr Frederick H MacVicar; RE: address [partial]
09/04/1996
P6/b(6)
(1 page)
COLLECTION:
Clinton Presidential Records
Policy Development
Lyn Hogan
OA/Box Number: 10043
FOLDER TITLE:
Child Wel [Welfare]---Long-Term [1]
2011-1010-S
ms196
RESTRICTION CODES
Presidential Records Act - [44 U.S.C. 2204(a)]
Freedom of Information Act - [5 U.S.C. 552(b)]
PI National Security Classified Information [(a)(1) of the PRAJ
b(1) National security classified information [(b)(1) of the FOIA]
P2 Relating to the appointment to Federal office [(a)(2) of the PRAJ
h(2) Release would disclose internal personnel rules and practices of
P3 Release would violate a Federal statute [(a)(3) of the PRA]
an agency [(b)(2) of the FOIA]
P4 Release would disclose trade secrets or confidential commercial or
b(3) Release would violate a Federal statute |(b)(3) of the FOIA]
financial information [(a)(4) of the PRA]
b(4) Release would disclose trade secrets or confidential or financial
P5 Release would disclose confidential advice between the President
information [(b)(4) of the FOIA]
and his advisors, or between such advisors [a)(5) of the PRAJ
b(6) Release would constitute a clearly unwarranted invasion of
P6 Release would constitute a clearly unwarranted invasion of
personal privacy |(b)(6) of the FOIA]
personal privacy |(a)(6) of the PRA]
b(7) Release would disclose information compiled for law enforcement
purposes [(b)(7) of the FOIA]
C. Closed in accordance with restrictions contained in donor's deed
b(8) Release would disclose information concerning the regulation of
of gift.
financial institutions [(b)(8) of the FOIA]
PRM. Personal record misfile defined in accordance with 44 U.S.C.
b(9) Release would disclose geological or geophysical information
2201(3).
concerning wells [(b)(9) of the FOIA]
RR. Document will be reviewed upon request.
[∞/la]
September 4, 1996
Mr. Frederick H. MacVicar
P6/(b)(6)
Dear Fred:
Thank you very much for your letter and for sharing your
concept for a positive national program for American youth.
I have passed along your proposal to my staff.
As I have said many times, children are our most precious
resource and our most profound responsibility, and America must
not retreat from the investments we have made to ensure their
well-being. As I work with Congress to achieve meaningful
reforms, I will continue to fight for and strengthen our
initiatives in education, crime prevention, nutrition,
and health - - initiatives that benefit all Americans.
I look forward to your continued and active involvement
in this vital endeavor and stand with you in your efforts to
put the needs of our children first.
Sincerely,
BILL CLINTON
BC/RSM/DWB/ech-lynn
(Corres. #3106124)
(8.macvicar.f)
CC: Lyn Hagan, 217R OEOB, DPC, w/attachments and incoming
Withdrawal/Redaction Marker
Clinton Library
DOCUMENT NO.
SUBJECT/TITLE
DATE
RESTRICTION
AND TYPE
001b. letter
From Frederick H Mac Vicar To President Bill Clinton; RE:
08/05/1996
P6/b(6)
address/phone/fax number [partial] (1 page)
COLLECTION:
Clinton Presidential Records
Policy Development
Lyn Hogan
OA/Box Number: 10043
FOLDER TITLE:
Child Wel [Welfare]---Long-Term [1]
2011-1010-S
ms196
RESTRICTION CODES
Presidential Records Act - [44 U.S.C. 2204(a)]
Freedom of Information Act - 15 U.S.C. 552(b)]
P1 National Security Classified Information [(a)(1) of the PRAJ
b(1) National security classified information |(b)(1) of the FOIA]
P2 Relating to the appointment to Federal office [(a)(2) of the PRAJ
b(2) Release would disclose internal personnel rules and practices of
P3 Release would violate a Federal statute |(a)(3) of the PRAJ
an agency [(b)(2) of the FOIA]
P4 Release would disclose trade secrets or confidential commercial or
b(3) Release would violate a Federal statute [(b)(3) of the FOIA]
financial information |(a)(4) of the PRA]
b(4) Release would disclose trade secrets or confidential or financial
P5 Release would disclose confidential advice between the President
information |(b)(4) of the FOIA]
and his advisors, or between such advisors [a)(5) of the PRAJ
b(6) Release would constitute a clearly unwarranted invasion of
P6 Release would constitute a clearly unwarranted invasion of
personal privacy [(b)(6) of the FOIA]
personal privacy [(a)(6) of the PRA]
b(7) Release would disclose information compiled for law enforcement
purposes [(b)(7) of the FOIA]
C. Closed in accordance with restrictions contained in donor's deed
b(8) Release would disclose information concerning the regulation of
of gift.
financial institutions |(b)(8) of the FOIAJ
PRM. Personal record misfile defined in accordance with 44 U.S.C.
b(9) Release would disclose geological or geophysical information
2201(3).
concerning wells |(b)(9) of the FOIA]
RR. Document will be reviewed upon request.
"
a bold new initiative for American Youth.'
August 5, 1996
President Bill Clinton
[001b]
Executive Office of The President
1600 Pennsylvania Avenue, NW
Washington, DC 20500
Dear Mr. President:
On the following pages, I have outlined my concept for a positive national program for
American youth.
In my opinion, this concept provides the framework for a need-based program that will
contribute to the well-being of American youth, as well as to every other major segment of
American society.
This is an innovative concept for a far-reaching, positive social program that should
immediately garner universal and enthusiastic public support.
Obviously, this concept will need expert input in several of its major elements, such as
educational materials, organizational structure, judging, etc. However, the concept is
simple, direct and positive.
The need for this program is obvious and the timing for you and your administration is
perfect. I think you'll see its vast potential and hopefully, place it high on your list of
priorities for positive action.
While recuperating from surgery, I've devoted the past three months to this concept.
Obviously, I'm convinced that it can become one of the strongest, most positive social
programs in American history.
Mr. President, you have the charismatic leadership and the dedication this program will
need to be successful. I am looking forward to hearing your opinion. As I see it, this can
be your "bold new initiative for American Youth" and for all of American Society.
Fred MacVicar Sincerely yours,
Frederick H. MacVicar
cc: Vice President Gore; Mr. Philip Lader; Mr. Peter Knight; Mr. Charles Corbett;
The MacVicar Children and Grandchildren.
P6/(b)(6)
Fred & Mary Jane MacVicar.
P6/(b)(6)
CONCEPT
THE NATIONAL ENDOWMENT FOR AMERICAN YOUTH
"...a bold new initiative for American Youth."
Frederick H. MacVicar
August 5, 1996
"
a bold new initiative for American Youth.
TABLE OF CONTENTS
Summary of the Concept
1
Eligibility Requirements
2
Savings and Investment Earnings Schedule
3
Bonus Point Flexibility
4
Major Benefits to American Youth
5
Major Benefits to American Society
6
Anticipated Widespread Enthusiastic Support
7
Judging, Scoring, Rules and Penalties
8
Hypothetical Cost/Benefit Analysis
9
Management and Organizational Structure
10
A Telltale Quiz
11
Biographical Data
12
"
a bold new initiative for American Youth.
SUMMARY OF THE CONCEPT
The Concept of The National Endowment for American Youth is multi-faceted, objective
and innovative, as briefly described below:
1. Every American youth between the ages of 12 and 21 is eligible to participate as long
as he or she meets the eligibility requirements. Page 2.
2. Each participant can earn up to 1000 Savings and/or Investment Points annually, each
point equal to $1.00 in cash.
3. To earn points, the participant must perform a service without compensation which in
some way will contribute to Quality of Life in America.
4. The calendar year will be divided into two six-month service periods -- January through
June and July through December. The participant can earn up to 500 points in each
service period by performing at least one and up to three Quality of Life services.
5. Service recipients and the parent or guardian will attest to the validity of the
participant service report. The school will attest to the educational requirements,
police to deportment.
6. Participant's point earnings must be allocated to Savings and/or Investments in fixed
ratios, as in the tentative Earnings Schedule. Page 3.
7. Participants must deposit in savings or invest all points earned within 90 days of
completion of each 6-month service period.
8. Upon high school graduation, participant can elect to use any or all of his or her
savings or investment assets to pay for further education, payable directly to the
educational institution or training facility.
9. To continue participation after high school, the participant must be enrolled in a full-
time or part-time educational program or in vocational training at an accredited
institution.
10. At age 21, all savings and investment assets become the sole property of the participant
and the Endowment has no further ownership or lien.
Page I
"
a bold new initiative for American Youth.
ELIGIBILITY REQUIREMENTS
1. American Citizen between the ages of 12 and 21.
2. Student in school, college or vocational training.
3. Maintaining satisfactory grades and attendance.
4. No known involvement in crime, drugs or violence.
5. Registered to vote at Age 18.
6. Performing Quality of Life service without pay.
DEFINITION OF QUALITY OF LIFE SERVICE
This term is used in lieu of "Community Service" in the belief that Community Service is
viewed by many youngsters as being demeaning and/or a form of mild punishment, such as
that given to Dallas Cowboy Irwin in lieu of imprisonment he "richly" deserved.
Also, Quality of Life Service is all-encompassing and more accurately describes the intent
and nature of the selfless type of work we want participants to perform.
Quality of Life Service would include any service, large or small, which would contribute
in any way to a high standard of Quality of Life in America, such as 1) environmental
protection; 2) aid to the needy; 3) child safety; 4) aid to the elderly; 5) wildlife
preservation; 6) recycling; 7) interracial relations; 8) mental or physical health; 9) anti-
littering; 10) shelter for the homeless; 11) volunteer work for any charitable organization;
12) any other such service.
Every government agency, every community organization and every charitable organization
combined could be asked to compile a list of such services, existing or needed, to guide
participants to hundreds of service opportunities available to any participant of any age.
I predict that many of these youngsters will discover Quality of Life needs and
opportunities that we don't even know exist. Young minds are perceptive, fresh and
imaginative. They're not yet cluttered with the negatives which invade us with age and
experience.
Page 2
a bold new initiative for American Youth.
SAVINGS AND INVESTMENT EARNINGS SCHEDULE
Every participant can earn up to 1000 Investment Points per year -- up to 500 Points per
semi-annual Service Period -- which must be allocated to Education, Savings and/or
Investments in the fixed ratios set forth in the following schedule:
1. Ages 12 and 13:
100% of earnings must be deposited in a Savings Account.
2. Ages 14 and 15:
50% of earnings in Savings and 50% in Investments.
3. Ages 16, 17 and 18:
25% of earnings in Savings and 75% in Investments.
4. Ages 19 and 20:
Any percentage in Savings, Investments or both.
5. High School Graduates:
Upon high school graduation, participant may convert any or all of his or her savings
and/or investments into cash payable directly to any college or accredited training
institution for post-high school education.
6. Age 21:
This program ends on the participant's 21st birthday, whereupon all Savings and/or
Investment Assets become the sole property of the participant with no further obligation to
the Endowment.
SAVINGS VERSUS INVESTMENTS
Savings must be deposited in an FDIC insured Savings Account. Investments are limited
to publicly traded American stocks, bonds and/or mutual funds listed on the major
American Exchanges, such as AMEX, NYSE and NASDAQ, etc.
Page 3
"
a bold new initiative for American Youth.
BONUS POINT FLEXIBILITY
1. Federal Government:
Any Federal Government Department or Agency could offer Bonus Points for any six-
month Service Period for any Quality of Life Service where concentrated effort might be
desirable.
For Example: The Department of Transportation could offer participants 100 bonus points
for any Service which would contribute to highway safety.
For Example: The Forest Service could offer participants 100 bonus points for any Service
which would help prevent forest fires.
2. State, County and Municipal Governments:
State, County and Municipal Governments could offer Bonus Points for resident
participants during any given Service Period for Quality of Life Service in priority
categories:
For Example: The State of South Carolina could offer a Bonus of 100 Points for Service
by resident participants contributing to the reduction of the school dropout rate.
For Example: Beaufort County could offer 100 Bonus Points for any Quality of Life
Service which would promote the conservation of fresh water during a period of drought.
For Example: The Town of Hilton Head Island could offer 100 Bonus Points to resident
participants who perform services contributing to the preservation of Island dunes.
Such Bonus Points could be extremely beneficial to focus resident participant efforts on
areas of particular need or concern in particular years or at particular times of the year.
State, County and Municipal Governments could even suggest specific services which
would be of value.
Every Bonus Point plan would be subject to the approval of the National Endowment to
ensure adherence to national standards, fairness of judging, Quality of Life value, etc.
Page 4
"
a bold new initiative for American Youth.
MAJOR BENEFITS TO AMERICAN YOUTH
The National Endowment For American Youth will provide numerous important benefits
to participating youngsters, including (but not limited to) the following:
1. The Responsibilities of American Citizenship:
Participants will necessarily be law abiding citizens, rejecting drugs and violence in order to
participate. They will have a constant tangible reminder that their good deportment is both
necessary and advantageous.
2. The Importance of Education:
To become and remain eligible, participants must attend school and maintain satisfactory
grades, attendance and deportment. Furthermore, in order to maximize their earnings
through the Endowment, they must continue their educations and/or training beyond high
school graduation.
3. Training and Experience in Money Management:
While pursuing a formal education and/or training each participant will necessarily learn the
value of Saving, Investing and sound Money Management. They will discover and
experience for themselves the basics and principles of wise financial risk-taking in a realistic
environment.
4. Structure and Value of the Free Enterprise System:
Participants will necessarily become personally involved in our unique American System of
Free Enterprise through ownership of shares of stock in American corporations. They will
gain new respect for business, the economy and the necessity of education and training
beyond high school.
5. Exposure to Complexities of American Quality of Life:
Through uncompensated service to their communities and to American society as a whole,
participants will gain a new respect for the vast scope and importance of the variety of
social needs and services which contribute to overall Quality of Life Values in America.
Predictably, many of these youngsters will adopt favorite causes, acquire the habit of
community service and continue to serve for the rest of their lives. Furthermore, the values
they will inevitably acquire will provide the foundation for the family values they will instill
in their children for future generations.
Page 5
a bold new initiative for American Youth.
MAJOR BENEFITS TO AMERICAN SOCIETY
If American Society enthusiastically endorses, supports and participates in this self-
perpetuating youth program, and we will, the benefits are enormous. These are a few:
1. Fewer Drop-outs, Less Juvenile Crime, Drugs, Violence:
The current trends underline the need for the strengthening of our values among Youth,
not only family values but basic American values which provide the foundation for our
entire Society and Quality of Life. All of America will benefit from this major national
youth initiative for decades to come. We can't change family values in time to help today's
youngsters, but we can instill values that will overcome some of their present
circumstances and supplant existing values with better alternatives and better opportunities.
2. Every Segment of American Society will Gain Perspective:
Involvement in this program, even if peripheral, will almost inevitably re-focus all
Americans on the real needs, values, delicate balances and responsibilities inherent in our
real Quality of Life. Adults will become volunteers. Parents will become involved in their
children's projects. Seniors will mentor, judge and score and gain a new understanding of
modern American Youth. Siblings and peers will join in project discussions and investment
decisions. Communities will re-focus on Youth as a vast and powerful asset to be
nourished, encouraged and protected. Business and industry get a new perspective on the
importance of youth. Millions of hitherto untapped man hours will become available to
non-profits, struggling charities and dozens of worthy causes.
3. The American Economy will Prosper and Grow:
Billions of new investment dollars will become available to American Business and industry
for capitalization, growth and progress. Millions of new jobs will emerge. Millions of
better educated, better informed and better trained men and women will become available
as managers and workers. More reliable, more responsible, more productive and more
cognizant employees with broader perspectives and stronger commitments to the Free
Enterprise System and our Quality of Life, both personal and vocational. And new strata
of better educated, more informed and more affluent consumers will emerge year after
year, demanding new and improved Quality of Life commitment, awareness, products and
services.
Page 6
"
a bold new initiative for American Youth.
ANTICIPATED WIDESPREAD ENTHUSIASTIC SUPPORT
With the exception of organized crime, drug dealers, gang leaders, fanatics and terrorists, it
would be difficult to identify any major segment of American Society opposed to the
concept of The National Endowment for American Youth. I believe you can expect
support from all of the following:
1. Parents, grandparents, foster parents and guardians.
2. School Boards, educators and PTA's
3. Colleges, Universities and Vocational Schools.
4. Democrats, Republicans and Independents.
5. The Far Right, The Far Left and the Ambidextrous.
6. Law Enforcement, EMS and Fire Fighters.
7. Religious leaders and the religious community.
8. All age groups, all ethnic groups and all races.
9. Wall Street, the Chamber of Commerce and Economists.
10. State, County and Municipal Governments.
11. Non-profit Organizations and Youth Organizations.
12. The entire Medical community.
13. National Business and Industry Associations.
14. Business and Industry, Management and Labor.
15. Politicians, Child Psychologists and Social Workers.
16. Environmentalists, the NRA and Community Leaders.
17. The Pundits, the Congress, the Senate and the Press.
18. The wealthy, the poor and everyone in between.
19. Our Allies and international Workers for Democracy.
20. Above all, The Youth of America.
OUR CHILDREN WILL ALWAYS BE OUR HIGHEST AMERICAN PRIORITY
Page 7
"
a bold new initiative for American Youth."
JUDGING, SCORING, RULES AND PENALTIES
This is one of the most important elements of the Program and one which deserves further
study and input from your experts. However, this is how I envisage the procedures:
1. Judging:
Through Social Security, AARP and other reliable sources, recruit 75,000 Senior Citizens
between the ages of 50 and 75 with a minimum education of high school graduation. Each
would judge and score up to 1000 Service Reports semi-annually, requiring approximately
5 minutes per report or a total of about 40 man hours -- 80 hours per year. These are our
modern-day "village elders" and I believe they'd welcome and thoroughly enjoy their
participation in this program.
2. Scoring:
Participant Service Reports would be scored on a curve, not only measuring the
participant's performance in comparison with other participants, but factoring in both age
and type of residential community (city, suburb, town, village, rural) or foreign residency.
Scoring would begin with 250 points, awarded for any meaningful participation, and range
upward to a maximum of 500 points per Service Period in increments of 25. The average
score nationwide should be about 375 per six-month Service Period or 750 Investment
Points annually. Three judges would independently score each Report and the participant
would be awarded the highest score of the three. Our goal is to attain maximum
participation, motivation and satisfaction, encouraging more service and higher earnings.
3. Rules:
The basic rules are spelled out on the preceding pages and should not be inundated with
legalese nor bureaucratic red tape. Parents, guardians, teachers and the recipients of the
participant's service should sign off on the validity of the report and the eligibility of the
participant. Reports can be "spot-checked" and Judges can "flag" suspicious reports.
4. Penalties:
The only penalties I envisage would be (1) the loss of all Investment Points for any six-
month Service Period during which the participant failed to maintain eligibility because of
unsatisfactory grades or attendance, etc., or (2) the loss of all prior earnings if the
participant drops out of school, commits a crime or "cheats" on the Service Report,
whereupon all accrued assets would become the property of the Endowment.
Page 8
"
a bold new initiative for American Youth.
HYPOTHETICAL COST/BENEFIT ANALYSIS
While the numbers and percentages are based on my guestimates, they should serve to
illustrate and analysis of cost versus measurable benefits. Again, your experts should have
these numbers and percentages at their beck and call.
1. Cost of Savings and Investment Points Awarded Annually:
Assuming a total universe of 30 Million eligible youngsters between the ages of 12 and 21
and a participation factor of 75%, approximately 22.5 Million youngsters would be
awarded Investment Points.
Assuming the average Investment Point score will be 750 Points, the annual gross would
be 16.9 Billion dollars. Adding a few dollars for administration, etc., under this scenario
the cost of The National Endowment for American Youth would be about:
$17 Billion Annually
2. Projected Reduction in the Annual Cost of Other Programs:
A 50% reduction in the cost of juvenile crime:
A 50% reduction in the cost of drug treatment:
A 50% reduction in the cost of social services:
A 50% reduction in the cost of juvenile violence:
A 50% reduction in the cost of unemployment insurance:
A 50% reduction in the cost of emergency medical services:
A 50% reduction in the cost of welfare payments
A 50% reduction in the cost of juvenile incarceration:
A 50% reduction in the cost of personal bankruptcies:
Whether the percentages of various cost reductions are 50%, 25% or 10%, they will
be significant and offset much of the annual cost of the Endowment. The balance of
the cost is more than justified by millions of new man hours in Quality of Live
service to American Society. The benefits far out-weigh the cost of The National
Endowment for American Youth.
Page 9
a bold new initiative for American Youth.'
MANAGEMENT AND ORGANIZATIONAL STRUCTURE
1. Management:
To give the Endowment stature and impetus, I would like to see it launched under the
leadership of Vice President Gore.
Although I have never met your SBA Administrator, Mr. Lader, his name and fine
reputation are well known on Hilton Head Island. He would seem to me to be the ideal
person to serve as CEO of the Endowment, especially in its formative stages. He is a
proven Administrator, a man of vision who conceived The Renaissance Weekend, and he's
experienced in business, academic and government administration. Let's hire him.
There are many capable people in government who would welcome the opportunity to be
part of this new initiative, especially in an era of elimination and/or reduction of old,
outmoded government programs. If necessary, they can be supported by specialists
recruited from the private sector.
2. Organizational Structure:
Much of the needed organizational structure already exists in various departments,
agencies and services, such as in the SEC, Education, Commerce, Social Security,
Agriculture and Justice. These elements could be transferred to the Endowment or given
specific tasks to perform for the Endowment.
Obviously, the large numbers of participants and judges who would be involved, as well as
the volume of detail generated by the various elements of the program, would require a
large-scale state-of-the-art computer system which would acquire, organize, analyze and
disseminate the various data.
A large volume of printed and audio visual material would be necessary to educate and
train participants, volunteer judges, the many participating entities such as educators,
community leaders, parents, the financial community and numerous others. Recruiting,
informing and enthusing the many publics involved would be an essential major segment of
the Foundation effort.
The right people can get the Endowment up and running by July 1, 1997, in time for the
second six-month Service Period of the year. By the year 2000, the program should be
proven, fully refined and be a bright new chapter in American history.
Page 10
A TELLTALE QUIZ
1. Can this positive social program lead to better values, better opportunities and
better lifestyles for American kids?
Yes
No
Undecided
2. Will this program motivate American youth to attend school and pursue post-
high school education and training?
Yes
No
Undecided
3. Will this program focus public attention on the "good" boys and girls and shift
focus away from the "bad"?
Yes
No
Undecided
4. Could this be the most meaningful, far-reaching and effective self-help program
ever created for American youth?
Yes
No
Undecided
5. Will parents and grandparents, rich and poor, young and old, enthusiastically
support this program?
Yes
No
Undecided
6. Might Bob Dole or Ross Perot oppose this program and by so doing, be
viewed as mean-spirited old codgers?
Yes
No
Undecided
7. Could this program become one of the most popular and long-lived
government programs in modern American history?
Yes
No
Undecided
8. Will this program garner votes for sponsors and put a positive spin on their
political campaigns?
Yes
No
Undecided
9. Is the timing right in terms of public opinion, the strength of the economy, the
problems of youth and political realities?
Yes
No
Undecided
10. Does this program stand alone as the only positive program for American
Youth on the political horizon today?
Yes
No
Undecided
Page 11
BIOGRAPHICAL DATA
Frederick H. MacVicar
Age 67.
Married.
Four Children.
Five Grandchildren.
Born in Canada of American parentage, enlisted in the United States Army in 1948
at Age 19. Commissioned in 1950. Served five years on active duty with primary
assignments as Infantry Rifle Company Commander and Infantry Battalion
Intelligence Officer. Dual citizenship, the United States and Canada.
Worked in responsible marketing positions for twenty years in New York City,
Georgia and Washington, DC. Employers and clients included Bloomingdales,
Sears Roebuck, W.R. Grace, The Georgia Department of Industry & Trade,
Southern Airways, United States Peace Corps, Newhouse Newspapers, Callaway
Mills, Columbia Nitrogen, The American Advertising Federation and The
Smithsonian Institution.
Management responsibilities included every segment of marketing and public
relations, including Sales Manager, Advertising and Public Relations Director,
Director of Marketing Research, Creative Director, Marketing Director and
Business Manager.
Advanced Seminar, Marketing Management, Harvard Business School.
Past Governor, 7th " Deep South" District, American Advertising Federation;
Honorary Lifetime Member, Atlanta and Augusta GA Advertising Clubs; Gold
Medal Award, American Advertising Academy; Co-founder, Student Advertising
Campaign Competition; Author "Careers in Advertising", University of Georgia
Press; Co-author, "Crossed Pens", Acropolis Books South. Qualified as Expert
Witness, Marketing and Public Opinion Research, Supreme Court of South
Carolina. Recipient, AAF Silver Medal Award.
Presently Senior Partner in the firm of MacVicar & Earley, Marketing and Public
Opinion Research, Hilton Head Island, SC.
Opinion Researcher, Marketing Strategist, Free-lance Writer.
