Pages 51 - 69 BACKUP DOCUMENTATION BUDGET CATEGORY Public Health Service BUDGET PROJECTIONS: (billions of dollars) Fiscal Years 1995 1996 1997 1998 1999 2000 1995-2000 Budget Authority 1.1 3.0 3.8 4.2 4.1 3.7 19.9 Total Outlays 0.4 1.5 2.6 3.3 3.7 3.8 15.3 Details of the Public Health Service initiatives planned as part of health reform are shown in the following tables in this section. These budget estimates are presented in terms of proposed Budget Authority. Actual outlays will differ somewhat from the BA because of differences of timing. Total outlays for the PHS initiatives are shown above. [Page 51] PUBLIC HEALTH SERVICE Health Care Reform Budget Public Health Initiative (Dollars in Millions) FY '95 FY '96 FY '97 FY '98 Incrmnt Incrmnt Incrmnt Incrmnt Program/Activity Capacity Expansion/Enabling Community/Migrant Health Cntrs $100 $100 $100 $100 Capacity Expansion 200 500 600 700 Enabling Services 0 200 300 300 Subtotal 300 800 1,000 1,000 Workforce National Health Service Corps 50 100 200 200 Health Professions 1/ 20 200 200 200 Academic Health Centers 3 4 5 5 Subtotal 73 304 405 405 School-Based Health School Related Health Services 0 100 275 350 School Health Education 50 50 50 50 Subtotal 50 150 325 400 Health Research Initiatives Prevention Research (Sect 3201) 400 500 500 500 Health Service Research 150 400 50 600 (Sect. 3202) Subtotal 550 900 1,000 1,100 Indian Health Supplemental 40 180 200 200 Services Mental Health & Substance Abuse 100 150 250 250 Public Health Services Core 12 325 450 550 Priority 0 175 200 200 Subtotal 12 500 650 750 TOTAL $1,125 $2,984 $3,830 $4,205 ----------------------- Continued FY '99 FY 2000 Six Year Incrmnt Incrmnt Total Program/Activity Capacity Expansion/Enabling Community/Migrant Health Cntrs $100 $100 $600 Capacity Expansion 500 200 2,700 Enabling Services 300 100 1,200 Subtotal 900 400 4,500 Workforce National Health Service Corps 200 200 950 Health Professions 1/ 100 100 820 Academic Health Centers 5 5 27 Subtotal 305 305 1,797 School-Based Health School Related Health Services 400 400 1,525 School Health Education 50 50 300 Subtotal 450 450 1,825 Health Research Initiatives Prevention Research (Sect 3201) 500 500 2,900 Health Service Research 150 600 600 2,850 (Sect. 3202) Subtotal 1,100 1,100 5,750 Indian Health Supplemental 200 200 1,020 Services Mental Health & Substance Abuse 250 250 1,250 Public Health Services Core 650 750 2,737 Priority 200 200 975 Subtotal 850 950 3,712 TOTAL $4,055 $3,655 $19,854 [Page 52] Health Security Act Public Health Initiatives The President's Health Security Act includes a $20 billion initiative over the next 6 years to expand Public Health Service activities that are essential to successful implementation. This initiative begins with $1.25 billion in FY 95, $2.98 billion in FY 1996, grows to $4.2 billion in FY 1998, and levels off at $3.6 billion in FY 2000. The additional resources in FY 1995 and FY 1996 represent an increase of 5 percent and 14 percent respectively over the resources available to PHS in appropriations bills (conference action) for FY 1994. These PHS initiatives are central to achieving the prevention, access, quality, and cost effectiveness goals articulated in the President's plan. These initiatives, included in Title III and Title VIII of the Health Security Act, are divided into seven major elements: * Workforce Priorities - A new national council on graduate medical education (GME) is established to allocate specialty positions in a manner that: expands training capacity to support a shift to training 55 percent of new physicians in primary care; expands recruitment and financial assistance programs to increase the number of minority students in the health professions; and supports expansion of priority nurse training initiative including advanced practice nursing, faculty development, school nurse training, and development of data systems. * Health Research Initiative are expanded to -- Provide research on prevention and high cost/debilitating diseases (e.g. Alzheimer's disease) and areas such as children's health, breast cancer, and reproductive health and translate advancements into the health delivery system to help control health care costs and improve the quality of life. -- To accelerate health services research including quality measurement and improvement, efficiency, and effectiveness of the health care delivery system. * Core Functions of Public Health Programs and Preventive Health - support for public health agencies and community-based organizations to improve the health of populations and to control health care costs through: [Page 53] * Core Public Health - to reduce preventable disease and disability and their attendant costs to the personal health care delivery system by supporting states to strengthening their state and local health departments' capacity to carry out core public health functions that protect whole communities from infectious diseases, environmental hazards, and preventable injury and provide population-based prevention education and community mobilization regarding behavioral and environmental risks. -- National Initiatives Regarding Preventive Health - to achieve measurable reductions in preventable disease, disability. and death by supporting public and private non-profit agencies at the community level to address priorities defined through the Health People 2000 process with community-based, innovative interventions affecting special population groups and involving regional and state variation in level of need. * Health Services for Medically Underserved Populations - Capacity expansion and enabling initiatives are essential to ensure that underserved populations have access to the services to which they are entitled under the Health Security Act. Activities include support for: -- the development of practice networks and community-based health plans; -- information systems and telecommunications linkages; -- acquisition, construction, or renovation of delivery sites; major equipment purchases; establishing financial reserves; and other capital needs of health care providers; -- expansion of Community and Migrant Health Centers (C/MHCs); and -- the provision of outreach and enabling services to ensure that low-income, hard-to-reach, and culturally diverse populations are able to use the health care system effectively; -- expand from 1,600 to 8,000 by 2005 (when full effects are felt) the number of National Health Service Corps (NHSC) providers available to serve underserved populations; * Mental Health and Substance Abuse - support is expanded for wrap-around services for the most vulnerable populations of our society, which includes over 2.5 million persons in poverty who are homeless, seriously mentally ill, or diagnosed to have mental health and/or substance abuse problems. * Comprehensive School-related health activities - by FY 1999 provide health services to 3.2 million students in 3,500 schools with a high proportion of low-income populations. Also, a $50 billion health education program will be implemented for children in grades Kindergarten through 12. * Indian Health - expand enabling services to help raise the health status of American Indians and Alaskan populations to that of the rest of the United States covered under teh Health Security Act. [Page 54] Health Security Act Public Health Initiative (Dollars in Millions) Title III, Subtitle E - Health Services for Medically Underserved Populations Part 1 - Community and Migrant Health Centers FY1995 Fy1996 FY1997 FY1998 FY1999 FY2000 Fy1995-2000 $100 $100 $100 $100 $100 $100 $600 The Community and Migrant Health Center program is a successful program that currently provides a range of primary care, specialty care, and enabling services to 6.8 million American living in Federally-designated underserved areas. Twice as many projects are approved in this program than can currently be funded. An additional investment of $100 million annually over six years will expand the reach of this program to an additional 2 million individuals, meeting 7% of the current unmet capacity needs in underserved areas. [Page 55] Health Security Act Public Health Initiative (Dollars in Millions) Title III, Subtitle E - Health Services for Medically Underserved Populations Part 2 - Initiative for Access to Health Care Subparts A, B, and C FY1995 FY1996 FY1997 FY1998 FY1999 FY2000 FY1995-2000 $200 $500 $600 $700 $500 $200 $2,700 This transitional program supports capacity expansion in underserved areas in ways that build on existing resources in each community and that are responsive to local circumstances and needs. With a $2.7 billion investment over six years, the program will fully address the estimated need for information system and telecommunications (exclusive of highway costs) in underserved areas; provide all federally-funded and other practitioners in underserved areas with the skills and support the need to form practice networks or health plans; meet most of the need for new practice sites in underserved areas; support renovations to improve the practice environment for 3800 practitioners working in C/MHCs and other existing sites in underserved areas; and address much of the capital needs of rural and public hospitals. [Page 56] Health Security Act Public Health Initiatives (Dollars in Millions) Title III, Subtitle E - Health Services for Medically Underserved Populations Part 2 - Subpart D: Enabling services Fy1995 FY1996 FY1997 FY1998 FY1999 FY2000 FY1995-2000 $0 $200 $300 $300 $300 $100 $1,200 This program ensures that low income, hard to reach, culturally diverse populations have access to the services to which they are entitled under reform by providing them with the supplemental services they need to use the health care system effectively. With a $1.2 billion investment over six years, the program will support the provision of transportation, translation, outreach, follow-up, and child-care services to 6 million individuals not served by other programs. [Page 57] Health Security Act Public Health Initiatives (Dollars in Millions) Title III, Subtitle E - Health Services for Medically Underserved Populations Part 3 - National Health Service Corps FY1995 FY1996 FY1997 FY1998 FY1999 FY2000 FY1995-2000 $50 $100 $200 $200 $200 $200 $950 The National Health Service Corps assures the availability of physicians and other health professionals in severely underserved rural and urban communities. Of the 72 million Americans who live in underserved areas, 33 million currently lack a regular source of care. The NHSC provides scholarships and repayment of student loans to health professionals who agree to serve at least two years in these areas. The NHSC would be expanded by increasing the number of NHSC scholarships and loan repayments from approximately 800 in 1994 to 1,800 in 1996 and to 2,800 in 1998 and subsequent years. The NHSC field strength would grow from its level of 1,600 providers in 1993 to 5,300 providers serving over 8 million people in 1998. NHSC field strength would plateau at about 8,000 providers by the year 2005. Placements are prioritized by severity of need and these providers would serve the most difficult to reach