Flat NIH funding again in '08; Medicaid/Medicare
President's budget fails to keep pace with inflation for fifth-straight year
Published 6th February 2007
US President George Bush yesterday (Feb. 5) sent to Congress a $28.9 billion budget request for the National Institutes of Health (NIH) for Fiscal 2008, an ostensible 0.8 percent increase of $232 million over the amount currently authorized by Congress. If enacted, it would be the fifth year in a row that NIH funding has failed to keep pace with the rate of biomedical inflation, estimated at 3.7 percent for the fiscal year starting Oct. 1, 2007.
Even though the NIH would gain a small increase, the net amount received would be far less, however, since part of the increase includes an infusion of $200 million to cover the entire U.S. government's contribution to the Global Fund to Fight HIV/AIDS, Tuberculosis, and Malaria. By that measure, NIH's budget would effectively be increased by only $32 million -- a tenth of a percent.
"We're not pleased, we're not happy, we are very concerned," said Jon Retzlaff, legislative affairs director for the Federation of American Societies for Experimental Biology (FASEB). "Technically the president can say NIH is increased by $232 million when, in effect, it's only $32 million, which is sorely inadequate," he told The Scientist.
Congress will begin holding hearings on the new budget request even though work on the current Fiscal 2007 budget remains unfinished. Lawmakers last year failed to pass Fiscal 2007 budgets for NIH and most other agencies, leaving them to operate at Fiscal 2006 levels under a continuing resolution, which expires Feb. 15.
The Senate is presently weighing a revision to that resolution that would add $620 million, or 2.1 percent, to the Fiscal 2007 request, boosting NIH's budget to more than $29 billion. If that resolution and NIH's Fiscal 2008 budget both win approval, the agency would suffer a net reduction from '07 to '08, even before factoring in the Global Fund contribution.
"This budget situation is about as confusing as I've ever seen," said Dave Moore, senior associate vice president at the Association of American Medical Colleges (AAMC). "The bottom line is the president's budget is pretty bad news for NIH," he told The Scientist.
The administration's request for NIH includes $28.7 billion in congressional appropriations and $158 million in transfers for mandated diabetes and public health research, for a total of about $28.9 billion. More than half the funds ($15.2 billion, or 53 percent) would support research project grants (RPGs) and small business awards.
The Fiscal 2008 budget, if okayed, would support about 10,188 new and competing RPGs at $3.6 billion, 566 more than this year, with the average grant size at about $350,000 and with no inflationary increases. Noncompeting grants would drop by 570 to around 26,098, amounting to $10.8 billion. National Research Service Award (NRSA) training program stipend levels would be held to Fiscal 2007 levels.
"Our immediate focus is to buttress core areas of vulnerability by maintaining an adequate pipeline of new investigators, especially in novel and recently emerging areas of opportunity," the NIH budget request states.
Funding for most NIH institutes and centers (ICs) would show only minimal increases of between 0.2 and 0.4 percent, with the major exception being the National Institute of Allergy and Infectious Diseases (NIAID), whose funding would increase by 4.8 percent -- or $210 million -- to $4.6 billion, mostly due to the infusion earmarked for the Global Fund. "Common Fund" research, controlled by the NIH director, would increase by 17 percent -- or $72 million -- to $486 million, to support trans-NIH Roadmap initiatives.
As was the case last year, the physical sciences fare slightly better. The National Science Foundation (NSF) would increase $408.8 million or 6.8 percent to $6.4 billion. Research and related activities would increase 7.7 percent or $365.7 million to $5.1 billion, while funding in the biological sciences directorate (BIO) would increase by 4.1 percent to $633 million.
The NSF budget request comes close to matching the $6.5 billion that FASEB recommended last week in its annual funding report. The NIH budget request, however, falls far short of the 6 percent increase FASEB officials say would be needed during each of the next three years to compensate for the funds lost to inflation.
What has NIH done to get on the President's list?
President Bush has released his FY 2008 budget, and the news is not good for medical research. Ironically the budget request comes out even as Congress is grappling with the finishing touches on the FY 2007 budget.
Anyway, the President's budget for NIH requests $28.6 billion, which sounds like a lot of money. (It is.) However, it's more than half a billion dollars less than the Congress is expected to finally approve for the current fiscal year, $29.2 billion.
Admittedly the 2.2 percent cut probably won't happen, at least not as drastically, because Congress will up the funding. And it comes on the heels of a doubling of the NIH budget between 1999 and 2004. So what's the big deal?
Let's ask Robert Berdahl, president of the American Association of Universities (and president of UT when I was just a wee lad on the 40 Acres):
Finally, our greatest disappointment with this budget is that it actually would cut funding of the National Institutes of Health $500 million below the amount that Congress appears poised to approve for FY2007. This erosion of the research capacity created just a few years ago by the doubling of NIH is very disturbing.
We are throwing away research opportunities that could lead to discoveries that prevent disease, extend lives, and improve quality of life. It is essential that Congress accomplish what this budget fails to, and not only sustain but increase the nation's investment in NIH research.