Page 12
Another Sound Concept: 1966 to 1996
This too was my concept almost exactly thirty years
ago, also designed to satisfy the need for direction,
more practical education and more hands-on
experience for college students. The "captains of
industry" were not very supportive, but we
persevered and saw it into existence. I'm very proud
to see that it has become one of the most valuable
tools in advertising education in colleges and
universities throughout America. It will undoubtedly
grow and flourish for many decades to come. Our
youth bought the Concept and it will be there forever
more. The NEFAY concept will inevitably enjoy the
same success.
Clinton Presidential Records
Digital Records Marker
This is not a presidential record. This is used as an administrative
marker by the William J. Clinton Presidential Library Staff.
This marker identifies the place of a publication.
Publications have not been scanned in their entirety for the purpose
of digitization. To see the full publication please search online or
visit the Clinton Presidential Library's Research Room.
Booklet: " 7th District American Advertising Federation, A History,
1967 Through 1995, 29 pgs.
NSAC
STUDENT ADVERTISING CAMPAIGN
COMPETITION
Districtriet
AMERICAN ADVERTISING FEDERATION
A History
1967
THROUGH
1995
casa®
LEGISLATIVE UPDATE
FEDERAL ACTION RELEVANT TO CASA AND THE CHILDREN WE SERVE
Child Protection Block Grant Included
CASA Funding for 1996 Included in
to reconsider the bill until after Congress
in Welfare Reform Legislation. The
Vetoed Bill - Further Action Stalled By
and the White House reach accord on a
Congressional Welfare Reform package
Budget Impasse. The President vetoed
balanced budget. The Budget Agreement
sent to the President in December would
the appropriations bill for Commerce,
may also impact the level of funding that
also impact federal child abuse preven-
Justice, State and Judiciary in Decem-
the Appropriations Committee recom-
tion and protection programs. While
ber. Included in the appropriations
mends in its revised bill. The Justice
vetoed by the President, welfare reform
measure was $6 million for CASA for FY
Department is unable to award 1996
is also included in the current Budget
96, to continue the grants program to
funding for National CASA and for new
Agreement discussions between Congress
expand CASA/GAL representation, and
CASA program grants until the funding
and the White House. The Welfare
for the provision of training and techni-
is finalized by Congress and approved by
Reform legislation approved by
cal assistance by National CASA. The
the President.
Congress would contain three
Appropriations Committee does not plan
important components with respect to
child abuse and prevention:
1. Elimination of the Child Abuse Preven-
tion and Treatment Act (CAPTA),
Adoption Opportunities Act, and other
federal child and family support programs.
Funding previously available through
these programs would be rolled into a
new "Child and Family Services" block
grant to states.
2. A block grant to states of Title IVB
family preservation funds and Title IVE
funds for administrative costs.
3. Continuation of Title IV foster care and
adoption assistance funding.
In order for a state to receive block grant
funds, Congress eliminated the require-
© Lorraine A. DarConte
ment that a Guardian ad Litem be
appointed in every case alleging child
abuse or neglect; nor would states have to
certify that a system is in place to ensure
cooperation among state agencies in
protecting children. Each state would
design its own system and priorities for
addressing child abuse prevention,
protection, family and child support
needs using the federal block grant funds.
A child's voice in court
"Tom's File
by Moira Walsh
As with many children referred to
often put out of the classroom for
Meanwhile, 1 talked with Tom's
the San Francisco CASA program,
disruptive behavior.
school principal, counselors, and
Tom's' social service case file had
As his CASA volunteer, I read
teachers about his school needs. Tom
grown thick with paper. Each page told
through Tom's thick case file, pieced
was transferred to more appropriate
a story of repeated rejection and
together his sad history, and began inves-
classes and we began working on his
disappointment.
tigating resources. As it turned out, Tom
homework together.
Tom had first become a dependent
had a number of relatives living in the
Tom started weekend visits with his
of the Court when he was only four
Bay Area; uncles, aunts, a grandmother,
aunt and uncle. These went well. After
months old. His mother, then only 16,
eleven months in the group home. the
was using drugs and was incapable
court allowed him to move in with his
of taking care of herself or her baby.
aunt, uncle, and their three sons.
Tom was taken to a shelter and to tem-
Although the move has entailed
porary placements before his father was
many new adjustments another home,
given custody.
new friends, a new school - I believe the
Only nine months later, Tom
consistent presence of one CASA
became a court dependent again when it
volunteer for the past eighteen months
was discovered that his father, also a
has helped Tom cope. I have worked
substance abuser, had been leaving the
hard to try and earn his trust and show
toddler unattended for days at a time.
him I care. If nothing else, Tom needs
For the next two years, Tom lived in
to know that a CASA volunteer will be
a series of shelters, placement with
one adult - perhaps the first in his life -
relatives, and foster homes. Meanwhile,
who will not reject him.
the courts terminated the parental rights
Things seem to be going well for
of both his mother and father.
Tom recently. He has begun to call his
At the age of five, Tom was moved to
cousins - but Tom was most interested in
aunt and uncle mom" and "dad" and
the home of Mr. and Mrs. Jones* who,
hearing about his father. To Tom, it
refers to his cousins as his "brothers."
our years later, became his legal guard-
made no difference that, legally, his
The best news is that the family recently
ans. With this, the courts consider a
father no longer had any parental
initiated proceedings to adopt Tom.
child to be permanently placed, and
rights. He wanted to get in touch with
I am hopeful that Tom has finally
Tom's file was once again removed from
his father; he wanted to live with his
found the permanent home denied him
dependency court jurisdiction.
father again.
for so long. Perhaps an adoption decree
But when he was twelve, Tom ran
I made contact with Tom's father
will become the last paper to go into
away from the Jones' home. Picked up
and coordinated supervised visits with
Tom's case file.
S
*Names of all persons in this article have
been changed to protect their privacy.
Moira Walsh is an attorney with the firm
of Carr, McClellan, Ingersoll. Thompson,
and Horn. She has been a San Francisco
CLINTON LIBRARY PHOTOCOPY
CASA volunteer since March. 1993.
This article first appeared in the newsletter
of San Francisco CASA. Reprinted with
permission.
U.S. DEPARTMENT OF
HEALTH AND HUMAN SERVICES
Washington, D.C.
HUMAN SERVICES. USA
&
HEALTH
OF
DEPARTMENT
THE FISCAL YEAR 1997 BUDGET
The attached document is based on the President's Budget scheduled for delivery to the
Congress on March 19, 1996, and is strictly embargoed until 11:00 a.m. that day.
DEPARTMENT OF HEALTH AND HUMAN SERVICES
FY 1997 BUDGET
TABLE OF CONTENTS
Page
1.
SUMMARY
1
2.
FOOD AND DRUG ADMINISTRATION
14
3.
HEALTH RESOURCES AND SERVICES ADMINISTRATION
18
4.
INDIAN HEALTH SERVICE
23
5.
CENTERS FOR DISEASE CONTROL AND PREVENTION
27
6.
NATIONAL INSTITUTES OF HEALTH
35
7.
SUBSTANCE ABUSE AND MENTAL HEALTH
SERVICES ADMINISTRATION
42
8.
AGENCY FOR HEALTH CARE POLICY AND RESEARCH
46
9.
HEALTH CARE FINANCING ADMINISTRATION
52
-- Medicare
53
--
Medicaid
57
-- Program Management
61
10.
ADMINISTRATION FOR CHILDREN AND FAMILIES
--
Discretionary Program Summary
67
--
Entitlement Program Summary
72
11.
ADMINISTRATION ON AGING
80
12.
DEPARTMENTAL MANAGEMENT
--
General Departmental Management
84
--
Office for Civil Rights
86
--
Policy Research
87
--
U.S. Office of Consumer Affairs
87
13.
OFFICE OF INSPECTOR GENERAL
89
14.
PROGRAM SUPPORT CENTER
92
SUMMARY
DEPARTMENT OF HEALTH AND HUMAN SERVICES
(Dollars in millions)
1995
1996
1997
Request
Actual
Policy*
Request
+/-Policy
Budget Authority/Income
$302,150
$317,258
$354,695
$37,437
Outlays
$303,107
$327,463
$354,126
$26,663
* Based on levels of the ninth CR, including an incremental policy adjustment.
FY 1997 DISTRIBUTION OF OUTLAYS
Discretionary
9%
Other Entitlement
2%
Medicaid
Family Support Pymts
30%
5%
Medicare
54%
1
SUMMARY
CREATING OPPORTUNITIES WHILE ENCOURAGING
RESPONSIBILITY
The FY 1997 Budget proposes a balanced budget by FY 2002 through a combination of
savings, responsible reforms, and good management. In so doing, the budget preserves our
core values of protecting our most vulnerable Americans, especially senior citizens, people
with disabilities, working families and children.
The FY 1997 Budget for the Department of Health and Human Services (HHS), totals
$354 billion in outlays, an increase of $27 billion, or 8 percent, over the comparable
FY 1996 amount. The discretionary portion of the HHS budget totals $34 billion in budget
authority, an increase of 5 percent over the FY 1996 policy level. The FY 1996 policy level
is based on levels of the ninth continuing resolution, including an incremental policy
adjustment.
HHS is a major part of the President's effort to realize a seven-year balanced budget through
the combination of welfare reform and revision of the Medicare and Medicaid programs.
Reform of these entitlement programs is a substantial part of the savings in the President's
plan.
The President's Medicare plan strengthens and improves the program, reducing spending by
a net $124 billion over seven years and guaranteeing the solvency of the hospital insurance
trust fund for more than a decade. Specific reforms give seniors more choices among
private health plans, make Medicare more efficient and responsive to beneficiary needs,
attack fraud and abuse through programs praised by law enforcement officials, cut the growth
rate of provider payments, and hold the Part B premium at 25 percent of program costs.
Comprehensive welfare reform is a key component of our effort to promote self-reliant and
stable families. The President has been working to make welfare a second chance rather
than a way of life and is committed to signing a welfare bill that succeeds in moving people
from welfare to work. Real welfare reform must emphasize work, responsibility, and
family--imposing time limits, tough work requirements, and high standards upon parents to
take responsibility for themselves and their children. Children should be protected and
families must get the child care they need to go to work.
The President's FY 1997 Budget includes a major proposal to replace the Aid to Families
with Dependent Children program with a time-limited conditional entitlement. This proposal
would also increase funding for child care programs and improve child support enforcement
measures. The Administration supports rewarding States while holding them accountable for
their efforts to put people to work, not for simply cutting families off of welfare assistance.
States would have the flexibility to design welfare programs which would meet the needs of
their communities. This plan would save a projected $40 billion over seven years. With the
2
support of Congress, we will enact changes to encourage parental responsibility, promote
economic security, and protect families.
In addition to these reforms, HHS remains committed to a path of tough management and
strategic investment in priority areas. The FY 1997 HHS Budget continues to promote
health and science by increasing funding in key areas such as the National Institutes of
Health, Ryan White AIDS Treatment grants, substance abuse and mental health treatment,
and heightening our vigilance against emerging infectious diseases. The FY 1997 Budget
also invests in Head Start, the Child Care and Development Block Grant, and a new Teen
Pregnancy Prevention initiative.
STRENGTHENING MEDICARE AND MEDICAID
Medicare Improvements that Expand Choices and Add Preventive Benefits
The President's plan for improving choice in Medicare refines and enhances standards,
increases the options available to Medicare beneficiaries, and expands the types of
organizations offering Medicare products. It will improve Medicare's health plan payment
coverage, foster continuous improvements in health plan quality, help beneficiaries become
more informed about their choices, and level the playing field for Medicare managed care
and Medicare supplemental coverage. Other changes begin the transformation of the
traditional fee-for-service program from a bill-paying insurance program into a responsive
health plan by giving Medicare authority to adopt many of the purchasing and quality
techniques pioneered by private sector payors.
The budget also expands and improves Medicare managed care by:
ensuring beneficiary protections while increasing the types of plans--including Preferred
Provider Organizations (PPOs) and Provider Sponsored Networks (PSNs)--available to
seniors; and
instituting a coordinated open enrollment process--similar to that used by the Federal
Employees Health Benefits Plan (FEHBP)--during which beneficiaries use comparative
information to choose among managed care and supplemental insurance options.
In addition, the budget expands coverage of preventive benefits to include annual
mammograms and the elimination of mammography coinsurance, colorectal cancer screening,
and increased payments for flu shots. Finally, the budget introduces a respite care benefit to
provide some relief for families caring for relatives with Alzheimer's disease.
Survey and Certification
Ensuring the safety and quality of care provided by health facilities is one of HHS' most
critical responsibilities. HHS contracts with State agencies to inspect health facilities
providing services to Medicare and Medicaid beneficiaries to ensure compliance with Federal
3
health, safety, and program standards. Quality oversight efforts include initial inspections of
providers who request participation in the Medicare program, annual recertification
inspections of nursing homes and home health agencies (HHAs) as required by law,
investigation into all long-term care facility complaints, and periodic recertification of other
health care providers and suppliers.
In FY 1997, we are requesting a total of $173.8 million for direct survey and certification
activities and workloads. We expect to survey more than 31,000 facilities in FY 1997. This
$28 million increase over the FY 1996 policy level is necessary both to conduct initial
inspections of more than 3,200 facilities expected to request Medicare participation (including
the elimination of any prior year backlog), and to increase the frequency of annual surveys
performed on non-long-term care facilities (e.g., End Stage Renal Disease facilities,
hospices, rural health clinics). Congress did not fund the full FY 1996 President's request of
$162.1 million for this activity, appropriating $145.8 million instead.
Medicaid Reform that Guarantees Coverage and Promotes State Flexibility
The Administration is committed to Medicaid reform guided by the following principles:
preserve the guarantee of coverage with meaningful benefits for the most vulnerable
Americans;
maintain a strong Federal/State partnership;
enhance State flexibility while ensuring protection for beneficiaries and accountability to
taxpayers.
The President's plan for Medicaid reforms the program and preserves the guarantee of health
and long-term care coverage for the most vulnerable Americans. It saves $59 billion over
seven years responsibly, by limiting spending on a per-person basis (a "per capita cap") and
reducing Disproportionate Share Hospital payments and retargeting them to hospitals that
serve large numbers of Medicaid and uninsured patients.
The plan provides special payments for States to transition into the new system, and to meet
the most pressing needs. It also gives States unprecedented new flexibility to administer their
programs more efficiently. Finally, this plan retains current nursing home quality standards
and continues to protect the spouses and other family members of nursing home residents
from impoverishment.
Maintaining and Expanding Coverage for Working Americans
The Administration's FY 1997 Budget contains several provisions to make health coverage
more accessible and affordable for working Americans.
4
The President's insurance market reforms will enable more Americans to maintain health
insurance coverage when they change jobs and will stop insurance companies from
denying coverage for pre-existing conditions.
To put the self-employed on a more equal footing with other businesses, the reforms
gradually raise the self-employed tax deduction from 30 percent to 50 percent.
To give small businesses the purchasing clout that larger businesses have, the budget
proposes $25 million a year in grants that States can use for technical assistance and for
setting up voluntary purchasing cooperatives.
The President also proposes a four-year demonstration program to provide annual grants
to States to provide health insurance for temporarily unemployed workers and their
families. Under the program, States could provide up to six months of coverage for
eligible workers and their families.
RESTORING TRUST AND UTILIZING INNOVATIVE APPROACHES
TO MANAGEMENT
Program Integrity
As responsible managers of the public's money, the Secretary has made the integrity of
Medicare and Medicaid a primary objective for the department. In FY 1997, the Federal
Government will spend nearly $316 billion to purchase health care services for 72 million
low-income, elderly, and disabled persons through these programs. Unfortunately, the large
sums of money in Medicare and Medicaid have made them prime targets for those who
would steal, take advantage of loopholes, and otherwise mismanage program funds.
Increasingly sophisticated schemes are siphoning taxpayer dollars and robbing beneficiaries
of their health care security. Responding to this epidemic, the HHS Inspector General (IG),
together with the Health Care Financing Administration (HCFA), and the Administration on
Aging (AoA) launched a major effort in FY 1995 to attack fraud and abuse in Medicare and
Medicaid. Entering into a partnership with State Medicaid Fraud Control Units (MFCU),
the Department of Justice, the Federal Bureau of Investigation and other State and local law
enforcement officials, HHS initiated a five-state anti-fraud and abuse demonstration as part of
the Vice President's Reinventing Government, Phase II. This two-year demonstration,
"Operation Restore Trust," is currently operating in New York, Illinois, Florida, Texas, and
California and focuses on curbing fraud, waste and abuse in providing three of the fastest
growing Medicare services: nursing facilities, home health, and durable medical equipment.
In FY 1997, we are seeking permanent legislation to expand Operation Restore Trust to all
States and Medicare services. We will continue to work with MFCUs and law enforcement
agencies to ensure that claims are properly paid in both Medicare and Medicaid. To achieve
our objectives, two new HHS programs, along with new initiatives in the Department of
Justice, designed specifically to fight health care fraud and abuse are proposed: the
Medicare Anti-fraud and Abuse Program (MAAP) in the Office of the HHS Inspector
General and the Medicare Benefit Integrity System (MBIS) in the Health Care Financing
5
Administration. These new mandatory programs will provide secure and dependable funding
for anti-fraud and abuse efforts.
We are proposing $97 million for MAAP in FY 1997, an increase of $54 million over
FY 1996 estimated Medicare-related IG spending. MAAP will expand current efforts in the
HHS Office of Inspector General (IG) to identify and investigate cases of fraud and abuse in
Medicare. Working closely with the FBI and the Department of Justice, the IG will help to
ensure that program defrauders are brought to trial. As a result of the intensified efforts, the
IG will identify problems and recommend corrective actions that may be taken by HCFA,
State Medicaid agencies and Medicare contractors.
MBIS is proposed to be funded at $500 million in FY 1997, an increase of $104 million over
current spending levels. This program will replace current Medicare payment safeguards
activity. MBIS will emphasize front-end review of Medicare claims to ensure
appropriateness of care, to determine if other parties are liable for payment, and that claims
are paid right the first time. With MBIS, we will redesign and upgrade program operations
and data systems to close the door on defrauders and abusers before they can take advantage
of the program and its beneficiaries.
Right-Sizing the HHS Workforce
Through its Reinventing Government initiative, this Administration is creating a government
that works better and costs less. As part of this effort, we are rethinking our business at
HHS, making sure that our programs work well and achieve their intended results.
We have committed ourselves to a seven-year right-sizing effort which will reduce the
department's personnel by 7,000 FTE by the year 2000, bringing HHS in line with the
President's plan to shrink the size of government. Using a combination of early-outs,
selective hiring freezes and buy-outs, we reduced HHS staffing by nearly 3,300 FTE, or
5 percent, between FY 1994 and FY 1995, making a substantial down payment on our plan
to right-size HHS. Staffing levels will remain at FY 1995 levels through both FY 1996 and
FY 1997, and then decline by 2,500 FTE in the following three years.
Innovative Approaches to Management
In March 1995, the Social Security Administration (SSA) became an independent agency with
approximately 50 percent of HHS staff transferring to this new independent agency. This
transition was handled smoothly and in a timely manner with minimal personnel disruption.
The end-product was two viable organizations. This was accomplished through the use of
careful planning and is a significant accomplishment by HHS and SSA.
Pursuant to the Vice President's Reinventing Government program, we closely examined and
made changes to the remaining organizations within HHS. An entire management layer was
eliminated by consolidating the Office of the Assistant Secretary for Health (OASH) into
Departmental Management (DM). This consolidation creates a unified corporate
6
headquarters for the Department that brings expertise in public health and science closer to
the Secretary.
This merger and reconfiguration creates a new role for the Assistant Secretary for Health
(ASH) who becomes the head of the Office of Public Health and Science (OPHS). The ASH
will act as senior advisor for public health and science to the Secretary and provide senior
professional leadership in the Department on population-based public health and clinical
preventive services. The ASH also directs program offices within the OPHS; provides
professional leadership on cross-cutting Departmental public health and science initiatives;
and at the direction of the Secretary provides assistance in managing the implementation of
Secretarial decisions for the PHS operating divisions. All Public Health Service Operating
Divisions (OPDIVs) now report directly to the Secretary. The OPDIVs, along with the new
OPHS and the Regional Health Administrators, continue to constitute the U.S. Public Health
Service, with the Secretary at its head.
We have also merged the operations of the Assistant Secretary for Management and Budget
with the Assistant Secretary for Personnel Management. The final result of these
reorganizations is a smaller, more focused Office of the Secretary.
Finally, in the wake of SSA's departure and the DM/OASH merger, the Program Support
Center (PSC) was created in FY 1996 as a new self-supporting operating division whose sole
purpose is the provision of a broad range of administrative services. As the first true
business enterprise at HHS, the PSC will provide services on a competitive, fee-for-service
basis to customers throughout HHS and to other Federal agencies. This market based
approach provides incentives for customers to reduce their costs by decreasing demands for
service, and for providers to reduce their costs to remain competitive. The goal of the PSC
is to further streamline and minimize duplication of functions in the provision of cost-
effective services.
The financing for the PSC has also been streamlined. All activities of the OS Working
Capital Fund will be merged into the Service and Supply Fund (SSF) in FY 1997. A new
SSF charter has been approved, establishing a new Board of Directors chaired by the Deputy
Secretary, with the Assistant Secretary for Management and Budget as the vice-chair. This
governing body, designed to provide customer involvement on cost and service levels,
includes representatives from each HHS Operating Division, the chief management officers
of the PSC, and the Inspector General's Office.
BUILDING STRONG FOUNDATIONS AND SAFE PASSAGES
Today's young people are tomorrow's leaders. They will guide our democracy in the
21st century and, therefore, must be prepared to accept the challenges they will face. In
order to ensure a positive future for our Nation's children, we need to work together to
promote their healthy growth and development and to create safe, stable families in
economically secure communities. The Department is committed to this goal and has
developed a multifaceted strategy to promote strong futures for all children and youth. This
strategy includes investing in Strong Foundations--the building blocks of success for children
7
and families, and Safe Passages--the tools for navigating the often turbulent journey from
childhood to adulthood.
Head Start
A child's physical and mental well-being is dependent upon a strong foundation. Head Start
programs help to establish that foundation for many disadvantaged children and families by
providing comprehensive education, nutrition, health services and social services. In
FY 1997, we are committed to expanding enrollment and making that opportunity available
to more children. A budget increase of $350 million over the FY 1996 policy level will
allow us to serve an additional 40,000 children. As part of this increase, an additional
1,200 infants and toddlers will be able to participate in the Department's Early Head Start
program. This request will also allow us to continue making important quality improvements
to local Head Start programs to ensure that children and families receive the highest quality
services possible. Head Start is just one of the many programs funded by HHS which builds
strong foundations, laying the groundwork for the critical journey through adolescence.
Child Care and Development Block Grant/Child Welfare
The availability of quality child care for low-income families is critical to maintain economic
self-sufficiency and to promote healthy child development. The FY 1997 Budget request for
the Child Care and Development Block Grant (CCDBG) is $1.049 billion. Over
750,000 children currently receive services. CCDBG also supports activities to improve the
quality and availability of child care across the nation.
In addition, in FY 1997, the budget includes $419 million in discretionary funding for a
range of programs that help States and local communities to protect children by strengthening
families and preventing abuse; intervening when families are in crisis; and when necessary,
making placement decisions to ensure children's safety. In 1993, States received reports on
nearly three million children who were alleged victims of child abuse and neglect, reflecting
a 25 percent increase in the rate of children reported since 1988.
Teen Pregnancy Prevention
Teen pregnancy is a serious social problem for our Nation. Not only do we spend scarce
health and welfare dollars to assist families begun by teenagers, but our Nation also suffers
as we fail to realize the full potential of many of these teens and their children. In an effort
to address this problem, the Department will launch a $30 million Teen Pregnancy
Prevention Initiative in FY 1997. These funds will be used to implement and evaluate
promising prevention strategies in communities which have demonstrated a commitment to
community problem solving. This initiative is an important step forward to ensure safe
passages for our Nation's adolescents.
8
PROMOTING HEALTH AND SCIENCE
National Institutes of Health - Biomedical/Behavioral Research
The FY 1997 Budget continues the Administration's high-priority investment in biomedical
and behavioral research to secure the long-term health of Americans. The proposed
$12.4 billion for NIH is a $467 million, or 4 percent, increase over FY 1996. NIH is
devoted to expanding fundamental knowledge about living systems and the causes of disease,
and to applying that knowledge to improve the health of human beings. Chief among NIH's
mechanisms to accomplish this are investigator-initiated research project grants which receive
an increase of $166 million and fund 6,827 new and competing research grants and a record
25,400 total grants in FY 1997.
The other prominent part of the FY 1997 Budget request for NIH is the revitalization of the
operations and facilities of the Warren G. Magnuson Clinical Center. The request includes a
total of $310 million to build a new state-of-the-art Clinical Center with replacement hospital
and laboratories for the more than 40-year-old Clinical Center on the NIH campus.