one-third of underserved communities with providers distributed fairly evenly between rural and urban sites. [Page 58] Health Security Act Pubic Health Initiatives (Dollars in Millions) Title III, Subtitle A - Workforce Priorities Under Federal Payments Institutional Costs of Graduate Medical Education: Workforce Priorities FY 1995 FY 1996 FY 1997 FY 1998 FY 1999 FY 1995-2000 $20 $200 $200 $200 $100 $820 The nation currently trains far too many physicians in specialties and too few in primary care. This distortion of the workforce contributes to the high cost of care. There are also too few mid-level professionals trained and the workforce lacks diversity to assure adequate access to care for all groups in the population. In a new system with more limited specialty training, the number of new medical school graduates who choose primary care training programs needs to increase from present level of 4,000 per year to 9,000 or 55 percent of all new graduates. Similarly, estimates indicate that the number of mid-level providers should increase from the current 2,500 per year to 5,000 per year. Finally an estimated 23,000 minority students could benefit from expanded recruitment programs, with about 8,500 students in such programs now. Funds support the transition of physician training to primary care by increasing Federal assistance for primary care programs by 50%. These funds help meet the need for more graduates who choose primary care by supporting faculty and curricula development and expansion of 2,500 additional positions. Mid-level providers will increase to about 4,000 graduates per year to meet 80 percent of the projected need. Minority recruitment programs will expand to reach about 12,500 students each year, about 50% of the projected goal. Support for physician retraining programs will begin an effort to redirect physicians currently trained as specialists into primary care. Expanded support will be provided for a range of nursing programs, including school nurse training, geriatric nursing, development of innovative education and practice models, and other priority nursing projects. Public health training support will also increase. [Page 59] Health Security Act Public Health Initiatives (Dollars in Millions) Title III, Subtitle B - Academic Health Centers FY 1995 FY 1996 FY 1997 FY 1998 FY 1999 FY 2000 FY 1995-2000 * * * * * * * The Health Security Act establishes formula payments to Academic Health Centers (AHCs) to assist eligible institutions with costs incurred by virtue of their training function. These funds will help cover such costs as: reduced rate of productivity of faculty due to teaching responsibilities; uncompensated costs of clinical research; and exceptional costs including treatment of rare diseases, treatment of unusually sever conditions, and providing other specialized health care. The President's Health Security Act contemplates stronger ties between academic health centers and providers in urban and rural areas. The Act authorized grants to assist academic health centers establish referral networks and educational alliances in such areas. * A new Academic Health Center account is established (outside the PHS initiative) to fund these activities as follows: 1996, $3,100 million; 1997 and 1998, $3,200 million; 1999, $3,700 million; and 2000, $3,800 million. [Page 60] Health Security Act Public Health Initiatives (Dollars in Millions) Title III, Subtitle G - Comprehensive School Health Education; School Related Health Services Part 5 - School Related Health Services FY1995 FY1996 FY1997 FY1998 FY1999 FY2000 FY1995-2000 $0 $100 $275 $350 $400 $400 $1,525 Only 500,000 children in America's middle and high schools have access to school based or school-linked clinics. Yet, according to a 1992 Department of Education survey, 5.4 million students age 10-19 in 9,411 middle and high schools with a high prevalence of poverty and other risk factors (schools where at least thirty percent of the student are eligible for subsidized meals) are estimated to be in need of these services. These young people, who frequently engage in high risk behaviors, experience multiple non-financial barriers to health care. These barriers included reluctance to seek help, lack of parental availability, and lack of knowledge about what help may be available and how to get it. This initiative will improve access to health and psycho-social services to up to 3.2 million children in over 3,500 schools (priority will be given to schools with the highest percentage of children in need) by providing health services where they spend most of their time. As a result of targeting services in high-need areas, there will be a reduction in the preventable morbidity and mortality that children and adolescents experience. Grants to states and local consortia will support the provision of services at sites throughout the country in areas of greatest need. [Page 61] Health Security Act Public Health Initiatives (Dollars in Millions) Title III, Subtitle G - Comprehensive School Health Education; School Related Health Services Parts 2, 3, and 4 FY1995 FY 1996 FY1997 FY1998 FY1999 FY2000 FY1995-2000 $50 $50 $50 $50 $50 $50 $300 The health problems that plague our children and adolescents, and the adults they become, are cause primarily by behavioral patterns usually established during youth. Research has shown that initiation of these behaviors can be delayed, reduced, or prevented through school based health education programs. Yet U.S. Department of Education data show only 12 percent of 10th graders and 2 percent each of 11th and 12th