Medical Funding at Risk if Super Committee Fails
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Mary Agnes Carey,
Kaiser Health News
October 17, 2011

While the committee can chop Medicaid and Medicare as part of a negotiated agreement, automatic cuts would not affect Medicaid funding; there would be a 2 percent reduction in Medicare payments to hospitals and other providers. That would make the hit to many other programs all the more severe.

“I don’t know if a lot of people have appreciated how big a hit the discretionary health programs” could take if there are automatic cuts, said Richard Deem, senior vice president of advocacy for the American Medical Association. “I think a lot of people are going to wake up to that too late.”

At stake is federal money that, among other things, helps HIV patients pay for lifesaving medication, funds biomedical research and helps prevent and respond to food borne illnesses and disease outbreaks.

Automatic reductions, for example, could translate into less staff to handle food contamination, said Georges Benjamin, executive director of the American Public Health Association. Recently, Colorado cantaloupes sickened 116 people in 25 states with listeria, killing 23, according to the Centers for Disease Control and Prevention. “Someone has to go into stores and make sure the stuff has been taken off the shelves. I am very worried about what [automatic cutting] does to the public’s capacity to be safe.”

If the full $1.2 trillion in automatic cuts go into effect, funding for non-defense discretionary programs in 2013 would face reductions of 7.8 percent, dropping each year to 5.5 percent in 2021, according to Congressional Budget Office estimates. Richard Kogan, a senior fellow at the Center on Budget and Policy Priorities, places the first year’s hit at over 9 percent, however.

Health advocates fear deep cuts will harm the public by reducing services and investment in several areas, including:

Public health.  Centers for Disease Control and Prevention is particularly vulnerable because it was hit hard in the last round of budget cuts, according to Benjamin. In fiscal year 2011, federal funding for the CDC declined by $740 million. “They’ve already cut deeply into the bone at CDC,” he said.

The agency plays an important role in detecting and responding to emergencies such as tornadoes, hurricanes, food-borne illnesses, and infectious disease outbreaks. It also helps fund state and local public health departments and labs, which Benjamin said is extremely important as states struggle with massive budget deficits. Since 2007, he said, 44,000 jobs in local and state health departments have disappeared. “What ultimately happens is you do less things. You inspect restaurants less. You inspect wells less.”

The CDC also subsidizes the cost of vaccines for uninsured and underinsured children. The prices of standard childhood vaccines are rising, Benjamin said. “The more vaccines we require kids to have, the less money we have to pay for it. If we discovered tomorrow a marvelous new vaccine, we probably wouldn’t have the resources to put that into place.”

Medical research. U.S. investment in biomedical research is beginning to lag behind some other nations, namely China and India, at a time when robust funding could help with job creation, Director Francis Collins said at a May hearing of the Senate Appropriations subcommittee on Labor, Health and Human Services and Education.

Collins said at the hearing that the BGI genome center in Shenzhen, China, “is capable of sequencing more than 10,000 human genomes a year. The capacity of that one Chinese institution now surpasses the combined capacity of all genome sequencing centers in the United States.”

“This critical area of scientific innovation stimulated by the U.S.-led Human Genome Project is now being developed more aggressively in China than it is here – a sobering story indeed and one that I hope would inspire our nation to redouble its efforts on the research front.”

Congress in recent years has given NIH small increases that haven’t kept pace with medical inflation, advocates claim. Funding actually declined in 2006. Lawmakers are still negotiating funding levels for fiscal year 2012, which began Oct. 1. House appropriators are considering a small increase in NIH funding, while their Senate counterparts are contemplating a small reduction. Reductions in NIH funding “will lessen the chance of research breakthroughs in cancer. It will interrupt clinical trials at the National Cancer Institute,” said Dick Woodruff, vice president of federal relations and strategic alliances at the American Cancer Society’s Cancer Action Network.