Furthermore, the FY 1997 Budget requests all of NIH's AIDS-related funds--$1.4 billion--in
a single consolidated account for the Office of AIDS Research to ensure a coordinated and
flexible response to the AIDS epidemic.
Ryan White
The FY 1997 request of $807 million for the Health Resources and Services Administration's
Ryan White AIDS treatment activities, a $32 million increase over the FY 1996 policy level,
continues our commitment to improve the quality and availability of care for individuals and
families with HIV and AIDS. Funds will be used to expand activities in all four program
areas including Emergency Relief for Cities, improve services for underserved and hard to
reach populations, and support primary care services for an additional five to ten thousand
individuals who are infected with, or at-risk of, HIV infection. The Administration is also
proposing a $52 million budget amendment in FY 1996 to help states improve access to new
promising HIV therapies, including protease inhibitors, a new class of AIDS drugs which are
beginning to be approved by the Food and Drug Administration.
Providing Health Care to Native Americans
The FY 1997 President's Budget demonstrates our ongoing commitment to improving the
health of American Indians and Alaska Natives and also in assisting those tribes who wish to
take over the operation of their local health programs from the Indian Health Service. An
increase of $43 million is requested to provide water and waste disposal service to existing
Indian homes. The provision of such services, the top priority of the National Indian Health
Board, is critical in reducing incidents of waterborne and other communicable diseases,
gastroenteric disease, and neonatal death rates. Increased funding (+$16 million) is also
requested for new health initiatives for women, children, elders, and urban Indians. The
9
President's Budget contains an additional $46 million to cover the contract support costs
incurred by tribes in their operation of local programs.
Substance Abuse and Mental Health
In light of recent trends in drug use and mental illness in the country, the President's Budget
also proposes an increase of $244 million to treat and prevent mental illness and substance
abuse. An expanded knowledge development and application program will provide critically
needed information about managed care; early childhood problems; individuals with, or at
risk for, both mental health and substance abuse problems; services in the criminal justice
system; and application of knowledge to improve service delivery systems at the local and
State levels. The budget also proposes $1.5 billion for both the Substance Abuse and Mental
Health Performance Partnership State grants.
New and Emerging Infectious Diseases
Emerging infectious disease outbreaks pose a threat to everyone in the country. Our
vulnerability to waterborne, foodborne, and airborne infections has been dramatically
demonstrated and widely publicized with recent disease outbreaks caused by Cryptosporidium
parasites in the water supply in Milwaukee; E. coli 0157:H7 bacteria in undercooked
hamburgers in the Pacific Northwest; and hantavirus from rodents in the Southwest. The
request includes an increase of $26 million, or a total of $45 million, to double our
investment in the Centers for Disease Control and Prevention national prevention strategy--
"Addressing Emerging Infectious Disease Threats." This investment will facilitate rapid
identification and investigation of infectious disease outbreaks, reduce the burden of illness
due to infections, and reduce associated health care costs.
10
HHS BUDGET BY OPERATING DIVISION
(Dollars in millions)
1995
1996
1997
Request
Actual
Policy*
Request
+/-Policy
Food and Drug Administration
BA
$882
$878
$878
$0
Outlays
860
877
881
4
Health Resources and Services
Administration
BA
3,237
3,263
3,309
46
Outlays
2,613
2,955
3,130
175
Indian Health Service
BA
1,960
2,000
2,174
174
Outlays
2,008
1,928
2,042
114
Centers for Disease Control
and Prevention
BA
2,125
2,155
2,230
75
Outlays
1,786
1,971
2,066
95
National Institutes of Health
BA
11,284
11,939
12,406
467
Outlays
10,875
10,916
11,949
1,033
Substance Abuse and Mental Health
Services Administration
BA
2,195
1,854
2,098
244
Outlays
2,444
2,105
2,024
-81
Agency for Health Care Policy and
Research
BA
141
80
90
10
Outlays
139
129
97
-32
Health Care Financing Administration
BA
245,796
261,231
295,950
34,719
Outlays
248,924
272,475
297,219
24,744
Administration for Children and Families
BA
33,178
32,610
34,296
1,686
Outlays
31,993
32,875
33,488
613
11
HHS BUDGET BY OPERATING DIVISION, Continued
(Dollars in millions)
1995
1996
1997
Request
Actual
Policy*
Request
+/-Policy
Administration on Aging
BA
$876
$828
$828
$0
Outlays
951
776
819
43
Departmental Management
BA
230
172
178
6
Outlays (Federal Funds)
262
204
157
-47
Office of Inspector General
BA
79
74
75
1
Outlays (Federal Funds)
89
74
75
1
Program Support Center
BA
212
220
229
9
Outlays (Federal Funds)
208
224
225
1
Receipts
BA
-45
-46
-46
o
Outlays
-45
-46
-46
0
TOTAL, HHS
BA
$302,150
$317,258
$354,695
$37,437
Outlays
$303,107
$327,463
$354,126
$26,663
Full-time Equivalents
58,924
58,924
58,924
o
*
Based on levels of the ninth CR, including an incremental policy adjustment.
12
COMPOSITION OF THE HHS BUDGET
(Dollars in millions)
1995
1996
1997
Request
Actual
Policy*
Request
+/-Policy
Entitlement Programs (outlays):
Medicare
$180,097
$197,427
$210,106
+$12,679
Medicaid
89,070
94,892
105,571
+10,679
Family Support Payments to States
17,133
17,366
17,955
+589
Foster Care and Adoption Assist
3,244
3,740
4,144
+404
Social Services Block Grant
2,797
3,183
5,001
+1,818
JOB Opportunities and Basic Skills
1,012
1,000
1,000
0
State Legalization Impact Assist. Grts
4,000
0
0
0
Family Support and Preservation
150
225
201
-24
Other/Financing Offsets
(26,203)
(21,918)
(22,699)
(781)
Subtotal, Entitlement Programs:
Outlays
$271,300
$295,915
$321,279
+$25,364
Discretionary Programs (Budget Authority):
National Institutes of Health
$11,284
$11,939
$12,406
$467
Other Public Health Programs
10,335
10,050
10,587
537
HCFA Program Management
2,178
2,132
2,202
70
Children & Family Services Programs
4,876
4,825
5,280
455
Low Income Home Energy Assistance
1,419
1,000
1,000
0
Grants to States for Child Care
948
935
1,049
114
Administration on Aging
876
828
828
0
Refugee & Entrant Resettlement
406
405
382
-23
Departmental Management
171
151
154
3
Office for Civil Rights
22
19
22
3
Office of Inspector General
79
74
75
1
Subtotal, Discretionary Programs:
Budget Authority
$32,594
$32,358
$33,985
$1,627
Outlays
31,807
31,548
32,847
1,299
TOTAL, HHS OUTLAYS
$303,107
$327,463
$354,126
+$26,663
*
Based on levels of the ninth CR, including an incremental policy adjustment.
** Does not add due to rounding.
13
FOOD AND DRUG ADMINISTRATION
(Dollars in millions)
1995
1996
1997
Request
Actual
Enacted
Request
+/-Enacted
Current Law:
Program Level
$973
$981
$985
+ $4
Budget Authority
882
878
878
0
Outlays
860
877
881
+4
Proposed Legislation:
Program Level
0
$39
+ -$39
Budget Authority
0
0
0
Outlays
0
0
0
Total, Net Proposed Law:
Program Level
$973
$981
$1,024
+ $43
Budget Authority
882
878
878
0
Outlays
860
877
881
+4
FTE
9,264
9,264
9,264
0
FOOD AND DRUG ADMINISTRATION
Summary
Current Law
Millions
The FY 1997 budget request for the Food
1200
and Drug Administration (FDA) under
$978
$981
$985
1000
$934
current law is $985 million in program level
$826
$800
8766
spending, of which $107 million is to be
derived from authorized, targeted,
$600
industry-specific user fees. In addition,
8400
FDA is proposing two new additive user
fees bringing the total proposed program
$200
level spending to $1,024 million, a
$0
$43 million increase over FY 1996. Under
1992
1993
1994
1995
1996
1997
the FY 1997 request, total budget authority
will be maintained at the FY 1996 level.
14
Food Safety
Although the United States has the safest food supply in the world, the Centers for Disease
Control and Prevention estimate that there are as many as 9,000 food-related deaths and
80 million food-related illnesses each year in this country. The annual costs for hospital
stays alone related to food-borne disease are estimated to be $3.1 billion, with
seafood-related illnesses costing about $144 million annually. FDA is proposing a series of
Food Safety initiatives to address current concerns and to meet the safety issues the Nation is
likely to face in the 21st century. A modest $4 million increase would allow FDA to
expedite implementation of the new Seafood Hazard Analysis Critical Control Point
(HACCP) program, expand and develop new partnerships with academia and industry to
increase our food science capabilities, and use third party reviewers to improve the timeliness
and efficiency of the food additive petition review process.
Prescription Drug User Fees
The Prescription Drug User Fee Act (PDUFA), first implemented in 1993, has been highly
successful in enabling FDA to significantly accelerate approval of safe and effective human
drugs. FDA has met or exceeded all of the Act's performance goals to date. Already, FDA
has achieved one of the major 1997 performance goals in FY 1994--a full three years ahead
of schedule. For the drugs submitted to FDA in FY 1994, FDA reviewed and acted upon
96 percent of them on time. In most cases, that meant action within 12 months. The
backlog of overdue applications has been eliminated. To sustain momentum toward reaching
the final performance goals in FY 1997, the FY 1997 budget includes $87.5 million in user
fees, a 7 percent increase. This will provide for additional review staff, bringing FDA to a
total PDUFA staffing increase of 700 FTE.
Mammography Quality Standards Act
FDA will continue to implement the Mammography Quality Standards Act to assure that
women receive quality mammography from facilities that maintain a high standard of safety
and accuracy. In FY 1997, FDA will focus its energies on ensuring that all facilities are
meeting the quality standards for mammography and that identified deficiencies are
corrected. By the end of FY 1996, for the first time, certified personnel will have inspected
over 10,000 facilities in all. During FY 1997, FDA will fund 10,000 annual inspections and
will conduct 3,000 facility recertifications. To achieve these goals, the FDA request includes
$26 million for implementing the Mammography Quality Standards Act, of which
$13 million is to be collected in fees from inspected facilities, as authorized by the Act.
Proposed New User Fees
In FY 1997, FDA is requesting authority to implement two new user fee activities totalling
$39 million. Of these fees, $24 million is to accelerate the medical device approval process
and $15 million is to improve the effectiveness and efficiency of its imported products
regulatory compliance program. FDA is proposing to incorporate the concepts embodied in
15
the highly effective Prescription Drug User Fee Act into the medical devices field to
eliminate the current backlog and to reduce the time it takes to approve medical device
applications. The user fee goal is to increase the percentage of pre-market notification
(510-(k)) applications completed within 90 days from 50 percent in FY 1995 to 90 percent in
FY 1997, and pre-market approval applications completed within 180 days from 44 percent
in FY 1995 to 75 percent in FY 1997. The new import user fee will provide FDA the
resources necessary to substantially reduce the risk posed by potentially harmful foods and
other products that reach the American marketplace through import channels.
16
FDA OVERVIEW
(Dollars in millions)
1995
1996
1997
Request
Actual
Enacted
Request
+/-Enacted
Current Law:
Salaries & Expenses:
Foods
$215
$222
$226
+ $4
Drugs
445
446
449
+3
Medical Devices
166
170
170
0
National Center for
Toxicological Research
35
38
38
0
Program Management
43
42
42
0
Subtotal, Salaries & Expenses
$904
$918
$925
+ $7
GSA Rental Payments
46
46
46
0
Buildings & Facilities
18
12
8
-4
Revolving Fund
5
5
6
+1
Subtotal, Program Level
$973
$981
$985
+ $4
Less User Fees:
Prescription Drugs
$79
$85
$88
+ $3
Mammography Inspection
7
13
13
0
Revolving Fund
5
5
6
+1
Subtotal, User Fees
$91
$103
$107
+$4
Total, BA
$882
$878
$878
0
Proposed Law:
User Fees:
Medical Devices
$0
$24
+ $24
Import Inspection
0
15
+ 15
Subtotal, User Fees
$0
$39
+ $39
Total, Program Level
$973
$981
$1,024
+ $43
FTE
9,264
9,264
9,264
o
17
HEALTH RESOURCES AND SERVICES ADMINISTRATION
(Dollars in millions)
1995
1996
1997
Request
Actual
Policy*
Request
+/-Policy
Program Level
$3,042
$3,091
$3,122
+$31
Budget Authority
3,031
3,083
3,116
+33
Outlays
2,455
2,803
2,979
+176
FTE
2,010
2,010
2,010
0
*
Based on levels of the ninth CR, including an incremental policy adjustment.
Summary
The FY 1997 budget request for the Health Resources and Services Administration (HRSA)
is $3.1 billion. HRSA is responsible for developing primary health care services and
resources, providing access to health care for the medically underserved, protecting and
improving the health of all mothers and children, and maintaining a high quality of health
care nationally. As managed care is becoming an increasingly important component of
health care delivery at the State and local level across the United States and medically
underserved populations served by HRSA programs are being directed into managed care,
HRSA is addressing these changes.
HRSA has established a Center for Managed Care to coordinate activities across HRSA and
has initiated new efforts to ensure that HRSA funded programs are active and knowledgeable
participants in managed care systems, that managed care providers are aware of and actively
attempting to meet the needs of underserved populations, and that an appropriately trained
primary care workforce exists to provide services in managed care settings. HRSA has
supported the creation of networks for managed care to assure that its health centers and
other HRSA grantees can negotiate arrangements with State Medicaid agencies and HMOs.
HRSA has offered over 100 managed care training sessions in medical management,
information systems, contract negotiations, and financial risk assessment. In addition, special
training programs have been offered to providers of care for special populations--HIV
infected individuals, mothers and children, and the homeless--tailored to their specific needs.
18
Ryan White
The Ryan White AIDS CARE Act has enabled over 300,000 individuals with HIV and AIDS
to receive health and supportive services, allowing many, who would have died, to live and
lead productive lives. The FY 1997 request of $807 million for the Ryan White activities, a
$32 million, or 4 percent increase over the FY 1996 level, continues our commitment to
improve the quality and availability of care for individuals and families with HIV and AIDS.
This request includes an additional $17 million for Emergency Relief for Cities (Title I) to
ensure that each of the 42 metropolitan communities funded in FY 1995 and the up to
ten additional cities eligible in FY 1996 will receive the same formula grant as well as
provide funds to any newly eligible communities in FY 1997. Included in the request is
$285 million, or a 4 percent increase, for formula grants to States to improve services in
areas with critical gaps for underserved and hard to reach populations, as well as to augment
States' flexibility in selecting pharmaceuticals. A total of $64 million, or a 3 percent
increase, is requested in discretionary grants to allow an additional five to ten thousand
individuals who are infected with, or at-risk of, HIV infection to receive primary care
services. For Title IV pediatric projects, a total of $34 million is requested, a 6 percent
increase, which will provide enhanced services for preventing maternal HIV transmission.
On March 5, 1996, the President proposed a $52 million budget amendment for the AIDS
Drug Assistance Program (ADAP). The ADAP program provides AIDS drugs that prolong
and enhance the quality of life for the over 55,000 individuals currently enrolled. This
increase is needed to assist States in making available to patients the long-anticipated new
class of AIDS drugs, protease inhibitors, as soon as they are approved by the FDA.
Protease inhibitors, used in combination with already approved AIDS drugs, are expected to
improve the length and quality of life for individuals suffering from AIDS.
Consolidated Health Centers
The FY 1997 request for the Consolidated Health Centers cluster provides $757 million for
grants to local health centers which serve vulnerable underserved populations, including
migrant workers, homeless individuals, and residents of public housing. This funding level
maintains our commitment to ensure that the most vulnerable of our populations receive
quality health care. These community-based centers provide accessible, quality, primary
health care to more than 8.1 million medically underserved individuals--44 percent of whom
are children--through over 720 grantees at 2,204 sites nationwide. Today, over 150 health
centers are involved in managed care contracting throughout the Nation, primarily serving
Medicaid managed care patients.
Health Professions
The FY 1997 budget request for health professions programs is $366 million. HRSA is
continuing to propose consolidation of numerous separate health professions training
programs into five clusters over a period of three years. The cluster strategy allows greater
flexibility in effectively responding to emerging health workforce challenges. The clusters
will enhance our ability to assist students financially, encourage expansion of
19
multi-disciplinary, outcome-oriented primary care training, as well as bring simplicity to the
administrative processes of application submission and grant issuance.
The Health Professions Workforce cluster ($117 million) will merge six student
assistance programs into one program, providing student assistance through obligated
financial assistance, non-service subsidized loans, and non-service market rate loans,
as well as focus on national workforce research and data efforts. This cluster will
include the entire National Health Service Corps.
The Enhanced Area Health Education Training cluster ($35 million) incorporates eight
categorical programs into one program which will require the formation of consortia
to link educational systems with States, communities and employers to expand the
operation of interdisciplinary, outcome-oriented training. This critical effort ties
medical education to the service needs of the underserved. It provides benefits to
those being trained so that they receive solid grounding in practical health care. It
also provides benefits to States and communities by providing knowledgeable
individuals prepared to deal with the health issues they face.
The Minority and Disadvantaged Health cluster ($64 million) consolidates seven
programs into one program which will support targeted, outcome-oriented activities
that increase the number of minority and disadvantaged health professionals. This
program will help advance the development of human potential and strengthen the
capacity of Historically Black Colleges and Universities and Hispanic Serving
Institutions. This cluster will eliminate restrictive eligibility and project requirements
while increasing flexibility in responding to minority health needs.
The Primary Care Medicine and Public Health Training cluster ($80 million)
consolidates six programs. This program will fund comprehensive, flexible, and
effective activities that will increase the number and enhance the quality of primary
medical care providers and public health workers in order to meet National, State,
and local health care needs.
The Nursing Education Practice Initiatives cluster ($70 million) combines six
programs into three activities focusing on basic nurse training, advanced practice
nurse training, and workforce diversity. It provides solid reinforcements to our
continued efforts to help provide well-trained individuals in this key component of the
health care workforce.
Services to Mothers and Children
In keeping with the Department's strong commitment to investing in programs which support
Strong Foundations and Safe Passages for our Nation's children, the HRSA budget supports
funding for several programs with the sole mission of improving the health of women of
childbearing age and their children. These programs include the Maternal and Child Health
Block Grant, a total program level of $681 million; Healthy Start, a total program level of
$75 million; and the Title X Family Planning program, a total program level of
$198 million, an increase of $5 million, or 3 percent, over FY 1996. The family planning
20
program provides services to approximately four million persons, primarily women and
adolescents, in over 4,000 clinics nationwide. The funds will increase outreach to
underserved individuals, place an emphasis on comprehensive reproductive health services,
and focus on adolescent pregnancy and sexually transmitted disease prevention.
Other HRSA
For the remaining HRSA programs, total spending of $238 million is proposed. This level
will ensure sufficient funds are available to adequately fund rural health initiatives such as
telemedicine, critical to assisting rural physicians in their daily practice, and internal HRSA
initiatives such as technology improvements and workforce development to allow HRSA to
continue to streamline its workforce and organization while maintaining a high level of
service to the vulnerable populations it serves. In addition, this level will allow HRSA to
keep its organ transplantation and Bone Marrow Donor programs viable.
21
HRSA OVERVIEW
(Dollars in millions)
1995
1996
1997
Request
Actual
Policy*
Request
+ /-Policy
Ryan White
$633
$775
$807
+ $32
Other AIDS Services
23
12
23
+11
Community Health Centers
757
756
757
+1
Health Professions Clusters:
Workforce Development
124
115
117
+2
Enhanced Areas Health Education
48
42
35
-7
Minority/Disadvantaged
91
81
64
-17
Primary Care Medicine & Public
Health
79
74
80
+6
Nurse Education
59
56
70
+14
Subtotal, Health Professions
$401
$368
$366
-$2
Maternal and Child Health Block
Grant
$684
$681
$681
$0
Healthy Start
104
75
75
0
Family Planning
193
193
198
+5
Special Populations Cluster
17
12
8
-4
Rural Health Research
9
8
8
o
Rural Outreach
26
43
30
-13
Malpractice Databank
11
8
6
-2
Program Management
124
114
116
+2
Other Services
60
46
47
+1
Subtotal, Disc. Program Level
$3,042
$3,091
$3,122
+ $31
Offsets
-11
-8
-6
+2
Total, BA
$3,031
$3,083
$3,116
+ $33
FTE
2,010
2,010
2,010
o
*
Based on levels of the ninth CR, including an incremental policy adjustment.
22
INDIAN HEALTH SERVICE
(Dollars in millions)
1995
1996
1997
Request
Actual
Policy*
Request
+/-Policy
Program Level
$2,156
$2,214
$2,400
+$186
Budget Authority
1,960
2,000
2,174
+174
Outlays
2,008
1,928
2,041
+113
FTE
14,856
14,856
14,856
0
*
Based on levels of the ninth CR, including an incremental policy adjustment.
Summary
The FY 1997 budget request for the Indian
NEW INITIATIVES IN FY 1997
Health Service (IHS) is $2.4 billion.
(dollars in millions)
Additional funds will be used primarily for
250
sanitation construction, to make it easier for
tribes to take over the operation of their
200
local health programs, to provide additional
150
staff in six new/expanded health facilities,
and to increase services for populations with
100
special needs (e.g., women, children, urban
50
Indians, the elderly). The request assumes
collection of $222 million in insurance
0
1994
1995
1996
1997
payments (e.g., Medicaid, Medicare,
Sanitation Const.
Contract Support
employer provided) for Indian patients,
consistent with FY 1996 levels (total
FY 1997 reimbursements of $226 million include $4.5 million from rental of quarters).
Agency Description
IHS provides medical care to about 1.4 million American Indians and Alaska Natives
(AI/AN) who are members of Federally recognized tribes. Care is provided directly through
a network of 49 hospitals and 484 health centers and stations located primarily in Oklahoma,
the Northern Plains, California, Alaska, and the Southwest. Local tribes operate 11 of the
hospitals and 372 of the centers and stations under contract with IHS. Medical care is also
purchased ($369 million in FY 1997) for Indian patients from local hospitals and medical
providers. While care is primarily provided in areas which are on or near reservations,
funds are also provided to urban health grantees ($23 million in FY 1997) in 41 cities with
23
large AI/AN populations. In addition to providing medical care, IHS provides preventive
and environmental health services, mental health care, and alcohol/substance abuse
prevention and treatment. IHS also provides funds to increase the supply of AI/AN health
care providers and as incentives for health care professionals to practice in Indian country.
The health statistics for Indian people have
DECLINING MORTALITY RATES
improved dramatically, both in absolute
(Deaths per 100,000 Pop.)
terms and in comparison with all
Deaths per 10,000 for Accidents
Americans, since IHS began keeping
12
records in the early 1970s. Two areas
10
which have seen significant improvement in
5
recent years are infant mortality and deaths
6
from accidents. Infant mortality has
4
declined by 15.3 percent while the death
2
rate for accidents has declined by
o
1987
1988
1989
1990
1991
12.8 percent.
Infant Mortality
Accidents
Trends in Indian Health, 1995
IHS Restructuring
The final report of the Indian Health Design Team (IHDT) was published in November of
1995, the product of more than a year's worth of development, including extensive feedback
from IHS' customers (i.e., tribes, tribal organizations, and individuals throughout Indian
country) and employees. The IHDT recommends shifting control to the local level where
IHS staff or tribal self-determination contractors provide health care. Headquarters and
regional operations will be consolidated to provide additional dollars and staff for health care
operations. Implementation has begun with the restructuring of IHS' headquarters, reducing
ten existing offices to three (Office of the Director, Office of Health Support, Office of
Administrative Support). The second phase of implementation will consolidate operations at
IHS' twelve regional or area offices, each one of which now oversees all IHS operations in a
geographic area. Administrative support functions (e.g., finance, procurement, personnel)
will be consolidated in Regional Support Centers. Health Professions support (e.g., maternal
and child health, injury prevention, consultations with local health care providers) will also
be consolidated into a smaller number of specialty sites. The IHDT recommendations will
also reduce headquarters and area office budgets and free up FTE for local health care
provision.
Changes From FY 1996
The FY 1997 budget requests an increase in budget authority of $174 million (+8.7 percent)
primarily for Clinical Services (+$80 million), Self-Determination Contracting
(+$46 million), and Sanitation Construction (+$43 million). The request also assumes an
increase of $12 million in insurance collections (+5.3 percent). Insurance collections are
used to make improvements to hospitals and health clinics identified by accreditors from the
Health Care Financing Administration and the Joint Commission on Accreditation of Health
Care Organizations.
24
The additional $174 million will fund a number of new initiatives in FY 1997:
Self-Determination Funds ($212 million; +$46 million): The request provides an
increase of 28 percent to cover contract support costs, which are the management
expenses tribes incur when they take over the operation of local health programs from
IHS. The Indian Self-Determination Act gives tribes the right to take over these
operations but their ability to do this is hindered unless sufficient funding is available
for contract support costs. Tribally operated programs have increased steadily since
the Act's passage and accounted for about 37 percent of IHS' budget in FY 1995.