graders received any health education credits in school. This initiative will provide grants to every state as well as 20 of the largest Local Education Agencies to enable them to implement comprehensive school health education programs. It contains waiver authority to leverage existing health education monies. State education and health agencies will be expected to collaborate in developing plans targeted to students at highest risk while integrating new funding with existing categorical funding to provide comprehensive health education services. [Page 62] Health Security Act Public Health Initiatives (Dollars in Millions) Title III, Subtitle C: Health Research Initiatives Prevention Research FY1995 FY1996 FY1997 FY1998 FY1999 FY2000 FY1995-2000 $400 $500 $500 $500 $500 $500 $2,900 Prevention research is the foundation for clinical preventive services an public health interventions which are integral components of efforts to reduce the burden of avoidable disease, disability, and death. A renewed emphasis on prevention research is necessary to ensure the availability of effective preventive measures against existing disease, as well as new and emerging threats to the health of Americans. Progress in preventing disease will help to offset escalating acute health care costs and the disproportionate impact of disease and disability among women, minorities, and the elderly. NIH is the Federal Government's lead agency for biomedical and behavioral research and has the expertise to plan, coordinate, and implement a prevention research agenda to support health care reform. Prevention research findings will be translated into, or appropriately integrated with personal health services and public health programs to maximize the impact of prevention research on disease reduction and improved health status. The Prevention Initiative will contribute to more effective and efficient measures to prevent the onset of disease and disabilities that now affect tens of million of Americans. For example, delaying the onset of Alzheimer's disease by an average of five years would cut in half the costs associated with this disease, currently estimated at $90 billion annually. [Page 63] Health Security Act Public Health Initiatives (Dollars in Millions) Title III, Subtitle C: Health Research Initiatives Health Services Research FY1995 FY1996 FY1997 FY1998 FY1999 FY2000 FY1995-2000 $150 $400 $500 $600 $600 $600 $2,850 The DHHS supports a broad based program of investigator-initiated and directed research on cost, quality, and access issues in health care delivery. This research will inform practitioners, managers, purchasers, providers, and consumers under the Health Security Act. The basic principle underlying the President's Health Security Act is that we can provide better quality of care to more people at less cost. To support the achievement of these objectives, DHHS will expand its research program to: 1) develop the science base on what works best in medical care to identify practice variations with unnecessarily high costs and no added clinical benefit; 2) develop quality and performance measures and related information to assist consumers, practitioners, and plans in making good health care decisions; 3) significantly expand medical effectiveness research and practice guidelines development, dissemination and evaluation to improve the treatment decisions made by physicians, thereby contributing to cost-containment by reducing unnecessary care; 4) design and test clinical and administrative data systems and technologies to expedite administrative simplification and lower administrative costs; 5) investigate and assess the organizational, clinical, and financial alternative adopted by states during initial reform to refine and improve subsequent implementation; 6) develop approaches for improving the efficiency and equity of reimbursement and provider payment systems; and 7)determine the impact of improved primary care on access to care. [Page 64] Health Security Act Public Health Initiatives (Dollars in Millions) Title VIII, Subtitle D - Indian Health Service FY1995 FY1996 FY1997 FY1998 FY1999 FY2000 FY1995-2000 $40 $180 $200 $200 $200 $200 $1,020 The IHS provides comprehensive medical and public health services to the 1.3 million American Indians living on reservations. American Indians have among the poorest health status of all Americans: 40% reduction in years of productive life; tuberculosis rate 6 times higher than other Americans; and infant mortality 1.5 times higher than whites. Isolated living conditions, poverty, lack of available public health services, and inadequate access to care will contribute to poorer health status. Historic legal and ethical obligations require that the Federal Government provide health care and public health services to American Indians and Alaskan Natives. These obligations continue under the Health Security Act. But, health insurance alone will not improve the health of American Indians. Given existing resources only 45% of American Indians receive the necessary personal, community and environmental-based public health services. Only about half of American Indians receive necessary enabling services such as outreach, transportation and translation services. Additional funding will improve the health status of American Indians to a level closer to other Americans. Funds will increase enabling services by 2.7 million additional home and other visits, one-half million nursing visits and additional transportation and translation services to an additional 240,000 American Indians by FY 1998. Improved