Obama's Proposed Budget: More Money for Health IT, Medicare, Medicaid, NIH

The Department of Health and Human Services (HHS) would see almost a 10% increase from the current fiscal year under President Barack Obama's proposed federal budget for fiscal 2011 released today. Included in the budget are numerous areas promoting healthcare reform, including additional funding for health information technology and comparative effectiveness research.

Of the $900 billion proposed for HHS, the lion share is targeted toward Medicare at $489 billion, after recouping an anticipated $722 million through revamped efforts to detect waste, fraud, and abuse. States would receive $290 billion for Medicaid, which includes an additional $25.3 billion to extend by six months those increases included under last year's economic recovery act. Both amounts represent about a 9% increase from 2010.

Many of the items in the proposed budget appear to make reference to continuing White House attempts to reform the $2.5 trillion healthcare system. On Monday, Office of Management and Budget Director Peter Orszag said that many of the long-term fiscal gaps are being driven by healthcare costs. "That's one the reasons why the Administration has been focused on comprehensive healthcare legislation."

"Not only would it reduce the deficit over the next decade, but place the infrastructure and policies that will help to constrain costs and improve quality in the decades thereafter," he added. A section is included in the proposed budget that notes an "allowance for health reform," with a $23 billion decrease in the budget deficit noted for fiscal 2011.

One area receiving particular emphasis in the budget is health information technology, with $110 million proposed for continuing efforts to "strengthen health IT policy, coordination, and research activities."

Among other proposals are:

• Increasing the investment in comparative effectiveness research to $286 million to build on the expansion of this research begun under the economic stimulus legislation last year.


• Providing $2.5 billion for health centers for primary and preventive care to underserved populations, including the uninsured. This amount is aimed at allowing health centers to continue to provide care to the 2 million patients added through the economic stimulus legislation, and to support approximately 25 new health center sites.


• Reducing fraud, waste, and abuse by including $250 million in additional resources through expanding the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, a joint effort by HHS and Justice.


• Improving access and quality of healthcare in rural areas by including $79 million for an initiative focused on regional and local partnerships among rural healthcare providers. The goal is to increase the number of healthcare providers in rural areas, and improve performance and financial stability of rural hospitals.


• Allocating $3 billion for HIV/AIDS prevention and treatment, with the goal to develop a national HIV/AIDS strategy to reduce HIV incidence, increase access to care, improve health outcomes, and reduce HIV-related health disparities.


• Reducing childhood obesity rates by budgeting $1 billion to improve children's access to healthy meals through reauthorization of the school meals program and other child nutrition programs.


• Expanding the budget at the National Institutes of Health by $1 billion from the previous year. The NIH budget will include $6 billion to support a range of new cancer studies, including the initiation of 30 new drug trials in 2011.


• Including $222 million across HHS to expand research, detection, treatment, and other activities related to improving the lives of individuals and families affected by autism spectrum disorder.


• Increasing the number of primary healthcare providers through investing $169 million in the National Health Service Corps (NHSC) to place providers—including physicians, nurse practitioners, and dentist—in medically underserved areas.


•  Including $10 million in a federal employee workplace initiative to implement prototype wellness programs with a goal of healthcare promotion and lower healthcare costs.