Sanitation Construction ($128 million; +$43 million): IHS has been providing water
and waste disposal services to Indian homes since 1960, helping to increase the
number of homes with such service from about 20 percent to over nearly 90 percent.
Of the $128 million, $86 million will be used to provide services to 17,400 existing
homes (up from 8,800 in FY 1996), and $42 million will be used to provide services
for new homes as they are built (the same as in FY 1996).
Health Initiative for Special Populations (+$16 million): IHS will begin four special
initiatives focused primarily on the needs of women, children, elders, and urban
Indians. Funds will be used for outreach services aimed at preventing domestic
violence (women and children), other preventive services for women (diabetes,
cancer, alcohol and substance abuse), to provide training and access to off-reservation
services to better serve the growing elderly population, to provide additional services
to urban Indians, and to expand community efforts to reduce injuries (e.g., DWI, seat
belts/child restraints, sports injuries, violence, pedestrian/motor vehicle collisions).
Operation of New Facilities (+$27 million): The request includes funds necessary to
provide an additional 382 staff for six facilities opening in FY 1996 and FY 1997.
These facilities are Harlem (MT), White Earth (MN), Kotzebue (AK), Shiprock
(NM), Anchorage (AK), and Hayes (MT). IHS is not proposing to increase its total
staff level between FY 1995 and FY 1997. To the extent these new staff are Federal
employees, they will be offset by staff reductions primarily in headquarters and area
offices.
Other Initiatives (+$7 million): The request also includes $3.5 million to purchase
medical services for five newly recognized tribes (Mohegan Indian Tribe of
Connecticut; Jena Band of Choctaw of Louisiana; and three tribes from Michigan:
Little Traverse Band of Odawa, Little River Band of Ottawa, Pokagon Band of
Potawatomi), $2 million for health professions scholarships, and $1.5 million for
system upgrades and improved electronic communication.
IHS is also requesting $44 million for pay costs and inflation, and for the costs associated
with turning area and headquarters operations over to contracting tribes (e.g., change of duty
station, severance pay). Dollars requested for new health facility construction will be
reduced (-$9 million) with the full funding of all ongoing facilities construction occurring in
FY 1996 (Hayes, MT and White Earth, MN). IHS will complete design of three facilities in
FY 1997--Pinon, Ft. Defiance, and Hopi (Second Mesa)--all located in Arizona.
25
IHS OVERVIEW
(Dollars in millions)
1995
1996
1997
Request
Actual
Policy*
Request
+/-Policy
Services:
Clinical Services
$1,370
$1,418
$1,498
+$80
Preventive Health
77
78
82
+4
Direct Operations
50
49
51
+2
Self-Determination
Contracting
159
166
212
+46
Other
51
50
56
+6
Subtotal, Services
$1,707
$1,761
$1,899
+$138
Facilities:
Sanitation Construction
$85
$85
$128
+$43
Facility Construction
28
12
3
-9
Fac/Envir Health Support
88
90
92
+2
Other
52
52
52
0
Subtotal, Facilities
$253
$239
$275
+$36
Total, BA
$1,960
$2,000
$2,174
+$174
Reimbursements
196
214
226
+12
Total, Program Level
$2,156
$2,214
$2,400
+$186
FTE
14,856
14,856
14,856
0
* Based on levels of the ninth CR, including an incremental policy adjustment.
26
CENTERS FOR DISEASE CONTROL AND PREVENTION
(Dollars in millions)
1995
1996
1997
Request
Actual
Policy*
Request
+/-Policy
Program Level
$2,223
$2,256
$2,343
+$87
Budget Authority
2,125
2,155
2,230
+75
Outlays
1,786
1,971
2,066
+95
FTE
6,645
6,592
6,592
0
*
Based on FY 1996 appropriation, including an incremental policy adjustment.
Comparable Table--includes Bureau of Mines Safety and Health Research comparable figures
for FY 1995 and FY 1996.
Summary
The FY 1997 President's Budget request for the Centers for Disease Control and Prevention
(CDC) provides a $2.3 billion level of spending.
CDC is the leading public health agency responsible for disease prevention and health
promotion efforts. Consistent with the strategies articulated in the Healthy People 2000
report, emphasis is placed on expanding proven prevention services which target improving
the health status of all Americans. Special attention is placed on healthy lifestyles at an early
age and on preventing costly health problems, particularly those affecting the economically
disadvantaged. As this nation moves closer to the millennium, CDC is focusing on
developing measures of prevention effectiveness and health outcomes.
Childhood Immunization
It is the Administration's goal that, no later than the year 2000, at least 90 percent of the
nation's two-year-olds will be fully immunized. Over the past three years, investments in
childhood vaccines and State vaccine delivery infrastructures have moved the Nation further
toward accomplishing this goal. For 1995, the National Immunization Survey (NIS)
indicates that 75 percent of our two-year-olds are now fully immunized compared to just
55 percent in 1992. In FY 1997, the Administration will spend a total of $1.0 billion on
childhood immunization--$488 million on CDC discretionary programs and $524 million on
the Vaccines for Children (VFC) entitlement program.
27
As part of its broad Childhood
Immunization Initiative, the CDC has
HEALTHY CHILDREN
been working toward global polio
Meeting Our Immunization Goals
eradication--and this goal is within
Millions
reach--achievable by the year 2000.
8.2 Million Children Under 2 Years of Age
The FY 1997 request includes an
increase of $20 million, or a total of
10
7.4 Million
$47 million, for global polio
8
6.2 Million
eradication. Data now indicate that
6
polio cases are down by 80 percent
4
globally since 1988. According to
2
1994 data, 145 countries in the world
0
1996
1997
1998
1999
2000
are already polio-free. Yet, the
World Health Organization (WHO)
Children Immunized
Children Under 2
estimates that over 100,000 children
are needlessly crippled by polio
paralysis each year.
Pediatric Vaccine Series
Over the past year, tremendous
1996
Dollars
350
strides have been made in
1992
$312.75
implementing the new VFC
800
$245.84
entitlement program. Over 39,000
250
providers in the U.S. have been
200
$164.29
recruited to provide VFC vaccines to
150
$122.19
Medicaid, uninsured, underinsured,
100
American Indian, and Alaska Native
50
children at their first medical point of
o
contact. Enrolling providers in VFC
Private
Public
Private
Public
reduces the missed opportunities for
DTP
DTP/HIb
HIb
DTaP
immunization formerly caused by
MMR
OPV
Hepalitis
Varidella
provider referrals to public health
clinics which required parents to
make a second trip away from a child's medical home for vaccinations. In FY 1996, the
VFC program will become fully operational and Medicaid payments for vaccines will be
completely phased out. For the first time in FY 1996, CDC also will be able to help States
target resources to pockets of need because of the new National Immunization Survey.
HIV/AIDS
A total of $617 million, an increase of $34 million (6 percent) over FY 1996, is requested
for CDC HIV/AIDS prevention programs. The request includes $20 million for applied
HIV/AIDS research which will enable CDC and its prevention partners to identify effective
interventions for specific populations, for instance--women; injecting drug and other
substance abusers; and high-risk youth, both in and out of school. In addition, $12 million
will be used to build on the community planning model established by the HIV/AIDS
program last year. This model gives grantees broad discretion in setting program priorities
and determining how funds will be spent--resulting in customized programs necessary to meet
28
the needs of diverse communities across this nation. This flexibility permits communities to
target resources to where they are most needed and will have the most impact--for instance
meeting the needs of adolescents. Also requested is an increase of $2 million to meet the
growing demand for tuberculosis testing of HIV-infected individuals. Of the total request,
$298 million will be awarded through an HIV/AIDS Performance Partnership Grant and
$319 million will remain with CDC for national outreach and education, technical assistance,
and research.
New and Emerging Infectious
Diseases
Emerging Infectious Diseases
National Plan
In recent years, infectious disease
Dollars In Millions
50
$45 M
outbreaks have taught us that we are
-
susceptible to infectious diseases--
40
-
HIV, plague, and influenza are good
30
-
examples of that risk. Potential
$18 M
20
threats to U.S. health are steadily
-
$8 M
10
escalating because of increasing
-
$1 M
0
global interdependence, modern
-
transportation, trade, and changing
FY 1994
FY 1995
FY 1996
FY 1997
social and cultural patterns. CDC is
Surveillance
Applied Research
seeking a total of $88 million for
infectious disease activities. Of this
Prevention
Intrastructure
amount, $45 million is included to
implement the CDC national prevention strategy for addressing emerging infectious disease
threats--an increase of $26 million over FY 1996. Since FY 1993, CDC's total budget for
preventing and controlling infectious diseases has more than doubled. The FY 1997 request
will provide financial and technical support to 30 State health departments for surveillance,
epidemiologic and laboratory investigations, and educational programs on infectious diseases,
including rapid identification and investigation of outbreaks and drug resistant diseases.
Three additional population-based Emerging Infections Programs would be established, for a
total of eight nationwide.
This investment has the potential to reduce the burden of illness due to infections and reduce
health care costs substantially. For example, Salmonella infections now kill at least
1,000 Americans a year and add $1 billion in medical costs to the country's health care
burden; Campylobacter infections add another $1 billion to our nation's health care bill; and
influenza produces direct medical costs approaching $5 billion and lost productivity costs of
almost $12 million each year.
29
HHS Survey Integration -- National Health and Nutrition Examination Survey
(NHANES)
HHS has closely reviewed its health data surveys and produced a long-range plan for health
survey integration. This plan calls for linkages--field work, study samples, data collection
questionnaires, etc.--and will result in more comprehensive data collection and analysis--as
well as saving resources from economies of scale. In addition, surveys that were once
periodic (done once a decade) are being converted to continuous surveys with the same
periodicity--to be more responsive to the fast pace of the nation's health care enterprise. For
the National Center for Health Statistics, the request totals $90 million for health statistics in
FY 1997.
The FY 1997 request includes an increase of $10 million, or a total of $14 million, for the
National Health and Nutrition Examination Survey (NHANES). As part of the HHS survey
integration plan, NHANES will be linked to the Medical Expenditure Panel Survey (MEPS)
and the National Health Interview Survey (NHIS). The analytic linkage of these three
surveys is crucial for providing ongoing monitoring of our nation's health status, insurance,
expenditures, and health risk and behaviors.
NHANES is a consolidation of data efforts of multiple agencies and departments, not just
CDC or HHS. Food fortification policy at FDA relies on NHANES measures, as does
monitoring of toxicants for the EPA. NHANES provides unique information through direct
physical examinations, biochemical measures, and nutritional analysis from a large,
representative sample of persons. By direct standardized measurements, NHANES is able to
objectively measure health conditions and risks, even if they are not known to the survey
respondent.
NHANES also is the only national source of objectively measured health status data, and is
essential to interpreting information from other integrated survey components. NHANES
obtains direct measures of health necessary to measure the outcomes--not just the costs
of--investments in health. These data also allow us to relate health care needs to health care
use and expenditures. NHANES is an important part of national surveillance capability for
infectious diseases, behavioral and environmental risk factors to health, undiagnosed
preventable illnesses, food safety, nutritional status, and other critical issues. No other effort
in the public or private sector provides the type of information available through NHANES.
Examples of NHANES data uses include monitoring of: lead exposure, toxic exposure and
environmental effects, genetics, food safety (for instance, olestra), folate (food fortification
impact), hypertension and cholesterol (program success), and HIV and Hepatitis C
Seroprevalence (necessary to protect the national blood supply).
National Institute for Occupational Safety and Health (NIOSH)
CDC is requesting a total of $136 million in FY 1997. A major component of this request is
an investment of $36 million to fully fund the NIOSH new advanced research facility. This
state-of-the-art laboratory will increase the nation's occupational safety and health research
capacity by more than one-third. When fully staffed, more than 300 researchers will have
the opportunity to make advances in biochemistry, immunotoxicology, and molecular and
30
cellular biology that will be translated into information that directly assists work site health
and safety programs. The facility will open in the Spring of 1996.
NIOSH programs establish and disseminate scientific and public health information necessary
to ensure safe and healthful working conditions for 127 million American working men and
women. Americans are working more hours than ever before, in environments that may
profoundly affect their health. Even with the passage of the Occupational Health and Safety
Act in 1970, and the mine safety laws that were enacted in 1969 and 1977 to protect miners,
workplace hazards continue to inflict a tremendous toll in both human and economic costs.
Even now, work-related injuries and illnesses still cost an estimated 63 thousand lives each
year. Work injuries alone cost our economy over $100 billion a year, and occupational
illnesses cost additional billions of dollars.
Research plans for the coming year will focus on occupational lung disease, musculoskeletal
injuries, cancers, traumatic injuries, reproductive disorders, neurotoxic disorders,
cardiovascular disease, noise-induced hearing loss, dermatologic conditions, and protective
equipment. These efforts will help to address solutions to occupational disease and
workplace safety concerns in those fields where the dangers are the greatest--mining,
construction, transportation/communications/public utilities and agriculture/forestry/fishing.
Mine Health and Safety Research-Bureau of Mines Transfer
In FY 1997, CDC will take over the management of the health and safety research functions
formerly performed by the Bureau of Mines. While the Mine Health and Safety Research
program was initially transferred to the Department of Energy in FY 1996, the program will
become part of the National Institute for Occupational Safety and Health (NIOSH) in
FY 1997. A total of $32 million and 413 FTE is requested for continuing this program in
FY 1997.
Infectious Disease Laboratories: Repair and Improvement
The FY 1997 request of $8 million for buildings and facilities includes an increase of
$4 million for design and construction of 15,000 square feet of BLS-3 (Biosafety Level 3)
containment laboratory space necessary to allow CDC to renovate its current laboratories
which are 35 years old and deteriorating. The current building and facilities budget is not
adequate to both build a new building and address CDC's backlog of building repair and
improvement projects, so CDC has found offsets within programs that will directly benefit
from the new laboratories. Conditions of existing laboratory space, including antiquated
airhandling systems, place several hundred scientific employees at risk from highly infectious
and dangerous organisms. This lab project is a top priority for the agency.
31
Rape Prevention/Education and Domestic Violence Demonstrations
The FY 1997 request includes $32 million from the Violent Crime Reduction Trust Fund to
continue three programs authorized by the Violent Crime Control and Enforcement Act of
1994. CDC will distribute $29 million to States as part of the Prevention Block Grant for
rape prevention and education, and award $3 million for domestic violence demonstration
projects. These programs were first funded in FY 1996.
Chronic Diseases and Disabilities
The FY 1997 request includes $268 million to address the significant premature death and
avoidable illness and disability that are caused by personal behaviors and exposure to toxic
substances and natural disasters. Chronic diseases, including those present at birth, represent
over 70 percent of the causes of death in the United States. Prevention of disease and its
progression is based on reducing or eliminating behavioral risk factors-such as tobacco use,
physical inactivity, and poor nutrition; increasing the prevalence of health promotion
practices; detecting disease early to avoid complications; assessing human risks from
environmental exposures; and reducing or eliminating exposures to environmental hazards.
The CDC addresses a wide range of chronic and environmental diseases, including
cardiovascular disease--the leading cause of death in the United States; diabetes; cancers;
birth defects; reproductive disorders; and chronic fatigue syndrome.
Sexually Transmitted Diseases and Tuberculosis
The request includes $223 million to continue CDC programs to prevent and control
infectious sexually transmitted diseases (STDs) and tuberculosis (TB). It is important that the
Nation remain vigilant in maintaining adequate resources to hold STDs and TB in check. As
recent as 1989, the U.S. had a resurgence of TB--a disease that had steadily declined since
the 1940s. As a result, the CDC budget for TB has more than doubled since FY 1992--from
$67 million to $145 million--and Medicaid coverage now provides approximately
$130 million for State TB services in non-traditional settings (for instance in crack houses,
rather than in health clinics). Data from 1994 indicate that there has been a 9 percent
decline in TB cases since 1992 when the peak number of cases was reported (26,673).
Maintaining resources necessary to prevent and control STDs is a high priority. More than
750,000 cases of pelvic inflammatory disease (PID) are diagnosed and treated each year,
resulting in more than 165,000 hospitalizations for women aged 15-44. Annually, PID,
secondary to either gonococcal or chlamydia infection, accounts for more than 125,000 cases
of tubal infertility and nearly 50,000 cases of potentially fatal ectopic pregnancy. Delay in
treatment and repeated episodes of symptomatic and asymptomatic PID result in higher rates
of infertility, and result in complications for children born to untreated mothers.
To further complicate matters, these diseases are now presenting new challenges to the
medical establishment as more and more multi-drug resistant (MDR) strains are diagnosed.
32
Although once easily and cost-effectively treated with antibiotics, medical care for MDR-TB
and STDs is much more costly and more often fatal than for non-MDR strains. Prevention
remains our best defense.
Performance Partnership Grants
Similar to last year, the FY 1997 budget proposes to consolidate 32 CDC categorical grant
programs into four Performance Partnership Grants--an HIV Grant, an STD/TB Grant, a
Chronic Disease and Disability Prevention Grant, and an Immunization Grant. As proposed,
these consolidations are designed to increase State flexibility, streamline Federal
management, improve program performance, and ensure accountability.
With the creation of these new, simplified grants, CDC will be able to extend Federal
resources to States with fewer strings attached, with less grant submissions, reviews, and
negotiations, and with broader discretion at the State level to pursue their own priorities.
States will be asked to submit a single annual grant application for each grant program and
their performance on specific goals they choose will be monitored to see that their
performance improves public health.
CDC will retain responsibility for research, demonstration, training, and technical assistance
programs as well as targeted national programs including: purchasing childhood vaccines,
addressing new emerging infectious diseases and environmental health issues, and eliminating
child lead poisoning. CDC also will retain the existing Prevention Block Grant.
33
CDC OVERVIEW
(Dollars in millions)
1995
1996
1997
Request
Actual
Policy*
Request
+/-Policy
Immunizations:
Partnership Grant
$177
$177
$177
$0
Vaccine Purchase
152
141
141
0
Other Immunization
135
150
170
+20
Subtotal
$464
$468
$488
+ $20
HIV/AIDS:
Partnership Grant
$286
$285
$298
+ $13
Other HIV/AIDS
304
298
319
+21
Subtotal
$590
$583
$617
+ -$34
Infectious Diseases
54
62
88
+26
Health Statistics
81
80
90
+10
Occupational Safety and Health
132
137
136
-1
Mine Health & Safety Research
42
32
32
0
Building & Facilities
3
4
8
+4
Preventive Health Svcs Block Grant
158
145
145
0
Rape Prevention/Education
0
29
29
0
Domestic Violence Demos
0
3
3
0
Injury/Violence Control
44
43
43
0
Chronic Diseases & Disabilities:
Partnership Grant
$118
$118
$117
-$1
Chronic & Environmental Diseases
103
107
106
-1
Breast/Cervical Cancer
20
45
45
o
Subtotal
$241
$270
$268
-$2
Sexually Transmitted Diseases/TB:
Partnership Grant
$186
$183
$182
-$1
Sexually Transmitted Diseases
22
25
25
0
TB Elimination
17
16
16
0
Subtotal
$225
$224
$223
-$1
Epidemic Services
73
70
69
-1
Prevention Centers
8
8
7
-1
Lead Poisoning
36
36
36
0
Toxic Substances/Disease Registry
69
59
58
-1
Director's Office
3
3
3
0
Subtotal, Program Level
$2,223
$2,256
$2,343
+ $87
Less: PHS Intra-Agency Transfers
Receipts
-98
-101
-113
-12
Total, BA
$2,125
$2,155
$2,230
+ $75
FTE
6,645
6,592
6,592
0
*
Based on levels of the ninth CR, including an incremental policy adjustment.
Comparable Table--includes Bureau of Mines Safety and Health Research comparable figures for FY 1995
and FY 1996.
34
NATIONAL INSTITUTES OF HEALTH
(Dollars in millions)
1995
1996
1997
Request
Actual
Policy
Request
+/- Policy
Program Level
$11,295
$11,950
$12,435
+$485
Budget Authority
11,284
11,939
12,406
+467
Outlays
10,875
10,916
11,949
+1,033
FTE
15,474
15,474
15,474
0
Summary
The FY 1997 request for the National Institutes of Health (NIH) totals $12.4 billion, an
increase of $467 million, or 4 percent, over the FY 1996 level. This includes an additional
$274 million related to the construction of the Clinical Research Center and an additional
$193 million for research activities. NIH has constructed its budget request to minimize the
impact on research project grants of this one-time extraordinary facilities cost.
Our Nation's historic commitment to biomedical research has spawned a steady march of
progress--from the creation of new drugs targeted to specific diseases to the mapping of the
human genome. NIH is the preeminent biomedical and behavioral research organization in
the United States and provides world leadership in these fields through the conduct, support,
and promotion of outstanding research both in its own intramural laboratories and in
partnership with over 2,000 of our country's colleges, universities, and other scientific
institutions. The Institutes and Centers funded by NIH's 24 appropriations are committed to
supporting initiatives having the greatest potential for improving health, reducing the risk of
disease, and ultimately, improving the quality of human life.
Investments in research are the engines of long-term economic progress. This is why, in a
time of limited growth across the Federal Government, this Administration continues to fight
for steady increases in research, as evidenced with this FY 1997 budget request for NIH. In
the past three years, these efforts have paid off, time and time again. They have helped lead
to the discovery of three genes linked to hereditary breast cancer; to the first drug treatment
for severe sickle cell anemia; to the first treatment for the most common form of stroke; to
five new licensed anti-viral drugs for people living with HIV/AIDS; and to three recently
approved protease inhibitors, a whole new class of drugs to combat AIDS. Yet, these
advances were also the culmination of many smaller, less dramatic discoveries over many
years, which demonstrate the need to take the long view of basic research. A panel of
experts sent a tough wake-up call last December when it concluded that the promise of gene
therapy, while awe inspiring, is still miles away from being realized. It reminded us that we
35
must invest more in the foundation of our
NIH FUNDING HISTORY
scientific universe, in the incremental gifts
BA In Billions
of basic science that help us unleash
$14
blockbuster discoveries over time. Stable
$12.4
$11.9
$12
$11.3
and secure funding is needed to nourish the
$10.9
$10
$10.3
seeds of research, to create an atmosphere
$10
in which young investigators are pulled into
$8
science, inspired to stay there, and
$6
ultimately train the next generation of
scientists.
$4
$2
For FY 1997, NIH has identified five
$0
biomedical research areas for emphasis in
1992
1993
1994
1995
1996
1997
which it sees an opportunity to explore a set
of emerging technologies, approaches, and
treatments that will help expand the frontiers of biomedical knowledge and that offer great
promise for curing disease and furthering the Nation's health. NIH plans to spend an
additional $99 million in FY 1997 to emphasize research on the biology of brain disorders;
on new approaches to pathogenesis, the study of disease origins and development; on new
preventive strategies against disease; on genetics of medicine; and on advanced
instrumentation and computers in medicine and research.
Research Project Grants
The highest priority of NIH is the support
NEW/COMPETING RESEARCH PROJECT GRANTS
of basic biomedical research through
(1987-1997 Request)
investigator-initiated research project grants
(RPGs). These grants support new and
1987
7,197
1988
6,867
promising ideas cutting across all areas of
1989
6,157
biomedical research. In FY 1997, the NIH
1990
6,620
budget provides $6.6 billion to support a
1991
6,462
1992
6,768
record total of 25,400 RPGs, including
1993
6,149
6,827 new and competing RPGs. This
1994
6,474
represents an increase of 207 new and
1995
6,858
1996
6,620
competing RPGs, and an increase of 733 in
1997
6,827
the number of total RPGs compared to
0
2,000
4,000
6,000
8,000
FY 1996. In recognition of its importance
to the NIH mission and the current state of
knowledge for future breakthroughs in many disease areas, NIH is devoting 86 percent
(+$166 million) of its non-facilities increases in FY 1997 to the RPG mechanism. Funds for
small business research and technology transfer grants are also slated to rise by $43 million
in FY 1997, in accordance with statutory earmarks. In addition, NIH is continuing its pilot
studies to fine-tune and streamline the peer-review system to ensure that every dollar counts
and that research funds are spent wisely and effectively.
36
FY 1997 NIH BUDGET
Percent Change by Selected Mechanism
Mechanisms
RPGs
2.6%
Training
2.4%
Centers
0.6%
RM&8
0.3%
Other Res.
-0.1%
Intramural
-0.2%
Contracte
-0.9%
-1.5%
-1%
-0.5%
0%
0.5%
1%
1.5%
2%
2.5%
3%
Percents
Clinical Center Revitalization
A major feature of the FY 1997 President's budget for NIH is the commitment to revitalize
both the operations and the facilities of the Warren G. Magnuson Clinical Center. The
Center is the core clinical research facility at NIH and is the largest of its kind in the world.
It provides protocol-specific patient care in support of the intramural research programs
sponsored by most NIH Institutes, and serves as a resource for training clinical investigators.