services will be targeted to lower rates of diabetes, alcoholism, injuries, and to improve immunization coverage. [Page 65] Health Security Act Public Health Initiatives (Dollars in Millions) Title III, Subtitle F - Mental Health; Substance Abuse FY1995 FY1996 FY1997 FY1998 FY1999 FY2000 FY1995-2000 $100 $150 $250 $250 $250 $250 $1,250 While health insurance will cover most direct acute mental health and substance abuse treatment costs, it will not ensure access to services. Research clearly shows that enabling services, such as outreach, transportation, child care, and translation services are necessary to get persons with serious substance abuse and chronic mental health conditions into treatment. Beneficiaries will include 2.5 million persons in poverty who are homeless, seriously mentally ill, or diagnosed to have both mental health and substance abuse problems. This would meet approximately one-quarter of the need nationwide. Funds would be distributed to States using the existing formula for mental health and substance abuse block grants. [Page 66] Health Security Act Public Health Initiatives (Dollars in Millions) Title III, Subtitle D - Core Functions of Public Health Programs; National Initiatives Regarding Preventive Health Part 2 - Core Functions of Public Health Programs Fy1995 FY1996 FY1997 FY1998 FY1999 FY2000 FY1995-2000 $12 $325 $450 $550 $650 $750 $2,737 The Health Security Act cannot meet its national cost containment targets if full advantage is not taken of opportunities to prevent unnecessary disease -- opportunities largely accessible through public health programs. These functions are necessary to protect whole communities from infectious disease, environmental hazards, and preventable injury and to provide population-based prevention education and community mobilization regarding behavioral and environmental health risks. Yet the resources available to support the core functions of public health are only about half the level necessary to meet basic responsibilities. Between 1981 and 1993, support for the basic public health functions fell from 1.2% to 0.9% of national health care expenditures. Concurrently, additional demands were imposed on public health agencies by problems such as HIV infection, childhood vaccine-preventable diseases, tuberculosis, violence, and the health and social service needs of young, single mothers and their children. There is a vital need to assist state and local health agencies to rebuild and strengthen their capacity to carry out their basic responsibilities for population-based programs, which have the potential to prevent diseases that otherwise drive up personal health care service utilization and cost billions of dollars to treat. Through this grant program, the Health Security Act will support states and communities to meet approximately 8% of estimated need to repair the eroded infrastructure by the year 2000. The returns to this program in terms of cost savings from reduced disease incidence - even using conservative assumptions -- will substantially exceed the investment. [Page 67] The Health Security Act Public Health Initiatives (Dollars in Millions) Title III, Subtitle D - Core Functions of Public Health Programs; National Initiatives Regarding Preventive Health Part 3 - National Initiatives Regarding Health Promotion and Disease Prevention FY1995 FY1996 FY1997 FY1998 FY1999 FY2000 FY1995-2000 $0 $175 $200 $200 $200 $200 $975 Prevention opportunities related to behavioral risks, physical and social environment, and appropriate use of clinical preventive services have been defined and quantified in the national prevention agenda contained in Healthy People 2000. Through community-based prevention approaches, it is possible to dramatically reduce premature mortality and chronic disease and disability. The need is to support public and not-for-profit agencies in devising approaches that mobilize communities to improve health of whole populations, thus effecting savings to the overall health care system. A competitive grants program will support large-scale, multi-site community-based prevention innovations, with findings from these projects disseminated through public health information network to other communities across the nation. Examples of priorities of this program and prevention of the initiative of Smoking by Children and Youth, prevention and violence, and reduction of behavioral risks contributing to chronic diseases such as heart disease, cancer, stroke, and adult-onset diabetes. [Page 68] Public Health Service Off-sets Many current Public Health Service (PHS) programs provide 'gap-filler' health service to uninsured individuals. Some PHS programs provide direct health services to selected uninsured populations, while others support disease-specific or treatment-specific medical services. For example, PHS grants support State immunization programs. The Health Security Act assurance of univeral coverage and a comprehensive benefits package directly addresses many of the 'gaps' that PHS fills. The services currently provided piece-meal through public health programs will be covered uniformly under the comprehensive benefits package, such as immunizations. Preventive, mental health and substance abuse services, and many disease-specific services, are covered under the benfits package. As health reform progresses, there will be an opportunity to redirect PHS resources to higher priority programs PHS Off-sets (outlays in $ billions) FY95 FY96 FY97 FY98 FY99 FY00 FY95-00 Offset/ 0.0 (0.3) (0.9) (1.8) (2.4) (2.6) (8.0) Redirection OL [Page 69]