Obama's budget includes a tempered vision of health reform

Feb 2 2010

Democrats' health overhaul efforts are stalled in Congress, but President Obama's 2011 budget offers a "modest" back-up plan, the Associated Press reports. "The budget released Monday contains lots of respectable ideas to squeeze savings, expand coverage and improve quality, but no ambitious change that launches the nation on a path to health care for all." Those efforts include increased resources for health care fraud prevention, more help for state Medicaid programs, funding for community health centers, and pilot projects to improve care in the Medicare program. Including automatic spending on the Medicare, Medicaid and other mandatory programs, the budget totals more than $900 billion for health care (Alonso-Zaldivar, 2/1).

The Wall Street Journal reports that, while in some ways, the president "did not assume fast passage of the health bill," his budget "includes a line for 'health insurance reform' based on the average budget impact of the versions of the health bill the House and Senate passed last year. The proposal assumes that the legislation will lower the deficit by $23 billion in 2011 and by a total of $150 billion over the next decade" (Adamy, 2/1).

Peter Orszag, the White House budget chief, explains the method used by the administration to estimate those savings: "We took a very simple approach. … Since both the House and Senate had passed legislation, we took the average of the two [Congressional Budget Office estimates for total savings]," ABC News reports. A White House spokesman said the president told staff to "be realistic" in their assumptions, and that "I don't think it makes much sense to not assume that it should be in the budget" (Tapper, 2/1).

NPR reports, "Health care is a major priority in the budget. While other kinds of programs are scheduled for cuts or having their funding frozen, health care did well by comparison." Obama has proposed a three-year spending freeze on discretionary program - which would exclude Medicare and Medicaid. But, interestingly, several health programs are exceptions to the rule, including the National Institutes of Health and community health centers, programs with bipartisan support (Rovner, 2/1).

Kaiser Health News has a graphic illustrating HHS discretionary spending (Weaver and Liu, 2/2)

Kaiser Health News, in a separate story: "The Obama administration, in an effort to forge ahead with its sometimes-contentious effort to compare various medical treatments, is proposing a big boost in funding for the agency that oversees the research." The budget includes $286 million for comparative effectiveness at the Agency for Healthcare Research and Quality (Carey and Appleby, 2/1).

InformationWeek: The administration is requesting $78 million to help spread health information technology to more doctors and hospitals. The funding will build on the stimulus-spawned program to distribute $20-billion plus in incentives for providers to adopt electronic records (McGee, 2/1).

PharmaTimes: $38 million in new generic drug "user fees" will help the Food and Drug Administration pick up the pace on its reviews of generic drug approval applications. The budget also includes $51.5 million in funding for FDA's Office of Generic Drugs (Taylor, 2/1).

The New York Times: "The proposed budget, announced on Monday, now includes $6 billion for cancer research, intended to allow the [National Institutes of Health] to start 30 new drug trials and double the number of drugs and vaccines in clinical trials by 2016." That money comes as part of a $32-billion request for 2011, $1 billion more than this year (McNeil, 2/1).

HealthDay/BusinessWeek: President Obama's health department budget for 2011 tops $911 billion and includes $1.4 billion for food-safety, $1.7 billion for fraud prevention, $500 million for vaccine development, and $32 billion for medical research (Reinberg, 2/1).