Each year, an average of 20,000 children and adults from across the country, and in some
instances, the world, are referred to the Clinical Center for experimental treatment and
study. These patients account for approximately 65,000 inpatient days and 70,000 outpatient
visits a year. Nearly 1,000 clinical research protocols are ongoing at the Clinical Center at
any one time. This represents approximately 25 percent of all Federally funded outpatient
visits associated with clinical research and nearly half of all the Federally funded clinical
research beds in the Nation. Funding for the Clinical Center is derived from assessments on
the participating Institutes and Centers.
An "Options Team," created by the Secretary last summer, recently completed a thorough
review of Clinical Center operations. The Options Team has identified numerous processes
and structures that will be reengineered to improve the effectiveness and efficiency of the
Clinical Center. The Team's report recommended fundamental alterations in the way the
Clinical Center is governed, funded, and managed. As a result, a new Board of Governors
is being created to oversee the operations and budgeting of the Clinical Center and to assist it
in developing strategic, long-term planning with measurable objectives. NIH has committed
to ensure that funding for the Clinical Center is made more stable through its Management
Fund assessments and through a budget proposal to make such funds available for two years,
instead of the usual one. Authority is also being sought to allow the Clinical Center to
collect and keep third-party reimbursements for some patient services. Furthermore, as a
result of its intensive self-review, the Clinical Center has initiated steps to reduce regulations,
enhance autonomy, and improve personnel and procurement practices.
In addition, the FY 1997 President's budget for NIH requests a total of $310 million for the
construction of a new, state-of-the-art Clinical Research Center on the NIH campus in
Bethesda, Maryland, to replace the 500-bed hospital component and build some additional
associated laboratories. The current facility was built in the early 1950s and is now
37
physically deteriorated and is becoming functionally obsolete. This budget request is the
product of over seven years of study of NIH's facilities, including critical independent
assessments by the U.S. Army Corps of Engineers in 1991, and the NIH Director's External
Advisory Committee on the NIH Intramural Research Program in 1994 which recommended
the Clinical Center's hospital component be downsized from the current 500-bed capacity to
a 250-bed facility. This new facility will be more efficient to run, more affordable to
maintain, more flexible to staff, and more rapidly adaptable to the clinical challenges of the
future. Together, these operational and facilities improvements will ensure that the Clinical
Center flourishes well into the next century as the national core of clinical research.
Office of AIDS Research
The FY 1997 President's budget again includes all of NIH's AIDS-related
funds--$1.4 billion--in a single account for the Office of AIDS Research (OAR), as these
funds were appropriated in FY 1995. The Director of OAR will transfer AIDS funds to the
Institutes in accordance with the comprehensive plan for AIDS research developed by the
OAR along with the Institutes. The Administration strongly supports a consolidated AIDS
appropriation as a vital part of ensuring a coordinated and flexible response to the AIDS
epidemic.
The AIDS research effort is unlike any
NIH HIV/AIDS-RELATED RESEARCH FUNDING
other program at the NIH in that it spans
BA In Millions
the agendas of every Institute at NIH.
1,600
$1,408
$1,432
Managing this complex and vast research
$1,400
$1,334
$1,296
portfolio requires a unique and
1,200
$1,047
$1,071
unprecedented level of scientific leadership
1,000
to determine research priorities and to
$800
ensure collaboration and minimize
$600
duplication in a united front against this
devastating epidemic. The creation of the
$400
OAR has meant that there is now a single
$200
entity solely devoted to directing and
$0
1992
1993
1994
1995
1996
1997
coordinating the entire NIH AIDS research
program. The consolidated appropriation
also gives the OAR the opportunity to reassess resource allocations across the Institutes based
on scientific developments that may occur after the budget is developed.
The FY 1997 budget includes $1.4 billion for AIDS-related research. This is an increase of
1.7 percent over FY 1996. The requested net $24 million increase for AIDS represents an
additional $53 million for the support of investigator-initiated research projects and small
business grants, with a $29 million decrease in the research contracts, intramural research,
other research, and administrative support mechanisms. This emphasis on investigator-
initiated basic research will allow for a broader search and assessment of the HIV/AIDS
disease itself, which is needed at this time before major new advances in AIDS treatments
and vaccines are likely to occur. Fundamental research on AIDS is also expected to have a
significant impact on research in non-AIDS areas as well, as NIH focuses on better
integrating behavioral and biomedical research programs related to AIDS. Similarly, the
38
construction of the new Clinical Research Center is also expected to greatly benefit AIDS
research; approximately ten percent of research conducted in the current outdated Clinical
Center is related to AIDS.
Other Research Mechanisms
In FY 1997, NIH plans to increase spending for research training by $10 million over
FY 1996, a 2.4 percent increase. This will allow NIH to support 14,749 individual and
institutional full-time research training positions. Within this increase, NIH will provide a
2.2 percent across-the-board stipend increase, the first stipend increase since FY 1994.
All other research mechanisms, excluding research project grants and training, are being held
nearly constant in FY 1997, compared to FY 1996. Research centers are increasing only
0.5 percent, intramural research is decreasing 0.1 percent, and research contracts are
decreasing 0.9 percent, all reflecting NIH's emphasis on investigator-initiated research
project grants in the FY 1997 budget. Research management and support costs are generally
being maintained at the reduced FY 1996 levels.
39
NIH OVERVIEW (by Institute/Center)
(Dollars in millions)
1995
1996
1997
Request
Actual
Policy
Request
+/- Policy
Institute:
NCI
$1,913
$2,025
$2,060
+$35
NHLBI
1,243
1,298
1,321
+23
NIDR
163
171
175
+4
NIDDK
725
760
773
+13
NINDS
628
658
671
+13
NIAID
537
573
584
+11
NIGMS
880
921
937
+16
NICHD
509
534
543
+9
NEI
292
305
310
+5
NIEHS
266
283
289
+6
NIA
432
452
462
+10
NIAMS
228
239
243
+4
NIDCD
167
175
179
+4
NIMH
541
568
578
+10
NIDA
290
305
312
+7
NIAAA
180
188
192
+4
NINR
48
51
52
+1
NCRR
287
322
309
-13
NCHGR
153
169
178
+9
FIC
15
16
16
0
NLM
136
149
154
+5
OD
214
234
227
-7
OAR
1,334
1,408
1,432
+24
Third Party Reimbursements
0
0
18
+18
Subtotal
$11,181
$11,804
$12,015
+$211
B&F
114
146
420
+274
Subtotal, Program Level
$11,295
$11,950
$12,435
+$485
Offsets:
NLM User Fees
-$11
-$11
-$11
$0
Third Party Reimbursements
0
0
-18
-18
Total, BA
$11,284
$11,939
$12,406
+$467
FTE
15,474
15,474
15,474
0
40
NIH OVERVIEW (by Mechanism)
(Dollars in millions)
1995
1996
1997
Request
Actual
Policy
Request
+/- Policy
Mechanism:
Research Project Grants
$6,046
$6,420
$6,586
+$166
[No. of Non-competing]
[17,069]
[18,047]
[18,573]
[+526]
[No. of New/Competing]
[6,858]
[6,620]
[6,827]
[+207]
[Total No. of Grants]
[23,927]
[24,667]
[25,400]
[+733]
SBIR/STTR Grants
$173
$186
$229
+ $43
Centers
1,006
1,038
1,044
+6
Research Training
381
395
405
+10
R&D Contracts
723
771
764
-7
Intramural Research
1,241
1,300
1,297
-3
Research Management/Support
519
481
482
+1
Nat'l Library of Medicine (NLM)
139
152
157
+5
Office of the Director
239
261
252
-9
Women's Health Study [non-add]
[57]
[57]
[57]
[0]
Minority Health Study [non-add]
[58]
[63]
[63]
[0]
Other Research
714
800
781
-19
Buildings and Facilities
114
146
420
+274
Third Party Reimbursements
0
0
18
+18
Subtotal, Program Level
$11,295
$11,950
$12,435
+ $485
Offsets:
NLM User Fees
-$11
-$11
-$11
$0
Third Party Reimbursements
0
0
-18
-18
Total, BA
$11,284
$11,939
$12,406
+$467
FTE
15,474
15,474
15,474
0
41
SUBSTANCE ABUSE AND MENTAL HEALTH
SERVICES ADMINISTRATION (SAMHSA)
(Dollars in millions)
1995
1996
1997
Request
Actual
Policy*
Request
+/-Policy
Program Level/BA
$2,195
$1,854
$2,098
+$244
Outlays
2,444
2,105
2,024
-81
FTE
649
649
649
0
*
Based on levels of the ninth CR, including an incremental policy adjustment.
Summary
The FY 1997 budget request for the Substance Abuse and Mental Health Services
Administration (SAMHSA) totals $2.1 billion. This request will provide important substance
abuse and mental health services to thousands of pregnant women and their children, high
risk youth, and other underserved Americans. SAMHSA is the Department's lead agency for
mental health and substance abuse treatment and prevention. Given the heightened attention
to the drug abuse prevention and treatment needs in the country, SAMHSA has devoted
considerable effort to identify the most effective and efficient treatment and prevention
programs and disseminate that knowledge to the States through the Substance Abuse
Performance Partnership Block Grant.
The FY 1997 budget continues to pursue State Performance Partnerships in the mental health
and substance abuse areas. While similar in concept to the current block grant program, the
Performance Partnerships will require fewer earmarks, increase State flexibility, and increase
emphasis on outcomes. In addition, SAMHSA will provide support to a wide array of
demonstration efforts through the Knowledge Development and Application (KDA) program.
New focuses in FY 1996 and FY 1997 will include: managed care, early childhood,
emerging issues, co-occurring disorders, criminal justice, changing systems, and practice
standards and guidelines.
Making Substance Abuse Prevention and Treatment Work
The annual cost of substance abuse in the United States--in terms of unnecessary health care,
extra law enforcement activity, auto crashes, crime, and lost productivity--is more than
$166 billion. The chronic drug user accounts for the bulk of illicit drugs consumed, and is a
significant contributor to crime and violence. These statistics are indicative of a compelling
need to identify effective and efficient approaches to address the nation's most costly public
health problems. To respond to this crisis, SAMHSA's FY 1997 budget focuses on the
42
treatment of substance abusers--with a
special focus on groups which use a
Compare the Costs: Yearly Average
significant share of treatment resources,
Treatment Cost To Society for One Adult
contribute disproportionately to the societal
$20,000
$10,880
costs of drug abuse, and for whom little
improvement has been made.
$16,000
614,800
The FY 1997 request for substance abuse
$10,000
prevention and treatment totals $1.6 billion.
This includes $1.3 billion for the Substance
85,000
Abuse Performance Partnership Block
88,000
$2,300
Grant. This program will give States
80
Correctional
Residential
Outpatient
Methadone
maximum flexibility to develop treatment
Institution
Treatment
Treatment
Treatment
Sourse. Amer lean Correctional Assec
systems that ensure access, quality, and
improved outcomes for substance abusers,
particularly in areas of high incidence and prevalence. The FY 1997 request also provides a
total of $352 million for substance abuse prevention and treatment demonstration activities.
New funding for treatment demonstrations will address issues that enhance access to drug
treatment through managed care, client and family-oriented substance abuse services, and
effective drug treatment.
SAMHSA funded programs have had great
Criminal Activity Drops Significantly
success at minimizing the costs to society as
Year After Substance Abuse Treatment
a result of effective and efficient treatment
Sourse DAL DATA. 1994
35%
and prevention services for substance
abusers. For example, SAMHSA's Center
30%
for Substance Abuse Treatment (CSAT) has
20%
used discretionary grants to support a range
of programs that have shown results. In
20%
W before treatment
California, a study of treatment
Yr after treatment
16%
68.3%
effectiveness showed significant decreases
Drop
10%
in criminal activity after treatment for
63.3%
Drop
615%
alcohol and other drug abuse disorders:
5%
Drop
74.5%
Drop
$7.14 in savings for every dollar invested in
0%
dele/holped
Box for
law
Used weepen
Boal drugs
or drugs
bouse/
or forms
treatment. In Colorado, a follow-up study
vahicle
found that of the clients who had been
arrested in the two years prior to treatment
admission, 94 percent had not been
rearrested for driving under the influence and about 80 percent had no arrests for other
offenses during the follow-up period. Finally, the Miami Coalition for a Drug Free
Community used SAMHSA funds to support collaboration between law enforcement and
family/neighborhood task forces that were instrumental at reducing crime by 24 percent,
making over 8,000 arrests, and identifying and destroying crack houses.
43
Mental Health Services
SAMHSA's FY 1997 budget request of $419 million supports the Federal Government's role
in the generation of knowledge and dissemination of research results on improving access to
quality mental health services. The FY 1997 request maintains most Center for Mental
Health Services (CMHS) programs at the FY 1995 enacted level. Included in the request is
$275 million for the Mental Health Performance Partnership Block Grant. Most of the
funding will be used to support existing grants. An additional $10 million over the FY 1995
enacted level is requested to fund FY 1997 Knowledge Development and Application (KDA)
activities relating to mental health.
Future Plans--Managed Care Initiative
In 1995, nearly 60 percent of Americans (107 million) with private health insurance were
enrolled in some type of specialty managed behavioral health program. States are moving
aggressively to place large numbers of persons who have no private health insurance into
mandatory managed care plans. For persons with mental illness and substance abuse
disorders, the rapid growth of managed care is profoundly altering the public and private
substance abuse and prevention system. The extent and impact of these changes has not been
measured.
In 1997, SAMHSA will continue to expand a managed care initiative to address the needs
and concerns of the mentally ill and those with substance abuse problems. SAMHSA will
target at least $20 million of FY 1997 Knowledge Development and Application (KDA)
funding resources to managed care issues. These initiatives include: improving quality,
monitoring and reporting; establishing quality and performance measures; strengthening
public-private partnerships; improving consumer information; streamlining administrative
processes; and enhancing programs geared toward the special needs of this vulnerable
population.
Studies within the publicly funded managed care network have shown signs of some success.
For example, the Massachusetts Medicaid program has reduced costs by 22 percent below
projections, based on past experience. The managed care vendor achieved savings by
diverting hospital admissions to outpatient care, and by negotiating substantial price
reductions with hospitals. For persons with substance abuse disorders, inpatient hospital
treatment was cut by 61 percent, while treatment in freestanding detoxification centers,
methadone counseling, and dosing increased substantially. The challenge here is to ensure
that the goals of quality and access are not sacrificed and savings are achieved through a
managed care system.
44
SAMHSA OVERVIEW
(Dollars in millions)
1995
1996
1997
Request
Actual
Policy*
Request
+ /-Policy
Substance Abuse:
Prevention KDA
$238
$106
$176
+$70
Treatment KDA
216
106
176
+70
Performance Partnership Grant
1,234
1,205
1,272
+67
Treatment Capacity Expansion
7
0
0
0
Subtotal, Substance Abuse
$1,695
$1,417
$1,624
+ $207
Mental Health:
Mental Health KDA
$52
$37
$62
+ $25
Training and AIDS Training
1
1
0
-1
Children's Mental Health
60
59
60
+1
Performance Partnership Grant
275
264
275
+ 11
Homeless PATH Grants
29
0
0
0
Protection and Advocacy
22
20
22
+2
Subtotal, Mental Health
$439
$381
$419
+ $38
Program Management
$61
$56
$55
-$1
Forfeiture Fund (non-add)
(14)
0
0
0
Total, BA
$2,195
$1,854
$2,098
+ $244
FTE
649
649
649
0
*
Based on levels of the ninth CR, including an incremental policy adjustment. The Policy Level also
reflects the $200 million transfer proposed by the Senate from the Safe and Drug Free Schools Act
program of the Department of Education for youth substance abuse prevention programs in schools and
communities.
45
AGENCY FOR HEALTH CARE POLICY AND RESEARCH
(Dollars in millions)
1995
1996
1997
Request
Actual
Policy*
Request
+/-Policy
Program Level
$159
$126
$144
+$18
Budget Authority
141
80
90
+10
Outlays
139
129
97
-32
FTE
267
267
267
0
*
Based on levels of the ninth CR, including an incremental policy adjustment.
Summary
The FY 1997 request for the Agency for Health Care Policy and Research (AHCPR)
provides a program level of $144 million. Consistent with a Department-wide HHS Survey
Integration Plan, AHCPR will fully fund the Medical Expenditure Panel Survey (MEPS)--
replacing the National Medical Expenditure Survey (NMES)--at $45 million, as well as
continue to fund its highest priority ongoing research commitments.
AHCPR directly contributes to improving the management of this nation's health care
enterprise. Results of its health services research and clinical practice guidelines are used
every day by health care providers working to improve quality of care while managing the
financial bottom line. Its data collection and analysis are important to health policy analysis
and help guide the decisions made by those steering the future of this nation's health care
industry.
AHCPR works in partnership with the private sector in determining which medical
interventions work best and provide the most value for our health care dollar in the day-to-
day practice of medicine. In addition, AHCPR research addresses the effectiveness and cost-
effectiveness of the organization, financing, and delivery of health services.
Research on Health Care Outcomes and Quality
The FY 1997 request for the Research on Health Care Outcomes and Quality program
(HCOQ), formerly the Medical Treatment Effectiveness program (MEDTEP), is $48 million.
At this level, AHCPR will continue to fund high priority continuation projects in outcomes
research, particularly for conditions prevalent in the Medicare and Medicaid populations.
HCOQ research helps consumers and providers make more informed choices about health
46
care. Part of that effort is to first determine what works in clinical practice through
outcomes and effectiveness research and then educate consumers and providers on research
results, particularly through the clinical practice guidelines program.
To cite a recent example of outcomes research, a grant to Duke University showed
appropriate anticoagulant therapy could prevent strokes and save $600 million annually,
cutting the number of strokes each year from 80,000 to 40,000. Implementation of AHCPR
findings in just 20 percent of patients for the following conditions could save health care
costs as follows (1996-2002): acute low back pain ($1.2 billion); stroke prevention
($832 million); prostate disease ($770 million); and acute pain management ($599 million).
Other HCOQ research includes:
Emergency Department Triage for Suspected Acute Cardiac Ischemia (ACI): Some
3.5 million of the 7 million people with ACI's who present to emergency departments
annually are hospitalized, yet 50 percent of those are found not to have ACI and
another 7 percent are sent home erroneously. This multi-center prospective controlled
clinical trial will evaluate the potential of scanning aids to improve the accuracy of
diagnosis of ACI.
Pediatric Asthma Care: This two-stage randomized controlled clinical trial is
assessing the cost-effectiveness of comprehensive intervention for pediatric and
adolescent asthma patients. The major outcomes to be measured include cost,
functional status, results of pulmonary function tests, and changes in medication use.
Pelvic Inflammatory Disease (PID): This project is testing the most effective
treatment approach for PID. This condition affects more than one million women a
year and can result in infertility, ectopic pregnancies, and chronic pelvic pain. The
cost of treating PID and its complications is estimated at $4 billion annually.
Strategies for Care of the Very Low Birthweight Infant: Neonatal intensive care has
been the main reason for reduced infant mortality, but with success has come
escalating medical treatment costs and increasing burdens of long-term functional
impairments and disabilities. This study, which is scheduled for completion in 1997,
addresses the outcomes, costs, and utilities of neonatal intensive care.
Improved methodologies have been developed for the second round of Patient Outcomes
Research Teams (PORT II). Areas of research in FY 1997 include the care, cost and
outcomes of local breast cancer and improving the cost-effectiveness of care for depression.
Pharmaceutical outcomes research projects will be continued in FY 1997, and will study the
efficacy and cost-effectiveness of prescription drugs and related pharmaceutical interventions
for treating clinical conditions. One recent example of this research is a grant to Vanderbilt
School of Medicine that showed requiring prior authorization from the Tennessee Medicaid
program in order to prescribe more costly arthritis medication saved $12.8 million over
two years, without causing the substitution of other, more toxic drugs or increased use of
medical services.
47
During FY 1997, AHCPR will support seven Research Centers on Minority Populations,
focusing on which clinical strategies are best for clinical conditions with the greatest
prevalence among African-Americans, Latinos, Asian and Pacific Islanders, American
Indians, and/or Alaska Natives. Conditions being studied include high blood pressure,
kidney disease, tuberculosis, low birthweight, substance abuse, and certain cancers.
AHCPR's clinical practice guidelines program enhances the quality, appropriateness, and
effectiveness of health care. AHCPR has arranged for the development of 22 science-based
clinical practice guidelines that address some of the most significant health care problems
facing Americans. Seventeen of these guidelines have been released ranging in subject from
treatment of acute postoperative pain to cardiac rehabilitation. This month AHCPR released
an update of the Urinary Incontinence in Adults guideline, which reaffirms the work of the
1992 panel and shows that urinary incontinence is treatable and those afflicted need not
suffer in silence. AHCPR's guidelines not only reduce medical treatment uncertainty, they
can directly benefit consumers and medical practitioners by improving patient outcomes and
quality of life. The guidelines can also benefit the nation by eliminating or reducing the use
of medical tests and therapies that do not work or are unnecessary.
Research on Health Care Systems Costs and Access
The FY 1997 request includes $49 million for the Health Care Systems Cost and Access
program (HCSCA), formerly the Research on Health Care Costs, Quality and Access
program. HCSCA research develops the analyses and tools needed to improve the
functioning of the health care system. At this level, AHCPR will fund high priority
continuation projects in a variety of areas, including consumer decision making; the health
care marketplace; primary care; managed care; rural health services; and AIDS health
services.
AHCPR will continue to support a major initiative to assist consumers in selecting high
quality health plans and services, the Consumer Assessments of Health Plans Study
(CAHPS). Surveys by objective, non-government polling firms have shown that most
Americans would like to have more information to help them choose hospitals, doctors, and
health care plans. CAHPS brings together the nation's top experts in patient satisfaction and
survey research to develop and test the best methods for measuring consumers' satisfaction
with their health plans and methods for getting the results to consumers.
Also, research on market forces in a changing health care system will be sustained. These
projects are examining how changes in the structure of defined markets have affected the way
health care providers produce and deliver care and the price, distribution, and quality of
services available.
The request will maintain support for research on primary care, the most frequent site of
health care delivery, and the source of most referrals to secondary and tertiary care.
Examples of primary care research include a study testing the effect of an interactive CD
designed to decrease cervical cancer by improving the frequency and quality of screening for
patients in community health centers.
48
Managed care research supported by AHCPR provides a greater understanding of the rapid
financial and organizational changes occurring in the U.S. health care system. An example
of managed care research underway is a study showing that managed care patients spent
two fewer days in an intensive care unit than patients with fee-for-service health insurance,
with the average stay for managed care patients costing $8,000 less, with no difference in
mortality or ICU readmission between the two groups.
AHCPR will continue to fund five specialized centers for rural health services demonstrations
in Iowa/Nebraska, Maine, West Virginia, Arizona, and Oklahoma. AHCPR also will
continue to support the HIV Cost and Services Utilization Study (HCSUS), a large-scale
study that provides vital information on costs and services resulting from health care delivery
to the HIV-infected persons.
Health Insurance and Expenditure Survey
The FY 1997 request includes $45 million, an increase of $30 million over FY 1996, to
support the second year of the Medical Expenditure Panel Surveys (MEPS). This investment
will fund costs associated with the move from the development phase and early data
collection phase of the surveys to the full data collection phase. The field work for the
household and nursing home surveys started in FY 1996. In FY 1997, these surveys both
continue with the household survey intensifying, plus the health insurance plans survey, the
medical provider plan survey, and the national health insurance survey will all start data
collection. During the full data collection phase, all five surveys will be in the field where
extensive interviews are conducted by employing such innovations as computer assisted
personal surveys that will greatly improve the timeliness of MEPS results. Early access to
data for analysis will allow health care policy makers to base decisions on more current
information than has been available in the past.
No surveys other than MEPS provide the Federal Government or the private sector with
detailed information regarding the health care services used by American families and
individuals; the cost, scope, and breadth of private health insurance coverage held by and
available to the U.S. population; and the specific services that are purchased through
out-of-pocket and/or third-party payments. This information is essential for developing
national and regional estimates of the impact of changes in financing, coverage, and
reimbursement policy, and estimates of who benefits and who bears the cost of a change in
policy.
Under the Department's Survey Integration Plan, important linkages with other HHS surveys
have been established that will help keep survey costs lower than originally projected--and
improve data collection and analysis of health care expenditures and health insurance in the
U.S. MEPS builds upon the strengths of the 1977 and 1987 National Medical Expenditure
Survey (NMES) and streamlines the Department's data collection efforts. Unlike NMES,
which developed its own large sampling frame of families to interview, MEPS relies upon an
existing nationally representative sampling frame developed by the National Center for
Health Statistics (NCHS) and eliminates duplication that existed with the Health Care
Financing Administration (HCFA) in surveying the over-65 population. MEPS also
incorporates and links the National Health Interview Survey (NHIS) with the survey
49
components of MEPS.
