Washington D.C., February 5, 2002 - The Association of American Medical Colleges (AAMC) issued its qualified support today for President Bush's FY 2003 budget proposal. While the AAMC wholeheartedly applauds the administration's proposed budget increases for the National Institutes of Health (NIH) and bioterrorism preparedness, the association believes the budget has serious gaps that threaten the essential hospital services that undergird the nation's homeland security and health care safety net.

The AAMC is pleased that the President's budget plan requested $27.3 billion for the NIH, fulfilling the commitment to double the agency's budget by 2003. Included is a federal investment of $1.7 billion for bioterrorism research at the NIH. The Bush budget proposal also includes a four-fold increase for hospital preparedness initiatives, which received $135 million in FY 2002. The association also welcomes President Bush's 10 percent increase for the Veterans Administration's medical care and research programs and a 5 percent increase for National Science Foundation research.

However, other areas, such as the Health Resources and Services Administration (HRSA), will receive deep cuts under the Bush budget plan. The Health Professions programs at HRSA, for example, are slated for a 75 percent cut, virtually eliminating these programs that educate and train health care providers in rural and underserved communities.

"It's absolutely essential that medically underserved areas have a broad range of health care workers who can provide quality care," said Jordan J. Cohen, M.D., AAMC president. "While the National Health Service Corps will help boost the number of primary care physicians in medically underserved areas, it will not increase the broad range of health care providers who are essential to delivering comprehensive patient services to those most in need."

In addition, while the Agency for Health Research and Quality (AHRQ) will receive a $5 million increase to improve patient safety, overall funding for research areas supported by AHRQ, such as effective care and reducing health care costs, will be cut by 15 percent.

Budget Impact on Medicare, Teaching Hospitals and Physicians

The AAMC applauds President Bush for not including any new major Medicare cuts in his proposal, but is disappointed that the budget did not reverse the scheduled cut to Medicare Indirect Medical Education payments. These funds reimburse teaching hospitals for the higher costs associated with specialized services, such as trauma centers, burn units and transplant centers. Furthermore, even though the budget acknowledges the current difficulties with physician payment methodology, the AAMC disagrees with the notion that any changes in the methodology should be done at the expense of the other providers.

While it is evident that the Bush administration has an interest in expanding access to health care coverage, the association continues to be disappointed with the changes in regulations to the Medicaid Upper Payment limit and the elimination of funding for the Community Access Program. These mechanisms provide important funding to bolster the nation's health care safety net. Alternative solutions must be put into place before funding for such programs are eliminated.

"Even though our attention is understandably focused on the fight against terrorism, we must remember that the best defense against any future attacks is a healthy nation," said Dr. Cohen. "In the coming months, we will work with the administration and Congress to achieve a balance in federal budget priorities that strengthens America's health care safety net and supports the nation's teaching hospitals and physicians."

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The Association of American Medical Colleges represents the 125 accredited U.S. medical schools; the 16 accredited Canadian medical schools; some 400 major teaching hospitals, including Veterans Administration medical centers; more than 105,000 faculty in 98 academic and scientific societies; and the nation's 66,000 medical students and 97,000 residents. Additional information about the AAMC and U.S. medical schools and teaching hospitals is available at www.aamc.org/newsroom.

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The Association of American Medical Colleges is a not-for-profit association representing all 129 accredited U.S. and 17 accredited Canadian medical schools; nearly 400 major teaching hospitals and health systems, including 68 Department of Veterans Affairs medical centers; and 94 academic and scientific societies. Through these institutions and organizations, the AAMC represents 109,000 faculty members, 67,000 medical students, and 104,000 resident physicians. Additional information about the AAMC and U.S. medical schools and teaching hospitals is available at www.aamc.org/newsroom.

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