What he's saying is that young scientists who might have bright biomedical research ideas are going to get out of the field because their future federal funding prospects are quite bleak. Consider this depressing factoid if you're planning to become a biomedical researcher: the average age of getting your first grant is between 42 (PhD holders) and 44 years (MD/PhD). That's an amazing and damning statistic.
Now after writing all of that, I will freely admit that medical research still commands a lion's share of the public federal research budget. Look at the graphic below (reproduced in a larger size here) and ask NASA if they're crying in their beer over the poor folks at medical research institutions.
Health Industry Cool to Bush Budget Cuts
Democrats, health care providers cool to Bush's proposed cuts in Medicare, Medicaid spending
WASHINGTON, Feb. 6, 2007
By KEVIN FREKING Associated Press
(AP) Health care providers would see their reimbursement rates from the federal government go up less in coming years when they care for the elderly, poor and disabled under President Bush's budget.
The recommendations, if adopted by Congress, would trim Medicare spending by $66 billion over five years. Also, the administration will move to trim another $10 billion in Medicare spending through regulations.
Together, the changes sought for Medicare means the program would grow at a 5.6 percent clip rather than 6.5 percent, Health and Human Services Secretary Mike Leavitt said Monday.
"The program will continue to grow. It will have robust growth," Leavitt said.
Bush also calls for reducing Medicaid spending by about $25 billion over five years. That change would just slightly dent the more than $1.2 trillion the federal government will spend on the program during that span. Congress would have to sign off on about half of the proposed Medicaid savings. The remainder are regulatory changes the administration will pursue.
The two programs account for about $1 out of every $5 spent by the federal government. The president called for smaller reductions last year, and those proposals went nowhere.
Democratic lawmakers were cool to the recommendations. Rep. Pete Stark, D-Calif., said that trimming Medicaid will make it harder for states to fund health care for the poor and the uninsured.
Stark, who oversees the House Ways and Means Committee's health subcommittee, said savings can be achieved by targeting payments to health care providers, but not in the ways that Bush sought.
For example, Stark said that he believes Congress can lower payments to insurance companies that provide managed care for seniors, a concept the administration opposes.
Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, noted that the proposed Medicare reductions are more than the president asked from any previous Congress.
Baucus took issue with the changes that Bush seeks for the State Children's Health Insurance Program, which provides health coverage to about 6 million people.
The program cost about $5 billion annually. The president called for an additional $4.2 billion in funding over five years, but Baucus said it may take as much as $15 billion over the same period to maintain current health insurance coverage.
"Simply put, Congress must do more to fund the Children's Health Insurance Program than the president suggests here," Baucus said.
Some Republican lawmakers defended the president's budget. They said that entitlement programs are growing at an unsustainable rate.
"We must reform these programs in order to save them," said Rep. Jim McCrery, R-La.
But hospitals, nursing homes and other providers say that they can't afford lower payments from the government. They said that the payments won't keep up with the cost of providing health care.
The effect of the budget on providers would differ depending upon the specialty, but almost all would be affected one way or the other. The reimbursement rates for providers increase each year to account for inflation and other factors. The president wants to limit those updates, and, in some cases, such as with home health agencies and nursing homes, the payments would be frozen next year at 2007 levels.
The administration will also ask wealthier beneficiaries to pay higher premiums. Individuals who make more than $80,000 a year and couples who make more than $160,000 would pay a higher premium for their prescription drug coverage under Medicare Part D.
They already pay higher Medicare premiums for doctor visits. Under the president's proposal, the income threshold would not be indexed to increase at the rate of inflation. As a result, more and more people would fall into that category as inflation pushes incomes upward.
Many of the agencies within Health and Human Services will have to make do with about the same amount of money as they got this year.
"We are serving our citizens with compassion while maintaining sensible stewardship of their tax dollars," Leavitt said.
The budget recommends an estimated $50 million reduction for the Centers for Disease Control and Prevention, which is the principal agency for protecting the health and safety of all Americans. Funding for the agency would total $5.76 billion. Grants to states for bioterrorism preparation would be reduced, and funding remains at current levels for preventing the nation's leading health problems _ heart disease and cancer.
Meanwhile, funding for the National Institutes of Health, which oversees medical research, would rise nearly 2 percent to about $28.7 billion.
The president upped his recommendation for the Food and Drug Administration to about $2.1 billion. That's a $106 million increase compared to what he requested last year. The increases focused on strengthening food safety and getting more generic drugs to the market.
Numerous advocacy groups took issue with the president's budget.
"This is not a budget that the nationwide cancer community was hoping for after the president's visit to NIH last month to tout an historic decline in cancer deaths," said Daniel E. Smith of the American Cancer Society.
The AARP's Bill Novelli said the Medicare and Medicaid savings reflect an annual rite in Washington _ "piecemeal cuts that threaten to damage critical programs without addressing the fundamental problems that exist in our entire health care system."