MEPS, which began in FY 1994, will now include a national employer health insurance
survey component. The purpose of the employer health insurance survey is to obtain
national and state-specific estimates of the availability of health insurance at the workplace,
type of coverage provided by employers, and the associated costs of coverage.
Analytical work on the data collected will begin in FY 1997 and is expected to be complete
by FY 2001. As part of the Department's Survey Integration Plan, MEPS will no longer be
a periodic annual survey. Instead it will be converted to an ongoing continuous
survey--resulting in a continuous resource for those dependent on these data to manage this
nation's health care industry. Over time, MEPS will provide more comprehensive data for
public and private sector decision makers.
50
AHCPR OVERVIEW
(Dollars in millions)
1995
1996
1997
Request
Actual
Policy*
Request
+/-Policy
Research on Health Care
Outcomes and Quality
.
$80
$55
$48
-$7
Research on Health Care
Systems Cost and Access
62
54
49
-5
Health Insurance &
Expenditure Survey
15
15
45
+30
Program Support
2
2
2
0
Subtotal, Program
Level
$159
$126
$144
+$18
Less Transfers:
PHS Intra-agency
-18
-46
-54
-8
Total, BA
$141
$80
$90
+$10
Medicare Trust Funds
[Non add]
[6]
[3]
[6]
[+3]
FTE
267
267
267
o
*
Based on levels of the ninth CR, including an incremental policy adjustment.
51
HEALTH CARE FINANCING ADMINISTRATION
(Dollars in millions)
1995
1996
1997
Request
Actual
Policy*
Request
+/-Policy
Budget Authority
$262,272
$285,566
$320,107
+$34,541
Outlays**
248,920
272,475
295,675
+23,200
FTE
4,100
4,100
4,100
0
* Based on levels of the ninth CR, including an incremental policy adjustment.
** Includes non-HCFA administrative costs, and is net of offsetting receipts.
Summary
The FY 1997 budget request for
HEALTH CARE FINANCING ADMINISTRATION
the Health Care Financing
FY 1997 Net Outlays
$296 Billion /1
Administration (HCFA) is
$296 billion (net of offsetting
Hospital Insurance
receipts) for Medicare and
Benefits:
Medicaid benefits and operating
$121 Billion
(41%)
costs, an increase of $24 billion
over FY 1996 (see Figure 1 for
Supplementary
Medical
the distribution of spending).
Insurance Benefits:
$65 Billion
Spending for the Medicare and
(22%)
Medicaid programs represents
Federal
84 percent of the total HHS
Administration:
Medicaid: 12
budget for FY 1997.
$4 Billion
$108 Billion
(1%)
(36%)
The Medicare and Medicaid
/1 Numbers may not add due to rounding
/2 Includes Benefits and State and Local Administration
budget includes legislative
proposals that reduce spending
by $3 billion in FY 1997.
Figure 1
Medicare and Medicaid
combined will pay for the health care costs of approximately 72 million elderly, disabled and
economically disadvantaged Americans in FY 1997 (individuals eligible for both Medicare
and Medicaid are not double counted in this figure). In FY 1997, the number of people
served by these programs will increase by about 2 million, or 2.3 percent, over FY 1996.
Slightly more than a quarter of all Americans will receive Medicare or Medicaid services in
FY 1997.
52
MEDICARE
Summary
Medicare is a Federal health insurance program for people age 65 or older and people under
age 65 who are disabled or suffer from end-stage renal disease (ESRD). In FY 1997, the
program will serve approximately 38.1 million eligible individuals. Medicare consists of two
parts:
Part A--Hospital Insurance (HI)
Pays for inpatient hospital care, certain inpatient care furnished in skilled nursing
facilities, home health care and hospice care. The HI program is funded through the
HI Trust Fund. The Fund receives most of its income from the HI payroll tax
(2.9 percent of payroll, split between employers and employees).
Part B--Supplementary Medical Insurance (SMI)
Pays for medically necessary physicians' services, outpatient hospital services, treatment
for ESRD, laboratory services, durable medical equipment and certain other medical
services and supplies. The SMI program is funded through the SMI Trust Fund. The
Fund receives income primarily from two sources: a general revenue transfer and
premiums paid by enrollees.
Total Medicare benefit outlays in FY 1997, including the effect of legislative proposals, are
estimated at $206 billion, 6.6 percent higher than FY 1996 estimated benefit outlays. This
increase in outlays reflects projected growth in beneficiary enrollment, service utilization and
inflation.
Strengthening Medicare
The President's Medicare plan strengthens and improves the program, reducing spending by
a net $124 billion over seven years and guaranteeing the solvency of the trust fund for more
than a decade. Specific reforms give seniors more choices among private health plans,
make Medicare more efficient and responsive to beneficiary needs, attack fraud and abuse
through programs praised by law enforcement officials, cut the growth rate of provider
payments, and hold the Part B premium at 25 percent of program costs.
Provider Payment Reforms and Program Savings
Hospitals: The budget reduces the annual inflation increase or "update" for payment for
inpatient care and adjusts payments for capital. It also reforms the payment method for
outpatient departments while protecting beneficiaries from increasing charges for those
services.
Managed Care: The budget reforms payments by using reasonable rate-of-growth limits
53
on updates for managed care payments and reducing the current geographic variation in
payments.
Physicians: The budget reforms physician payments by paying a single update for all
physicians and replaces current "volume performance standards" with a sustainable
growth rate.
Home Health Care/Skilled Nursing Facilities: The budget implements a series of
interim payment reforms before the establishment of fully prospective payment systems
for home health care and skilled nursing facilities.
Fraud and Abuse: The budget introduces aggressive and comprehensive policies to
help stamp out Medicare waste, fraud, and abuse, and extends and enhances Medicare
secondary payor policy to ensure that Medicare pays only when it should.
Other Providers: The budget freezes updates for durable medical equipment and
ambulatory surgical centers and reduces payments for oxygen.
Beneficiaries: The budget continues, but does not increase, the requirement that
beneficiaries pay 25 percent of Part B costs.
Provisions to Improve Rural Health Care
The President's plan enhances access to, and the quality of, health care in rural areas. To do
so, it extends the Rural Referral Center program, directs Medicare reimbursement for nurse
practitioners and physician assistants, improves the Sole Community Hospital program, and
expands the Rural Primary Care Hospital program and provides grants to promote
telemedicine and rural health outreach.
Program Improvements that Expand Choices and Add Preventive Benefits
The President's plan transforms the traditional fee-for-service program from a bill-paying
insurance program into a responsive health plan by giving Medicare authority to adopt many
of the purchasing and quality techniques pioneered by private sector payors.
The budget also expands and improves Medicare managed care by:
ensuring beneficiary protections while increasing the types of plans--including Preferred
Provider Organizations (PPOs) and Provider Sponsored Networks (PSNs)--available to
seniors; and
instituting a coordinated open enrollment process--similar to that used by the Federal
Employees Health Benefits Plan (FEHBP)--during which beneficiaries use comparative
information to choose among managed care and supplemental insurance options.
In addition, the budget expands coverage of preventive benefits to include annual
54
mammograms and the elimination of mammography coinsurance, colorectal cancer screening,
and increased payments for flu shots. Finally, the budget introduces a respite care benefit to
provide some relief for families caring for relatives with Alzheimer's disease.
Medicare Baseline
The President's budget estimates that Medicare benefits will be $1.6 trillion from 1997-2002.
This represents a decrease in the estimate of $5.3 billion over the six years compared to
Mid-Session Review (MSR), a drop of 0.3 percent. However, this reflects an increase of
$37 billion in Hospital Insurance (HI or Part) balanced by a decrease of $42.3 billion in
Supplementary Medical Insurance (SMI or Part B). While economic changes brought the
estimate for Medicare spending down from the MSR, technical changes worked in the
opposite direction to increase the estimate of outlays.
The $7 billion upward technical re-estimate for the period 1997-2002 was comprised of
the following baseline adjustments:
- The estimated Part A increase of $41.4 billion hinged on higher projected outlays for
inpatient services, skilled nursing facility services, and home health services. The
largest estimated increase, both in percentage and actual dollars, occurred in home
health services, with a technical increase of over $27 billion. The increases were
partially offset by a lower estimate for hospice services, which dropped about $8
billion.
- The estimated Part B technical decrease of $34.3 billion largely offset the Part A
increase. The Part B decrease was comprised of lower spending projections for
physician, outpatient, and group practice outlays. Estimates for both independent labs
and Part B home health outlays increased by a small amount.
The economic decrease of $12.3 billion for the period 1997-2002 incorporated the
following baseline adjustments:
- In Part A, new economic assumptions decreased the baseline by $4.4 billion due to
decreases in growth assumptions for wages and prices.
- In Part B, new economic assumptions decreased the baseline by $7.9 billion, due
almost solely to anticipated decreases in the Medicare economic index. This index is
also sensitive to changes in wages and prices.
55
MEDICARE OVERVIEW
(Beneficiaries in millions)
1995
1996
1997
+/-
Persons Enrolled:
Hospital Insurance
(HI Part A)
36.9
37.5
38.1
+0.6
Supplementary Medical
Insurance (SMI Part B)
35.5
36.0
36.5
+0.5
(Outlays in millions)¹
1995
1996
1997
Request
Actual
Policy
Request
+ /-Policy
Current Law:
HI Benefits
$113,403
$124,841
$136,799
+$11,958
SMI Benefits (including ESRD)
63,482
69,055
76,287
+7,232
Peer Review Organizations
190
268
270
+2
Subtotal, Med. Ben. w/PROs
$177,075
$194,164
$213,356
+$19,192
HCFA Admin/Research
$2,109
$2,137
$2,191
+$54
Intergovernmental Transfer
--
$319
--
-319
SSA/Non-HCFA Admin
913
968
1,009
+41
Subtotal, Admin
$3,022
$3,424
$3,200
-$224
Total, Current Law Outlays
$180,097
$197,588
$216,556
+$18,968
Proposed Legislation:
Part A Savings
-
-$151
-$14,184
-$14,033
Part B Savings
--
-10
7,734
7,744
Total, Outlays, Net
Proposed Law
$180,097
$197,427
$210,106
+$12,679
Offsetting Receipts
-$20,242
-$19,842
-$20,287
-$445
Effect of P.L. on
Offsetting Receipts²
--
--
288
+288
Total, Net Outlays3
$159,855
$177,585
$190,107
+$12,522
1
Numbers may not add due to rounding.
2
Offsetting receipts include premiums collected from beneficiaries under Medicare Parts A and B.
3
Total Net Medicare Outlays equal current law outlays minus the impact of proposed legislation and
offsetting receipts. Total does not include the Clinical Laboratory Improvement Amendment (CLIA) or
the HMO Loan Fund.
56
MEDICAID
Summary
In FY 1997, Medicaid will provide grants to States for the medical care of about 39 million low-
income individuals. The Federal share of Medicaid payments is expected to reach $102 billion.
This is a $7.4 billion (7.8 percent) increase over projected FY 1996 spending. The President
has recently submitted a comprehensive Medicaid reform package, which streamlines the
program while preserving the guarantee of health and long-term care coverage for the most
vulnerable Americans.
Enhancing State Flexibility
States have considerable flexibility in structuring the Medicaid programs, including determining
provider payment rates, certification standards, and developing alternative health care delivery
programs. In addition, waivers from various portions of the broad Federal guidelines are also
available to States.
Freedom-of-choice waivers allow States to implement cost-effective systems of care, such as case
management and competitive bidding arrangements. Home and community-based service
waivers allow States to cover community-based care as an alternative to institutionalization.
States have also begun to restructure eligibility and coverage under Medicaid through the use
of Section 1115 demonstration waivers. Under these demonstrations, States acquire savings by
incorporating managed care concepts, redirecting uncompensated care payments, and
consolidating State health programs. States use these savings to expand coverage to previously
uninsured populations. States are using Section 1115 waivers to reform health care by
expanding coverage without increasing the amount the Federal Government would have
otherwise spent. Since 1993, this Administration has approved twelve Section 1115
demonstrations, and is committed to working cooperatively with additional States to support
innovative ideas. Delaware, Vermont, Hawaii, Oregon, Tennessee, Minnesota, Oklahoma¹,
and Rhode Island are currently operating approved demonstrations, extending health care
coverage to about 672,000 Americans who were otherwise not covered by health insurance.
Florida, Kentucky, Massachusetts, and Ohio have approved waivers but have not begun
operation of their demonstrations. Once fully implemented, these twelve demonstrations could
extend coverage to 2.2 million individuals, at no increased cost to the Federal Government.
Legislative Proposal
The President's plan for Medicaid reforms the program but preserves the guarantee of health and
long-term coverage for the most vulnerable Americans. It saves $59 billion over seven years
responsibly, by limiting spending on a per-person basis (a "per capita cap") and reducing
1 Oklahoma has no expansion population in its 1115 waiver.
57
Disproportionate Share Hospital payments and retargeting them to hospitals that serve large
numbers of Medicaid and uninsured patients.
The plan provides special payments for States to transition into the new system, and to meet the
most pressing needs. It also gives States unprecedented flexibility to administer their programs
more efficiently. Finally, this plan retains current nursing home quality standards and continues
to protect the spouses of nursing home residents from impoverishment.
The President's Medicaid reform proposal would also give States more flexibility in managing
their Medicaid programs. Changes include:
Boren Amendment: The plan repeals the so-called "Boren amendment," eliminating
Federal provider payment requirements for hospitals and nursing homes.
Managed care: The plan allows States to enroll beneficiaries in managed care without
Federal waivers.
Home- and community-based care: The plan allows States to provide services in home-
and community-based settings to people who need long-term care without having to seek
Federal waivers.
Coverage expansions without waivers: The plan enables States, without waivers, to
expand coverage to any person in a family with income less than 150 percent of the Federal
poverty line.
Background
Medicaid is a voluntary program, initiated and administered by the States. State expenditures
for medical assistance are matched by the Federal Government using a formula that measures
per capita income in each State relative to the national average. Current matching rates for
FY 1996 are projected to range from 50 to 77 percent for medical assistance payments and from
50 to 100 percent for administrative costs. The Federal matching rate on average is
approximately 57 percent.
Most individuals' eligibility for Medicaid is based on qualifying under the cash assistance
programs of Aid to Families with Dependent Children (AFDC) or Supplemental Security Income
(SSI). All AFDC and most SSI recipients, commonly referred to as the "categorically eligible,"
are covered under State Medicaid programs. States cover some individuals not eligible for
AFDC or SSI (e.g., higher income persons in institutions, low-income pregnant women and
children, and aged, blind and disabled persons below the poverty line). States may also cover
"medically needy" individuals. Such persons would meet the categorical eligibility criteria, but
have too much income or resources. By incurring medical expenses, these persons may spend
down to the medically needy standard.
States are required to provide a core of 13 services to all eligible recipients. Those mandatory
Medicaid services include inpatient and outpatient hospital care, health screening, diagnosis and
treatment to children, family planning, physician services and nursing facility services to
58
individuals over 21. States may also elect to cover any of over 30 specified optional services,
which include prescription drugs, clinic services, and services provided in intermediate care
facilities for the mentally retarded.
Medicaid covers children under the age of six and pregnant women whose family income does
not exceed 133 percent of the Federal poverty level. Medicaid coverage of children aged
6 through 18, born after September 30, 1983, whose family income does not exceed 100 percent
of the Federal poverty level, is being phased in. By 2002, all children under the age of 19
living below the poverty level will be covered by Medicaid. In addition, Medicaid pays
Medicare premiums and cost sharing for Medicare coverage of certain poor seniors and disabled
individuals eligible for Medicare, also referred to as Qualified Medicare Beneficiaries (QMBs).
The President's Medicaid reform proposal would preserve these important protections and
expansions.
Federal Medicaid outlays rose dramatically from FY 1989 through FY 1992, at a 25 percent
average annual rate. However, outlay growth slowed to less than 12 percent in FY 1993,
followed by 8 percent growth in FY 1994. The decline in the rate of Medicaid increases is due
to many factors, including legislative changes (such as Limits on Provider Specific Taxes and
Donations), decreases in the projected growth of SSI caseloads, and States' efforts to control
costs. The President's plan maintains these appropriate limitations.
59
MEDICAID OVERVIEW
(Recipients in thousands)
1995
1996
1997
+/-
Beneficiaries:
*
Aged 65 and Over
4,234
4,389
4,553
+164
Blind and Disabled
6,009
6,341
6,626
+285
Needy Adults
7,774
8,041
8,260
+219
Needy Children
17,574
18,169
18,659
+490
Other
576
576
576
+--
Unduplicated Total
36,168
37,516
38,674
+1,158
(Outlays in millions)
1995
1996
1997
Request
Actual
Policy
Request
+/-Policy
Current Law:
Benefits
$85,194
$90,480
$97,653
+$7,173
State and Local
Administration
3,491
3,965
3,927
-38
Vaccines for Children
185
213
469
+256
Survey and Certification
137
154
163
+9
State Medicaid Fraud
Control Units
63
79
82
+3
Total, Current Law*
$89,070
$94,892
$102,294
+$7,403
* Numbers may not add due to rounding.
60
PROGRAM MANAGEMENT
Summary
HCFA's FY 1997 Program Management budget request is $2,202 million, a 3.3 percent
increase over estimated FY 1996. The Program Management account provides resources for
administering the Medicare and Medicaid programs. Program Management supports the
following activities: Medicare Contractors; Federal Administration; Medicare Survey and
Certification; and Research, Demonstrations and Evaluation.
While workloads have continued to increase every year, the Program Management budget
has remained relatively flat or decreased, requiring HCFA to find more efficient methods to
accomplish its mission and its goals as established in its strategic plan. HCFA is attempting
to fulfill a significant part of this mission with the development and implementation of the
Medicare Transaction System (MTS), HCFA's state-of-the-art information management
initiative. MTS will consolidate the current system of 77 claims-payment contractors
utilizing nine shared computer systems into one system operated by three contractors using
standardized data elements. This initiative will achieve substantial administrative savings
through the use of new technology, consolidation of processing systems and standardized
data. MTS will affect all aspects of Medicare, positioning HCFA to reengineer itself more
productively for the challenging times ahead.
Medicare Contractors
The Medicare program is administered through private organizations, usually private
insurance companies, which are referred to as contractors. Contractors' responsibilities
include processing claims and making benefit payments, performing certain functions to
ensure the appropriateness of Medicare payments and to protect the Medicare Trust Funds,
developing management improvements called productivity investments, and responding to the
needs of its many customers and stakeholders, the Medicare beneficiaries and the provider
community.
Despite a growing investment in MTS and an increasing claims workload, the Medicare
Contractor budget will increase by only 0.6 percent, from $1,604.2 million in FY 1996 to
$1,614.2 million in FY 1997. The four key contractor activities are claims processing,
beneficiary and provider services, payment safeguards and productivity investments.
Approximately 53 percent of the FY 1997 contractor budget request, or $849 million, has
been designated for claims processing, a 2 percent decrease from FY 1996. HCFA's success
in controlling processing costs has resulted in reduced unit costs of processing claims,
allowing the agency to process an expected 861 million claims in FY 1997 within statutorily
limited processing times. This workload level represents a 3.4 percent increase over revised
FY 1996 estimates. HCFA anticipates that increased managed care enrollment will limit
growth in claims and billings.
Beneficiary and provider services comprise 16 percent of the Medicare Contractors' FY 1997
request, or $254 million. This amount will maintain funding for the Medicare beneficiary
61
toll-free telephone lines, timely hearings and reconsiderations, prompt responses to provider
and beneficiary inquiries, provider education and training efforts, and the Medicare
participating physicians program. HCFA will continue its innovative use of audio response
units (ARUs) for telephone inquiries, as well as continuing its use of the telephone to
conduct hearing reviews and reconsiderations. These activities demonstrate HCFA's
combined efforts toward more cost-effective management and a greater commitment to
providing better customer service.
This request provides $396 million for payment safeguard activities to prevent and recover
inappropriate Medicare payments, an amount virtually equal to that appropriated for the last
three years. These activities include financial audits, medical and utilization reviews, and the
identification of Medicare beneficiaries who have other insurance plans with primary
responsibility for paying claims. Funds are also earmarked to support carrier efforts in
detecting, developing and investigating program fraud and abuse. HCFA expects to generate
$5.6 billion in savings to the Trust Funds with its $396 million investment in payment
safeguard activities in FY 1997, a 14 to 1 return on investment.
Building upon the Department's current efforts in Operation Restore Trust to combat health
care fraud and abuse, HCFA currently has legislation before Congress to provide a stable
and reliable funding source for these activities under the direct spending budget. HCFA's
long-term strategy to fund current Medicare payment safeguard activities is the Medicare
Benefit Integrity System (MBIS). MBIS removes these activities from the discretionary
account and moves them to the entitlement account, using Trust Fund dollars. Should this
legislation be enacted, an additional $104 million would be added to the above amount to
supplement HCFA's current effort.
The budget request allocates $115 million for productivity investments. Productivity
investments enhance the cost-effectiveness and quality of contractor operations and are part
of the long-term reform of Medicare administration. In FY 1997, HCFA will begin
implementation of the Medicare Transaction System (MTS). MTS implementation will be
completed in FY 1999. After that time, HCFA estimates that MTS will achieve $200 million
in annual administrative savings. Other productivity investments costs include transition
costs for contractors who may leave the program.
Federal Administrative Costs
For FY 1997, the President's budget requests $359 million for HCFA's Federal
administrative costs. This request also includes a staffing level of 4,100 FTE. HCFA
remains on target to meet the Department's FTE targets, thereby supporting the President's
mandate on reducing the size of the Federal work force. This funding level also includes
funding to support the extensive data processing requirements for the Medicare and Medicaid
programs, as well as necessary maintenance and enhancement of 80 automated data systems.
This funding level also allows HCFA $2 million for HCFA On-Line to continue activities to
make the agency more responsive to providers and beneficiaries. HCFA will also spend $20
million to update and distribute the Medicare Handbook to all Medicare beneficiaries in FY
1997. HCFA will also fund its new Long-Term Care initiative in FY 1997. Activities to
62
begin creating and developing alternative long-term care models will be funded at $1 million
in FY 1997.
Research, Demonstrations and Evaluation
The FY 1997 budget requests $55.3 million for the Research, Demonstrations and Evaluation
program. HCFA's research program supports research and demonstration projects to
develop and implement new health care financing policies and to evaluate the impact of
HCFA's programs on its beneficiaries, providers, States, and our other customers and
partners. Information from HCFA's research program is used by Congress, the Executive
Branch, and States to improve the efficiency, quality, and effectiveness of the Medicare and
Medicaid programs.
In addition to basic research, this budget fully funds the Medicare Current Beneficiary
Survey and the Information, Counseling and Assistance Grants program. Basic research
funds will support research and demonstration in the areas of monitoring and evaluating
health system performance, improving health care financing and delivery mechanisms,
meeting the needs of vulnerable populations, and improving consumer choice and health
status. HCFA will continue its commitment to rural health needs in FY 1997 by supporting
efforts for telemedicine demonstrations in rural areas.
Survey and Certification
Ensuring the safety and quality of care provided by health facilities is one of HCFA's most
critical responsibilities. HCFA contracts with State agencies to inspect health facilities
providing services to Medicare and Medicaid beneficiaries to ensure compliance with Federal
health, safety, and program standards. HCFA's quality oversight includes initial inspections
of providers who request participation in the Medicare program, annual recertification
inspections of nursing homes and home health agencies (HHAs) as required by law,
investigation of beneficiary complaints, and periodic recertification surveys of other health
care providers and suppliers.
For FY 1997, the President's budget requests a total of $173.8 million for direct survey and
certification activities and workloads. This $28 million increase over FY 1996 is necessary
both to conduct initial inspections of more than 3,200 facilities expected to request Medicare
participation (including the elimination of any prior year backlog), and to increase the
frequency of annual surveys performed on non-long-term care facilities (e.g., ESRD
facilities, hospices, rural health clinics, ambulatory surgical centers). As mandated by
OBRA 87, HCFA conducts recertification surveys (over 24,000) on nursing facilities and
home health agencies annually--a coverage level of 100 percent. HCFA plans to reach a
recertification coverage level on non-accredited hospitals and psychiatric hospitals, hospices
and other providers of 25 percent.
As part of the Health Care Quality Improvement Program, HCFA is currently placing greater
emphasis on effective internal quality management systems within Medicare facilities, as well
as the provider's responsibility to monitor outcomes. In FY 1997, HCFA will be retraining
63
surveyors across the country to reinforce our focus on patient outcomes, which will result in
improved quality throughout the program.
Legislative Proposals
The President's health care legislation package provides added protections for individuals and
small businesses and makes health coverage more accessible, portable, and affordable. The
Health Insurance for the Unemployed proposal provides funds to States to finance up to six
months of coverage for unemployed workers and their families. Other proposed insurance
reforms restrict pre-existing conditions exclusions and prohibits lifetime benefit maximums or
caps on benefits for specific conditions. A small State grant program will be established to
accelerate the development of health insurance purchasing cooperatives, which have
successfully reduced costs and increased choice for small businesses by allowing them to
pool their employees for purposes of purchasing health insurance.
Clinical Laboratory Improvement Amendments of 1988
The Clinical Laboratory Improvement Amendments of 1988 (CLIA '88) expanded survey and
certification of clinical laboratories from Medicare-participating and interstate commerce
laboratories to all facilities testing human specimens for health purposes. CLIA '88 also
introduced user fees for clinical laboratories to finance survey and certification activities.
User fees are credited to the Program Management account but are available until expended
for CLIA activities. The CLIA program is fully operational, with about 152,000 laboratories
registered with HCFA; about 26 percent of the labs are subject to routine inspection under
the program.
64
PROGRAM MANAGEMENT OVERVIEW
(Obligations in millions)¹
1995
1996
1997
Request
Actual
Policy
Request
+ /-Policy
Medicare Contractors:
Claims Processing
$873
$869
$849
-$19
Bene./Prov. Services
269
268
254
-14
Payment Safeguards²
415
396
396
-
Productivity Investments
47
72
115
+43
Subtotal, Medicare Contractors
$1,604
$1,604
$1,614
+$10
Survey and Certification
146
146
174
+28
Federal Administration
354
328
359
+31
Research
75
55
55
-
Subtotal, BA (current law)
$2,178
$2,132
$2,202
+$70
CLIA
34
37
43
+6
Total, Program Level³
$2,353
$2,169
$2,245
+$76
FTE
4,100
4,100
4,100
0
1
Numbers may not add due to rounding.
2
The FY 1995 Appropriation for payment safeguard was $396 million.
3
Not included in these totals are the legislative proposals for the Medicare Benefit Integrity System
(-$396 million from Payment Safeguards in FY 1997), for the Health Insurance for the Temporarily
Unemployed (+$1,519 million in FY 1997), and for the state grants for health care purchasing cooperatives
(+$25 million in FY 1997).
65
HCFA SUMMARY
(Outlays in millions)
1995
1996
1997
Request
Actual
Policy²
Request
+/-Revised
Current Law:
Medicare Benefits
$177,074
$194,164
$213,356
+$19,192
(includes PROs and ESRD)
Medicaid Benefits
89,070
94,892
102,294
+7,402
HCFA Administration
2,109
2,137
2,191
+54
Other-HHS Administration
913
968
1,009
+41
Intergovernmental Transfer
--
319
--
-319
HMO Loan Fund
3
1
1
--
Total, Outlays
Current Law
$269,169
$292,481
$318,851
+$26,369
Proposed Law:
Medicare
--
-161
-6,450
-6,289
Medicaid
--
--
3,277
3,277
Program Management
--
--
--
--
-
-
Total, Outlays Net
Proposed Law
$269,169
$292,320
$315,678
+$23,357
CLIA [Non-Add]
[30]
[36]
[42]
[+6]
Offsetting Receipts³
-20,242
-19,842
-20,287
-445
HMO Loan Fund
-7
3
-3
:
Effect of P.L. On
Offsetting Receipts
--
--
288
+288
Total, Net Outlays4
$248,920
$272,475
$295,675
+$23,200
FTE
4,100
4,100
4,100
0
1
Numbers may not add due to rounding.
2
Based on the levels of the ninth CR, including an incremental policy adjustment.
3
Offsetting receipts include premiums collected from beneficiaries under Medicare Parts A and B.
4
Total net outlays equal current law outlays minus the impact of proposed legislation and offsetting receipts.
66
ADMINISTRATION FOR CHILDREN AND FAMILIES
(Dollars in millions)
1995
1996
1997
Request
Actual
Policy*
Request
+/- Policy
Program Level/BA:
Discretionary
$7,649
$7,169
$7,710
+$541
Entitlement
25,050
25,441
26,586
+1,145
Total
$32,699
$32,610
$34,296
+$1,686
Outlays:
Discretionary
$7,829
$7,495
$7,361
-$134
Entitlement
24,164
25,635
26,660
+1,025
Total
$31,993
$33,130
$34,021
+$891
FTE
1,803
1,803
1,803
0
* Based on levels of the ninth CR, including an incremental policy adjustment.
Discretionary Program Summary
ADMINISTRATION FOR CHILDREN AND FAMILIES
FY 1997 Discretionary Funding
The Administration for Children and
Families (ACF) is the Department's lead
Head Start 52%
agency for programs serving America's
children, youth, and families. In FY 1997,
ACF is seeking $7.7 billion for
Devel Disabil 2%
discretionary programs within ACF that
VAWA/Teen Preg 1%
promote healthy children, supportive
Other 4%
Child Welfare 6%
Comm Serv Block 5%
families, and vibrant communities.
LIHEAP 13%
Child Care Block 14%
The Department has a strong commitment
Refugee Programs 5%
to ensuring that our nation's children and
$7.7 Billion
youth are healthy, safe, and developing to
their full potential in stable families and secure communities. To better fulfill government's
responsibility toward children and families, the Department has developed a multifaceted
strategy that promotes strong futures. Secretary Shalala commissioned a Governing Council
on Children and Youth and charged this group with increasing coordination and collaboration
throughout the Department on program and policy issues affecting children. That
collaborative strategy is also evident through investments in programs which support Strong
Foundations--the building blocks of success for children and families--and Safe Passages--the
tools for navigating the transition from childhood to adulthood. Head Start, child care, and
child welfare services emphasize early childhood health and development and promote Strong
67
Foundations for our children. Equally important are the supports needed to ensure Safe
Passages for the critical journey through adolescence. The Department is moving forward to
launch and coordinate a wide array of activities to promote Safe Passages for our nation's
youth including a teen pregnancy prevention initiative and the community schools program.
Head Start
Investing in Head Start and expanding enrollment are key Presidential priorities. The
FY 1997 budget request of $3.98 billion for Head Start will serve an additional
46,000 children. This request, an increase of $447 million over FY 1995, will establish
strong foundations for a total of 796,500 children and their families. As a result of this
Presidential investment, Head Start will grow to serve over one million children by the
year 2002.
Head Start continues to be one of the nation's most successful programs for low-income
children and families, providing comprehensive education, nutrition, health services and
social services. Evaluations of Head Start children continue to show that the Head Start
experience has a positive impact on school readiness, increases children's cognitive skills,
self-esteem, and achievement motivation, and improves school social behavior. Head Start
also helps to improve the parenting skills and employment related skills of Head Start
parents.
Important funding increases sought by the
HEAD START
Clinton Administration during the last three
Increases in children served 1993 - 1997
by type of program
years have allowed local programs to make
significant increases in program quality.
800,000
These increases are directed at much-needed
improvements in facilities, hiring of family
workers, and more competitive salaries and
760,000
infant / toddler
benefits in order to attract and retain quality
full-day programs
part-day programs
staff. Through more effective monitoring
700,000
and technical assistance, we are assuring
that all Head Start programs provide good
quality services and we are replacing
650,000
1993
1994
1995
1996
1997
programs that cannot. One important aspect
of the quality improvement process has been
the revision and updating of the Head Start Performance Standards and Measures, important
yardsticks for evaluating the effectiveness of local programs.
The Head Start Program Performance Standards were developed in the 1970's as a guide for
day-to-day program operations. These standards cover the areas of health, social services,
parent involvement and education for children ages three to five. As directed by the 1994
Head Start reauthorization act, HHS is engaged in revising the standards to better support
quality. We anticipate publishing a proposed regulation for comment this spring. The
revised standards include two new sections: Family and Community Partnerships, and
Program Design and Management. The updated standards also incorporate services for
pregnant women, infants and toddlers to support the Early Head Start program. HHS has
68
engaged in extensive consultation to revise these standards, convening over 70 focus groups
and receiving the input of over 2,000 people and national organizations. Head Start is also
in the process of developing Program Performance Measures to assess the quality and
effectiveness of the program through outcomes and indicators. These measures are intended
to provide a process for continuous improvement over time.
Another recent advance involves services to young children. In FY 1995, the Early Head
Start program was established in recognition of the mounting evidence that the earliest years
are extremely important to children's growth and development. Serving low-income children
under the age of three and pregnant women, Early Head Start funds in FY 1997 will be
equal to 4 percent of the total Head Start budget or $159.3 million. In FY 1997, these funds
will support an estimated enrollment level of 25,600 children and their families, a 41 percent
increase in enrollment since FY 1995. Children and families enrolled in Early Head Start
will receive early, continuous, intensive and comprehensive child development and family
support services.
Child Care and Development Block Grant
The FY 1997 budget request for the Child Care and Development Block Grant (CCDBG) is
$1.049 billion. This request is a component of the Administration's continued commitment
to promoting family self-sufficiency by helping States fund child care services for over
70,000 additional children from low-income working families.
The availability of quality child care for low-income families is critical to maintain economic
self-sufficiency and to promote healthy child development. Over one million children could
require child care assistance by the year 2000 in order to meet the work requirements put
forth in most major welfare proposals. Many low-income working families spend up to
25 percent of their income on child care. The Child Care and Development Block Grant
provides child care funds to States for low-income families with a parent who is working or
attending a training or educational program or children in need of protective services. Over
750,000 children currently receive program services, but waiting lists for assistance still exist
nationwide.
CCDBG also supports activities to improve the quality and availability of child care across
the nation. Funds are used by States to support consumer education, provider training,
licensing and monitoring, and outreach to build the supply of infant care, school age care,
care for families working non-traditional hours, and care for children with special needs. In
an effort to further improve service, ACF has streamlined operations and recently launched a
national campaign, "Healthy Child Care America," to promote sound health and early
childhood development practices in child care settings. CCDBG funds provide the
foundation for safe and healthy care so critical to optimal child development.
69
Low Income Home Energy Assistance Program (LIHEAP)
The FY 1997 budget request for LIHEAP includes $1 billion in regular appropriations and
$300 million in emergency funding. In addition, ACF is requesting a $1 billion advance
appropriation for FY 1998.
The LIHEAP program provides grants to States, territories, tribes and tribal organizations to
assist low-income households in meeting home energy costs. Flexible program requirements
allow States to target assistance to the areas with the greatest needs, support weatherization
efforts, and leverage additional energy dollars from non-Federal sources. To date in
FY 1996, $900 million has been made available, primarily for heating and crisis assistance.
Child Welfare/Child Abuse
In FY 1997, ACF is requesting $419 million in discretionary funding for a range of
programs that help States and local communities to protect children by strengthening families
and preventing abuse; intervening when families are in crisis; and when necessary, making
placement decisions to ensure children's safety. A total of $50.6 million will be used to
fund Community-Based Resource Centers which support statewide networks of local child
abuse and neglect prevention and family resource programs. In FY 1997, ACF will also
consolidate research and training programs into the Child Welfare Innovative Programs
account, totaling $39.1 million, to allow greater flexibility in funding promising initiatives
and to disseminate knowledge on what works best across the spectrum of child welfare
services.
In 1993, States received reports on nearly three million children who were alleged victims of
child abuse and neglect, reflecting a 25 percent increase in the rate of children reported since
1988. The U.S. Advisory Board on Child Abuse and Neglect estimated that 2,000 of these
children die each year as a result of abuse or neglect. As demands on the child welfare
system to protect abused and neglected children increase and State and local agencies are
overburdened, ACF has dedicated funding to promote children's healthy development by
preventing and treating the effects of child abuse and neglect.
Teen Pregnancy Prevention
Teen pregnancy rates remain alarmingly high in the U.S. President Clinton, recognizing the
impact of this tragedy, has referred to teen pregnancy as one of our most serious social
problems. In an effort to help local communities further develop effective prevention
strategies, HHS will launch a $30 million collaborative Teen Pregnancy Prevention Initiative
in FY 1997. Demonstration grants to combat teen pregnancy will be made available to
selected cities with relatively high teen pregnancy rates. Funds will be targeted to
communities that have demonstrated a commitment to community problem solving and
developed an appropriate infrastructure for implementing proposed strategies. Grant funds
will be available to initiate, expand, or enhance comprehensive prevention strategies which
utilize social, economic, and educational approaches to reaching at-risk teens. Drawing upon
70
strong community and family support for this initiative together we can help to ensure safe
passages for our Nation's adolescents.
Refugee Resettlement
The FY 1997 budget request for the Refugee and Entrant Assistance program is
$381.5 million, based on a projected refugee ceiling of 75,000 and an additional
15,000 Cuban entrant arrivals. In order to be designated as refugees, people must have a
well-founded fear of persecution in their country of origin because of race, religion,
nationality, membership in a particular social group, or political opinion. Entrant arrivals
are a result of the U.S./Cuban Migration Agreements which sought to end mass illegal
immigration from Cuba. Over 22,000 Cuban entrants arrived in the United States in
FY 1995 while nearly 100,000 refugees and Amerasians arrived. In January 1996, the last
of the 30,500 Cubans and 500 Haitians previously detained at Guantanamo Bay were
admitted to the U.S.
This funding level will provide States the capacity to provide eight months of refugee cash
and medical assistance, as well as reimbursement for the care of refugee unaccompanied
minors. This request will also support Preventive Health, Targeted Assistance and Social
Services programs administered by public and private non-profit agencies. These programs
help refugees become self-supporting and socially adjusted upon arrival in the U.S.
Community Services Block Grant
The Community Services Block Grant Program provides States, territories, and Indian Tribes
with a flexible source of funding to ameliorate the causes of poverty. In FY 1997, ACF is
requesting $389.6 million for this program. Grant funds will be used by a network of local
agencies including community action agencies, tribes, and tribal organizations to provide a
range of services and activities to assist low-income individuals. ACF is not seeking funding
for other discretionary Community Services programs. This decision reflects the concerns of
Congress to reduce the number of discretionary grant programs and the Administration's
intention to develop more comprehensive programs.
Developmental Disabilities
In FY 1997, ACF is requesting $121.9 million to support programs that protect the rights
and promote the self-sufficiency of Americans with developmental disabilities and their
families. The Administration for Developmental Disabilities programs serve nearly
four million Americans with severe, chronic disabilities attributable to mental and/or physical
impairment, which are manifested before age 22, are likely to continue indefinitely, and
result in substantial limitations in major life activity. Funds for this program help State
governments, local communities, and the private sector to integrate disabled individuals
socially and economically into mainstream society through the development of Statewide
coordinated systems, the establishment of protection and advocacy systems to assist
individuals in exercising their human and legal rights, university affiliated programs to
71
disseminate information, and special projects which focus on the most pressing national
issues affecting people with developmental disabilities and their families.
Violence Against Women Programs
In his State of the Union address, President Clinton challenged the citizens of this nation,
stating, "I call on American men and women in families to give greater respect to one
another. We must end the deadly scourge of domestic violence in our country." In
FY 1997, ACF is requesting $15 million in grants for battered women's shelters for a total
Family Violence program level of $47.6 million. This funding helps States, territories, and
tribes provide shelter services to victims of family violence and their children and for related
services, such as alcohol and substance abuse prevention and family violence prevention
counseling.
The budget also includes $400,000 for the Domestic Violence Hotline (1-800-799-SAFE).
This national, 24-hour, toll-free hotline was first funded in FY 1995 and began providing
crisis assistance, counseling, and local shelter referrals across the country on
February 21, 1996. Hotline counselors are also available for non-English speakers and the
hearing impaired.
ACF Entitlement Programs
For three years, the Administration and the Department have worked aggressively to
overhaul the nation's welfare system both incrementally through State waivers, and
comprehensively, through fundamental legislative reforms. We have granted waivers to
nearly 40 States, to provide them with the freedom to move people out of welfare and into
jobs. As a result, nearly ten million welfare recipients are in households where the adults
are being required to work, and to take more responsibility for their families and their
future. These incremental successes are encouraging, but they are only a beginning.
Building upon the principles of work and responsibility, we are committed to working with
the Congress to enact a bipartisan welfare reform bill.
The President's FY 1997 budget includes a revised proposal to reform the welfare system.
The new plan saves $40 billion over seven years while promoting sweeping work-based
reforms and protecting children. The key elements of the President's welfare reform
proposal are:
A time-limited conditional entitlement in return for work: AFDC would be
eliminated and replaced with the Temporary Employment Assistance (TEA). The
TEA program would provide cash benefits to eligible families with needy children.
As soon as they join the rolls, beneficiaries would have to develop and sign a
personal responsibility contract with their welfare office. Within two years, able-
bodied parents would have to work or lose their benefits. Cash assistance would be
limited to five years. In order to protect vulnerable families, exemptions from the
time limit would be allowed for hardship cases and vouchers would be provided for
children whose parents reach the time limit.
72
Child care to reward work over welfare: Child care is vital to moving people off
welfare and helping them stay off. The President's budget contains $3.8 billion for
child care programs to help low-income parents gain the skills to hold a job, or look
for one. Child care funds also would help parents avoid welfare in the first place.
Work programs to help recipients move into the labor market: The President's
welfare reform proposal establishes tough work requirements by replacing the JOBS
program with the Work First program. The plan would provide a block grant to
States to cover the cost of providing job placement, job training and other
employment services, administering the cash benefit program, and delivering
emergency assistance. It provides States with increased flexibility to design and
operate work programs that best meet the needs of their communities. States would
receive financial incentives for moving families from welfare to work.
Protection during economic downturns: The President's plan maintains a flexible
funding structure that adjusts to changing economic circumstances. In a recession,
State revenues fall even as welfare caseloads rise because more jobless families seek
public assistance. Without a funding structure that can adjust to caseload changes, a
recession could render many States unable to keep paying welfare benefits and still
meet the tough work requirements of any real reform. While providing this
protection for States, the President's plan also requires States to maintain their stake
in moving people from welfare to work and holds States accountable for making
welfare reform a success.
Tougher child support enforcement: The President's plan includes new child support
enforcement measures that emphasize parental responsibility including: revoking
driver and professional licenses for parents who refuse to pay child support,
improving interstate laws to find such parents, and strengthening the tools to establish
paternity so that both parents take full responsibility for their children.
Now, we must encourage the Congress to do its part to enact changes that will encourage
work, protect families, and reduce spending. Until then, we will continue the process of
welfare reform through waivers, one State at a time.
The following pages summarize projected spending for AFDC and related programs under
current law in the event that comprehensive welfare reform is not enacted prior to FY 1997.
Job Opportunities and Basic Skills Training
A total of $1 billion would be required under current law in FY 1997 to support the Job
Opportunities and Basic Skills Training (JOBS) program, a key element of current efforts to
help welfare recipients achieve self-sufficiency. The program gives States flexibility to
provide training and work opportunities geared to their particular AFDC recipients' needs.
Currently, over 600,000 people are active in JOBS programs each month. States have wide
flexibility in structuring the mix of programs they offer to recipients. Programs must
include: educational activities (e.g., high school or equivalent level, basic and remedial
73
education); job skills training; job readiness training activities; and job development and
placement assistance. States must also include at least two of the following components in
their programs: job search programs; on-the-job training; work supplementation programs;
and community work experience programs.
Aid to Families with Dependent Children
The Aid to Families with Dependent Children (AFDC) program provides funding to States
for cash assistance to low-income families with dependent children who have been deprived
of parental financial support due to the death, disability, unemployment or continued absence
of a parent. Reductions in caseload over the last year of approximately 6.6 percent have
resulted in decreased spending in FY 1996 for this program. Recent estimates suggest that
budget authority for benefit payments in FY 1996 will be 8 percent below comparable
spending in FY 1995.
In addition to AFDC benefits, States also have the option of operating the AFDC Emergency
Assistance program. This program provides financial assistance, medical, and/or social
services to needy families with children to meet temporary, emergency needs. Budget
authority of $1.9 billion is requested for FY 1997, including amounts to pay for claims from
prior years. State claims under the Emergency Assistance program have increased by over
1,000 percent since 1991 as more States have begun to participate, and as States have
attempted to claim Federal reimbursement for a wider range of activities, including various
types of child protective services and medical emergencies for children not receiving
Medicaid, and to cover a broader range of recipients. In FY 1996, the Administration for
Children and Families issued policy clarification to States that prohibited the costs of juvenile
justice programs from being funded as Emergency Assistance.
AFDC Child Care (Title IV-A)
In FY 1997, $1.45 billion would be required under current law for three child care
programs: child care for JOBS participants, former AFDC recipients who work, and those
at risk of becoming AFDC recipients. More than half of these funds, $880 million, will
support current AFDC recipients' efforts to become self-sufficient by paying for child care
that these recipients need to participate in education, training, and work activities. As
recipients become self-sufficient and leave the AFDC rolls due to increased employment
income, States will provide recipients with up to 12 months of child care to ease the
transition from welfare to work. A total of $268 million is requested for this Transitional
Child Care program in FY 1997. Finally, the At-Risk (non-AFDC) Child Care program
provides child care assistance to families at risk of becoming AFDC recipients. The
FY 1997 request for this program totals $300 million.
Child Support Enforcement
The Child Support Enforcement (CSE) program is a joint Federal, State and local partnership
that seeks to locate noncustodial parents, establish paternity, and set and enforce support
74
orders. Costs of these activities are jointly financed by the Federal Government (66 percent)
and the States (34 percent). In FY 1997 it is estimated that a total of $2.1 billion will be
expended in order to collect over $12.5 billion in payments.
The first $50 of currently-due support collected on behalf of an AFDC family in a month is
given to that family, while the balance can be used by Federal, State and local governments
to offset their costs of assisting these families. From the Federal share, States also receive
an incentive payment based on program efficiency and the amount of their collections. The
remaining Federal share is available to offset Federal AFDC benefit costs. Collections made
on behalf of non-AFDC families are paid directly to these families. For non-AFDC families
with low incomes, receipt of child support assists them in remaining off the welfare rolls.
Since the creation of the child support enforcement program, total child support collections
have increased annually. In recent years, States have increased collections by using
approaches such as income withholding, offset of income tax refunds, support guidelines and
closer links to credit bureaus. In FY 1997, $12.5 billion in child support collections are
projected to be distributed to families and shared by governments, an 8 percent gain in
collections over FY 1996. In FY 1996, this represents a total return of almost $4 for every
dollar invested in the administration of the program. Since the inception of the program in
FY 1975, a total of $83 billion has been collected.
The Office of Child Support Enforcement (OCSE) has a new initiative to promote
dramatically improved performance, service quality and public satisfaction with the child
support enforcement program. As a pilot project under the Government Performance and
Results Act (GPRA), HHS has begun strengthening partnerships with State child support
agencies. OCSE has approved 33 applications from State and local governments to
implement innovative approaches in their programs. Examples include new efforts to
improve access to medical insurance, encourage welfare mothers' cooperation in identifying
and locating alleged fathers, and provide employment counseling to noncustodial parents.
75
CHILD SUPPORT ENFORCEMENT COLLECTIONS AND COSTS
(Dollars in millions)
(outlays)
1995
1996
1997
Estimate
Actual
Policy
Request
+/- Policy
Total Collections Distributed to:
AFDC/FC Families
$476
$509
$544
+$35
Non-AFDC Families
8,018
8,730
9,446
+716
AFDC program
2,143
2,278
2,437
+159
FC program
22
23
24
+1
Total
$10,659
$11,540
$12,451
+$911
Distributed to AFDC Program:
Net Federal Share
$822
$853
$907
+$54
State Share
1,321
1,425
1,530
+105
Total
$2,143
$2,278
$2,437
+$159
Administrative Costs:
Federal Share
$1,993
$2,026
$2,109
+$83
State Share
918
976
1,055
+79
Costs
$2,911
$3,002
$3,164
+$162
Program Savings and Costs:
(Collections minus Costs)
Federal Costs
$1,171
$1,173
$1,202
+$29
State Savings
(403)
(449)
(475)
+(26)
Net Costs
$768
$724
$727
+$3
Foster Care, Adoption Assistance and Independent Living
A total of $4.4 billion in budget authority is requested in FY 1997 for the Foster Care,
Adoption Assistance and Independent Living programs. Of this request, $3.8 billion is
requested for the Foster Care program, which will provide payments on behalf of almost
285,000 children each month. This request will also fund State administration, including
child welfare case management systems, training, and State data systems. In FY 1997, under
the Adoption Assistance program, ACF is requesting $568 million to provide subsidy
payments to families who have adopted special needs children. Payments are made on behalf
of adopted children up to their 18th birthday and this level of funding will support
approximately 131,000 children each month. The Independent Living Program will receive
$70 million to continue services to help teenagers under State supervision make the transition
to living on their own.
76
Family Preservation and Support
For FY 1997, $240 million will be made available to States and eligible tribes as part of a
continuing five-year funding plan started in FY 1994 to strengthen family preservation and
support services. These services help State protection welfare agencies and eligible Indian
tribes establish and operate integrated, preventive family preservation services and
community-based family support services for families at risk or in crisis. Family
preservation services are activities that help families alleviate crises that might lead to
out-of-home placements of children because of abuse or neglect. Family support services,
often provided by community-based organizations, are voluntary, preventive activities to help
families nurture their children. These activities help to prevent the unnecessary separation of
children from their families and improve the quality of care and services.
77
ACF OVERVIEW
DISCRETIONARY SPENDING
(Dollars in millions)
1995
1996
1997
Request
Actual
Policy*
Request
+ /-Policy
Head Start
$3,534
$3,631
$3,981
+$350
Child Care Development Block Grant
935
935
1,049
+ 114
Low Income Home Energy
1,419
1,000
1,000
0
Emergency Funding (non-add)
(500)
(300)
(300)
0
Child Welfare:
Child Welfare Services
292
292
292
0
Child Welfare/Child Abuse
127
72
127
+55
Subtotal, Child Welfare
$419
$364
$419
+$55
Refugee & Entrant Assistance
$400
$400
$381
-$19
Targeted Assistance
6
5
0
-5
Community Services Block Grant
458
429
390
-39
Runaway and Homeless Youth
69
57
69
+ 12
Developmental Disabilities
122
116
122
+6
Violence Against Women Programs
33
38
48
+10
Native Americans
38
35
38
+3
Teen Pregnancy Initiative
0
0
30
+30
Social Services Research
15
0
10
+10
Other ACF
39
8
13
+5
Federal Administration
162
151
160
+9
Total, Program Level/BA
$7,649
$7,169
$7,710
+ $541
* Based on levels of the ninth CR, including an incremental policy adjustment.
78
ACF OVERVIEW
ENTITLEMENT SPENDING
(Dollars in millions)
1995
1996
1997
Increase/
Actual
Estimate*
Estimate*
Decrease
Social Service Block Grant
$2,800
$2,800
$2,800
$0
Foster Care/Adoption Assistance
3,597
4,322
4,445
+ 123
Family Support & Preservation
150
225
240
+15
JOBS
1,012
1,000
1,000
0
Family Support Payments (FSP):
AFDC/Related Assistance**
11,451
10,408
10,780
+372
Emergency Assistance
984
1,687
1,867
+180
Child Care
1,152
1,404
1,447
+ 43
AFDC State Administration
1,780
1,679
1,875
+196
Child Support Enforcement Admin
2,124
1,916
2,132
+216
Subtotal, FSP
$17,491
$17,094
$18,101
+$1,007
Subtotal, Entitlements
$25,050
$25,441
$26,586
$1,145
Total, ACF BA
$32,699
$32,610
$34,296
+ $1,686
FTE
1,803
1,803
1,803
0
*
Funding levels are based on the Administration's most recent estimates of entitlement spending under
current law.
**
AFDC and related assistance is shown net of child support collections.
79
ADMINISTRATION ON AGING (AoA)
(Dollars in millions)
1995
1996
1997
Request
Actual
Policy*
Request
+/-Policy
Program Level/BA
$876
$828
$828
$0
Outlays
951
776
819
+$43
FTE
177
177
177
0
*
Based on levels of the ninth CR, including an incremental policy adjustment.
Summary
ADMINISTRATION ON AGING
The FY 1997 budget for the Administration
FY 1997 Budget
on Aging (AoA) provides $828 million for
$828 Million
programs aimed at improving older
Supportive Services & Centers
Americans' quality of life. In addition, the
35%
budget reflects the Administration's desire
to consolidate, in AoA, the management
and oversight of programs that serve the
Other AoA
11%
elderly. The Department of Agriculture
will transfer administration of their
Nutrition Programs for the Elderly to AoA,
and the Department of Labor will transfer
administration of their Older Workers
Meals Programs
54%
program to AoA. The programs funded by
AoA help senior citizens remain
independent and productive.
AoA serves older persons and their families through the administration of the Older
Americans Act and aging-related research and educational projects. As the focal point in the
Federal Government for serving older persons, AoA works to advance the dignity and
independence of the nations' elderly. By the year 2030, the number of people aged 60 and
older will increase to 89 million, while those 85 and older will increase to almost
nine million. AoA recognizes the need to address these demographic changes, and is striving
to prepare both older and younger Americans for their aging.
Nutrition Programs
For FY 1997, AoA requests $451.2 million for Nutrition Programs. Over 240 million meals
80
were served last year through the Aging Network--about half of meal recipients are
low-income elders and about 16 percent of recipients are members of minority groups.
Recipients of home-delivered meals are among the most vulnerable elderly in the community,
with 73 percent considered to be frail and disabled and 53 percent being low-income.
Between 1980-1993, the number of home-delivered meals increased by 180 percent,
reflecting not only a growing elderly population but also an elderly population composed of
increasingly older and more frail individuals. Moreover, the volunteers who deliver the
meals often serve as informal gatekeepers, assessing if recipients have other needs and
linking them to additional services.
Congregate nutrition services provide a cooked, ready, nutritious meal to seniors in a group
setting. Participation in a group setting reduces isolation and encourages continued physical
and mental functioning. The Older Americans Act directs that priority be given to those who
are in greatest economic and social need, with particular attention to low-income, minority
older persons.
Supportive Services
The FY 1997 budget request reflects AoA's commitment to ensure that older Americans have
an independent, productive, healthy and secure life. Supportive services represent the
cornerstone of the comprehensive and coordinated system of home and community-based
services that address the needs of the elderly. The FY 1997 budget provides funding for a
network of 57 State units, 228 Indian tribal organizations, 670 Area Agencies on Aging,
approximately 6,000 senior centers and more than 27,000 service providers throughout the
country. Supportive services and centers have provided over 40 million rides, over
12 million responses for information and referrals, nearly 10 million personal care services
to elderly in need, and approximately one million legal counseling sessions.
Long-Term Care
One of the great challenges confronting America's families is care for relatives who are
elderly or disabled. This challenge is often accompanied by fear as older and disabled
persons face their own aging or increased disabilities. The FY 1997 request reflects a
commitment to addressing these family needs as it shapes a long-term care system for the
future.
The FY 1997 budget request provides $9.2 million for in-home services for the frail elderly.
The rapid growth of the age 85 and over population brings new demands for care because of
limited mobility, increasing disability, more elderly living alone and the higher risk of
poverty. By supporting the provision of services to frail older individuals, the program
increases the access of vulnerable older individuals to needed assistance and helps them avoid
institutionalization.
The Long-Term Ombudsman Program will be funded at $4.5 million in FY 1997. This
request underscores the crucial role ombudsmen play in the long-term care system and the
useful assistance they provide to residents and their families related to their care.
81
Ombudsman programs in all States, Puerto Rico and the District of Columbia serve the
Nation's 1.5 million nursing home residents, who are the most frail and vulnerable group in
the long-term care system.
Additional activities funded through AoA include basic and applied research on the chronic
illnesses that contribute to disability and efforts to improve the efficiency and effectiveness of
community-based long-term care systems. The challenge here is to enable States and local
governments to design and build on innovative models of integrated care and service delivery
and to make their long-term care systems more customer-oriented in FY 1997.
Proposed Transfers
AoA's reauthorization legislation pending before Congress proposes to transfer $150 million
from the USDA's Nutrition Program for the Elderly, and replace it with the Nutrition
Services Incentive Program under Title III-C of the Older Americans Act. The Nutrition
Services Incentive Program would be administered by AoA; however, the funds would
continue to be appropriated to the Department of Agriculture.
The reauthorization also proposes to transfer the Department of Labor's Community Service
Employment for Older Americans program (Title V) to AoA. This proposal would ensure
national responsiveness to local community needs. It would allow greater flexibility to
consolidate, coordinate, link and expand limited resources to enhance community service and
employment and training for low-income seniors. The proposed transfer would amount to
$350 million.
82
AoA OVERVIEW
(Dollars in millions)
1995
1996
1997
Request
Actual
Policy/1
Request
+ /-Policy
Current Law;
Supportive Services
$306
$295
$295
$0
Meals:
Congregate Meals
376
357
357
0
Home-Delivered
94
94
94
0
Subtotal, Meals
$470
$451
$451
$0
In-home Services-Frail Elderly.
$9
$9
$9
$0
Indian/Tribal Grants
17
16
16
0
Preventive Health
17
17
17
0
Research, Training and Demos.
26
12
12
0
Ombudsman Services
5
5
5
0
Prevention of Elder Abuse
5
5
5
0
Pension Counseling
2
2
2
0
White House Conference
3
0
0
0
Federal Administration
16
16
16
0
Federal Council on Aging
0.1
0.2
0.2
0
Subtotal, BA
$876
$828
$828
$0
Proposed Transfers:/2
Department of ./NPE
($150)
($150)
($150)
$0
Department of Labor
(396)
(350)
(350)
0
Subtotal, Proposed Transfers
($546)
($500)
($500)
$0
Total, BA
$876
$828
$828
$0
FTE
177
177
177
0
1/ Based on levels of the ninth CR, including an incremental policy adjustment.
2/ Proposed Bill language transfers $150 million from the Department of Ag. Nutrition Programs for
the Elderly (NPE) and $350 million from the Department of Labor Community Work Program for
the Elderly to be administered by AoA. 1995 Actual and 1996 Policy levels for these programs
are provided for comparison only.
83
DEPARTMENTAL MANAGEMENT
(Dollars in millions)
1995
1996
1997
Request
Actual
Policy*
Request
+/- Policy
Program Level
$214
$192
$198
+$6
Budget Authority
188
172
178
+6
Outlays
256
219
167
-52
FTE
1,544
1,544
1,544
0
*
Based on levels of the ninth CR.
Summary
The Departmental Management (DM) budget includes requests for five separate
appropriations--General Departmental Management, Office for Civil Rights, Policy Research,
Office of Consumer Affairs, and the Public Health and Social Service Emergency Funds--that
fund activities which provide leadership, policy, legal, and administrative guidance to HHS
components; carry out the Department's civil rights and nondiscrimination enforcement
programs; present consumer needs and viewpoints in the Federal Government; and support
research to develop policy initiatives and improve existing HHS programs. DM also
incorporates the activities of the former Office of the Assistant Secretary for Health (OASH),
including adolescent family life, disease prevention and health promotion, physical fitness
and sports, minority health, research integrity, women's health, HIV/AIDS policy, and
emergency preparedness. The operation and maintenance of central and common
administrative, fiscal, and personnel support services have been centralized in the Program
Support Center, a newly created HHS Operating Division (OPDIV).
General Departmental Management
The FY 1997 budget request provides a program level of $165 million for General
Departmental Management (GDM), including an appropriation of $145 million and
intra-agency transfers of $20 million in one-percent evaluation funds. GDM supports those
activities associated with the Secretary's roles as chief policy officer and general manager of
the Department through nine Staff Divisions (STAFFDIVs): the Immediate Office of the
Secretary, the Offices of Public Affairs, Legislation, Planning and Evaluation, Management
and Budget, Intergovernmental Affairs, General Counsel, and Public Health and Science, and
the Departmental Appeals Board. The operations of the Assistant Secretary for Personnel
84
Management and the Assistant Secretary for Management and Budget were merged in
FY 1996.
As part of the Department's reinvention and streamlining processes, the Office of the
Assistant Secretary for Health was merged with the Office of the Secretary, eliminating an
entire management layer. The new Office of Public Health and Science (OPHS), headed by
the Assistant Secretary for Health (ASH), and the Public Health Service OPDIVs report
directly to the Secretary. The ASH functions as senior advisor for public health and science
to the Secretary and provides senior professional leadership in the Department on
population-based public health and clinical preventive services. The ASH also provides
direction to the following OPHS program offices:
Adolescent Family Life Program -
supports grants which encourage
adolescents to delay sexual behavior,
OFFICE OF PUBLIC HEALTH AND SCIENCE
provides service to pregnant and
FY 1997 Request
(Dollars in millions)
parenting teens, and researches
adolescent pregnancy issues. The
request will support the same
PCPFS
$1
AFL
$6
ODPHP $4
number of grants (18) as in
FY 1996.
ORI
$4
OMH $20
OWH $3
OHAP $1
Office of Disease Prevention and
OEP $7
Health Promotion - coordinates
Immediate Office $4
health promotion and disease
prevention activities among the
Includes $5 million for anti-terrorism activities in OEP.
Excludes OIRH reimbursable and OPHS one-percent evaluation funds.
Department's Operating Divisions,
other Federal Departments, and the
private and voluntary sectors.
President's Council for Physical Fitness and Sports - promotes and encourages
physical activity/fitness and sports participation for Americans of all ages and
abilities.
Office of Minority Health - coordinates disease prevention, health promotion, and
health service delivery for disadvantaged and minority individuals and supports
research on minority health topics, the goal of which is to improve the health status of
racial and ethnic minority populations in the United States which continues to lag
behind the health status of the American population as a whole.
Office of Research Integrity - oversees and directs the research integrity efforts of the
Public Health Service, with the exception of the regulatory research activities of the
Food and Drug Administration.
Office on Women's Health - serves as the Department's focal point for the
improvement and protection of women's health by redressing inequities in the conduct
of research, health services, prevention, and public and health professional education
and training on women's health issues.
85
Office of Emergency Preparedness - manages and coordinates the health and medical
and health-related social services that are provided by the Federal Government to
victims of catastrophic disasters through the Federal Response Plan Emergency
Support Function (ESF) #8. Under ESF #8, HHS coordinates the support of
12 Federal agencies in the preparedness for, response to, and recovery from natural
and man-made disasters.
The Department is the lead Federal agency for the management of the response to the
health and medical consequences of a major terrorist event. The Office of Emergency
Preparedness has been tasked by the National Security Council to assess and remedy
any shortfalls in the health and medical consequence response capabilities necessary in
the event of a terrorist use of a weapon of mass destruction, be it chemical, biological
or nuclear. The FY 1997 budget request includes anti-terrorism funding of $5 million
to begin to ensure an effective and coordinated local, State, and Federal Government
response to a terrorist incident.
Office of HIV/AIDS Policy - provides professional expertise to the Secretary and the
Assistant Secretary for Health in the areas of HIV/AIDS prevention, treatment and
rehabilitation and leadership in policy development and program coordination related
to the Department's response to the HIV epidemic in the United States.
Office of International and Refugee Health - serves as the HHS focal point for policy
guidance, planning, evaluation, and program coordination related to international and
refugee health affairs, funded through reimbursable agreements with the Department
of State, United States Agency for International Development, and international health
organizations (WHO and UNICEF).
Office for Civil Rights
The FY 1997 budget request for the Office for Civil Rights (OCR) is $22 million, the same
as the FY 1995 level and an increase of $3 million over the FY 1996 operating level. OCR
is responsible for enforcing nine major civil rights statutes that prohibit discrimination in
Federally-assisted health care and social services programs. These statutes cover
nondiscrimination on the basis of race, national origin, disability, age, and in limited
instances, sex and religion. In addition, OCR is responsible for coordinating the
implementation of the Section 504 regulation that prohibits discrimination against persons
with disabilities in programs and activities conducted by HHS. OCR enforces
nondiscrimination requirements by processing and resolving discrimination complaints,
conducting reviews and investigations, monitoring corrective action plans, and carrying out
voluntary compliance, outreach and technical assistance activities. OCR has made significant
progress in addressing issues such as race discrimination in access to health care and
discrimination against persons with disabilities. In FY 1995, OCR completed
5,655 discrimination complaint and review cases, with 40 to 50 percent of the cases resulting
in changes in policies and practices.
This budget request reflects the continuation of the implementation of OCR's strategic plan.
The plan has resulted in significant reengineering of OCR's investigative and compliance
86
processes through redesign and streamlining. The plan calls for expanded use of innovative
partnerships both within HHS and at the State and local levels to ensure civil rights
compliance. As a result of strategic plan initiatives, review and complaint investigation
production is projected to increase by more than 45 percent. In addition, the FY 1997
budget request includes funds to support outreach and other compliance initiatives that seek
new ways of preventing civil rights problems and addressing potential discrimination in HHS
programs.
Policy Research
The FY 1997 budget request includes $9 million for Policy Research (PR) to support
research on policy issues of national significance. Priority issues that PR will examine are
those related to welfare reform, health care, family support and independence, poverty,
at-risk children and youth, aging and disability, science policy, and improved access to health
care and support services.
U.S. Office of Consumer Affairs
The FY 1997 budget request for the U.S. Office of Consumer Affairs is $2 million. These
funds will support presentation of consumer viewpoints within the Executive Branch
especially related to fraud, telecommunications and privacy issues; publication and
distribution of the Consumer's Resource Handbook and other consumer information
materials; and operation of the National Consumer Helpline, a Federal clearinghouse for
consumer complaint handling, information and referral.
87
DEPARTMENTAL MANAGEMENT SUMMARY
(Dollars in millions)
1995
1996
1997
Request
Actual
Policy*
Request
+/- Policy
General Departmental
Management
$181
$162
$165
+ $3
Office for Civil Rights
22
19
22
+3
Policy Research
9
9
9
0
U.S. Office of Consumer
Affairs
2
2
2
0
Subtotal, Program Level
$214
$192
$198
+ $6
Less: Intra-agency Transfers
-26
-20
-20
0
Total, BA
$188
$172
$178
+ $6
FTE
1,544
1,544
1,544
0
* Based on levels of the ninth CR.
88
OFFICE OF INSPECTOR GENERAL
(Dollars in millions)
1995
1996
1997
Request
Actual
Policy*
Request
+/- Policy
Program Level
$79
$74
$75
$1
Budget Authority
79
74
75
+1
Outlays
89
67
75
+7
FTE
927
927
927
0
*
Based on levels of the ninth CR.
Summary
For FY 1997, the Office of Inspector General (OIG) requests $75 million, an increase of
$1 million above the FY 1996 level. OIG is charged with conducting and supervising audits
and investigations relating to programs and operations of HHS; providing leadership and
coordination for, and recommending policies and corrective actions concerning, activities
designed to promote economy and efficiency in the administration of the Department's
programs; and preventing and detecting fraud and abuse in HHS' programs and operations.
In FY 1997, OIG will focus its resources in the following areas: reviewing departmental
efforts to improve children's welfare and child support enforcement collection initiatives;
evaluating providers and services in the Medicare and Medicaid programs; ensuring the
effectiveness of the public health delivery programs; and auditing management control
systems and financial operations. All of these reviews will assist HHS program managers to
improve the health and welfare of program beneficiaries.
OIG resources will also be devoted to the final phase of Operation Restore Trust. Under this
project, OIG, HCFA and AoA will continue their interdisciplinary teams of Federal, State,
and private sector representatives targeting health care fraud and abuse in California, Florida,
New York, Texas and Illinois--these five States account for more than a third of all Medicare
beneficiaries and nearly 40 percent of Medicaid recipients. The project team is focusing on
the three fastest growing areas of Medicare expenditures: nursing facilities, home health,
and durable medical equipment.
The Medicare Anti-fraud and Abuse Program (MAAP) is a proposed new initiative to restore
trust and accountability to Medicare. This program would build on the proven effective
aspects of Operation Restore Trust, enhance general Medicare fraud protection activities,
allow OIG to pursue innovative anti-fraud initiatives, enhance data systems to assess trends
and identify possible fraud and abuse, and expand OIG resources by retraining and adding
89
staff to those parts of the country where fraud schemes are unfolding. Should this legislation
be enacted, an additional $54 million will be added to supplement OIG's current effort.
In FY 1995, OIG asserts that its
activities resulted in over $10.2
Savings to Federal Government
billion in settlements, fines,
FY 1981 and 1991 - 1995
restitutions, receivables and
$12
savings to the Federal
Government. The OIG asserts
$10
$10.2
that the return on investment
$8
$8.1
increased from $160,000 per
OIG FTE in 1981 to $9.7 million
$ In billions
$6.8
$6
$5.9
$6.1
in 1995, and from $4 in savings
$4
for every OIG budget dollar
spent in 1981 to $115 in savings
$2
for every OIG budget dollar
$0
$0.2
spent in 1995. These amounts
1981
1991
1992
1993
1994
1995
are based on independently
scored estimates from the
Congressional Budget Office,
HCFA actuaries, and HHS Program administrators. During the same time period, successful
judicial prosecutions rose from 165 in FY 1981 to 620 in FY 1995. Administrative sanctions
against individuals or entities that defrauded or abused HHS programs and/or beneficiaries
also rose from 39 in FY 1981 to 1,563 in FY 1995.
OIG is continuing to streamline
its operations and management
structure to minimize costs and
OIG Return on Investment
ensure that the greatest portion of
its resources are concentrated on
Savings per dollar Invested
investigations, audits, and
inspections.
OIG is also reinventing its
$4
processes and exploring creative
$115
1981
ways to effectively deploy its
resources to aggressively combat
1995
fraud, abuse, and waste in the
Department's programs,
including:
90
Administrative Operations Service
The Administrative Operations Service (AOS) supports the administrative management
functions within the Department in the areas of property and material management, and
support services ranging from telecommunications services and commercial graphics to mail
distribution. Included is the operation of a medical supply depot located in Perry Point,
Maryland, that provides support to over 1,700 customers on a worldwide basis and is an
economical source of supply for all Federal customers. The FY 1997 estimated expenses of
$142 million for AOS includes a $5 million increase for the expansion of product lines within
the Supply Service Center and increased communication capabilities through the
Telecommunication Improvement Project. This project consolidates telephone services under
one contract; this collective bargaining results in savings of up to one-third in the rates
charged by the telephone company for services to agencies in the Parklawn Complex and the
National Institutes of Health campus.
Information Technology Service
The FY 1997 estimated expenses for the Information Technology Service (ITS) is
$11 million. The ITS provides automated data processing (ADP) services for HHS and other
Federal entities. It provides its customers with various ADP services, resources, technical
support and ADP planning assistance. In addition, the ITS develops and operates the
Departmental Information Management Exchange System, a nationwide telecommunications
network, and serves as the HHS Executive Agent for Department-wide connectivity.
93
PROGRAM SUPPORT CENTER
ENTITLEMENT SPENDING
Retirement Pay and Medical Benefits for Commissioned Officers
(Dollars in millions)
1995
1996
1997
Increase/
Actual
Estimate*
Estimate*
Decrease
Retirement Payments
$112
$130
$136
+ $6
Survivors' Benefits
8
9
11
+2
Medical Care
22
25
26
+1
Military Service Credits
2
3
3
0
Total, BA
$144
$167
$176
$9
Outlays
$152
$167
$176
$9
*
Funding levels are based on the Administration's most recent estimates of entitlement
spending under current law.
Summary
This appropriation provides for retirement payments to Public Health Service (PHS)
Commissioned Officers and payments to survivors of deceased retired officers. This account
also funds the provision of medical care to active duty and retired members and to
dependents of active duty, retired and deceased members of the PHS Commissioned Corps.
In addition, this account includes amounts to be paid to the Social Security Administration
for military service credits which are earned by active duty Commissioned Officers for
non-wage income.
94
Establishing partnerships with State auditors under which OIG provides States with
audit methodologies for their use in conducting audits of HHS health care programs.
In addition to recovering taxpayer dollars, these partnerships will also result in
program improvements and a reduction in the cost of providing needed services to
Medicaid and other recipients.
Conducting joint investigations with other Federal law enforcement agencies,
including the Secret Service, the Federal Bureau of Investigation (FBI), the Internal
Revenue Service, the Postal Inspection Service, State governments, other Inspector
General offices, and the HHS OPDIVs.
As part of Operation Restore Trust, a "voluntary disclosure" program is being piloted
that encourages corporate health care providers to disclose potential instances of fraud
and abuse that the providers themselves have discovered within their corporations.
OFFICE OF INSPECTOR GENERAL SUMMARY
(Dollars in millions)
1995
1996
1997
Request
Actual
Policy*
Request
+/- Policy
Total, BA
$79
$74
$75
+1
FTE
927
927
927
0
*
Based on levels of the ninth CR.
91
PROGRAM SUPPORT CENTER
HHS Service and Supply Fund
(Dollars in millions)
1995
1996
1997
Increase/
Actual
Estimate
Estimate
Decrease
Expenses
$225
$232
$237
+$5
FTE
1,261
1,261
1,261
0
Summary
The Program Support Center (PSC) is a new Operating Division formed by combining the
administrative activities formerly located in the Office of the Secretary (OS), and funded by
the OS Working Capital Fund, with activities from the Office of the Assistant Secretary for
Health, and funded by the Public Health Service (PHS) Service and Supply Fund. The
formation of the PSC resulted from the Department's REGO II analysis with a goal of
further streamlining and minimizing duplication of functions in the provision of cost-effective
administrative services to components of the Department and other Federal agencies.
Services will be provided in four broad business areas: human resources, financial
management, administrative operations, and information technology.
Human Resources Service
The FY 1997 estimated expenses for the Human Resources Service (HRS) are $43 million.
HRS provides a full range of personnel management services including payroll management
and operations; personnel operations services for civilian and commissioned personnel;
common needs training; employee relations and labor relations; and administration of the
Board for Corrections of PHS Commissioned Corps Personnel Records.
Financial Management Service
The Financial Management Service (FMS) estimates its expenses at $41 million for FY 1997.
FMS supports the financial operations of HHS and other Federal Departments through the
provision of payment management services for departmental and other Federal grant and
program activities; accounting and fiscal services; debt management services; and the review,
negotiation and approval of rates, including indirect cost rates, research patient care rates,
and fringe benefit rates.
92