Washington, D.C., February 5, 2003 - The Association of American Medical Colleges (AAMC) raised strong concerns today that President Bush's FY 2004 budget request for the National Institutes of Health (NIH) will impede efforts to take full advantage of the unparalleled research opportunities made possible by the recent effort to double federal support for the NIH. In addition, the administration's proposal threatens health care access for the poor and disadvantaged by continuing to cut programs that train health care workers in rural and underserved areas, and leaving in place cuts to Medicare and Medicaid payments to hospitals that went into effect last October.

The President's plan recommends a 2 percent increase of $549 million to the NIH budget for 2004. This would end the 14 to 15 percent annual increases provided for by the five-year doubling of the agency's budget. This dramatic decline in the rate of growth for the NIH would threaten the stability of the medical research enterprise. The AAMC supports a 10 percent increase over the NIH doubling in order to maintain the progress of the last five years.

"Unless there is sustained federal support, the recent momentum we have gained in research could be lost completely in just a few years," said AAMC President Jordan J. Cohen, M.D. "With only minimal budget increases, current research grants will be hard to maintain and innovative proposals will be put on hold at a time when the nation is confronted with health challenges ranging from new and re-emerging infectious diseases to an aging population prone to chronic diseases."

The AAMC is pleased that President Bush boosts support for the Veteran's Administration's medical care programs (up 11.4 percent), the National Science Foundation (up 9 percent), and the National Health Services Corps (up 12.7 percent).

However, like last year, the administration recommends the almost complete elimination of Title VII Health Professions Programs within the Health Resources and Services Administration. The budget removes all funding for primary care, interdisciplinary community projects, training for diversity, and public health.

President Bush also proposes $279 million for the Agency for Healthcare Research and Quality (AHRQ), claiming this amount is an 11 percent increase. However, with Congress poised to give AHRQ $300 million this year, the '04 recommendation is actually a $21 million reduction. That amount will increase to $31 million if another $10 million is transferred to the Census Bureau as proposed by the administration.

The AAMC applauds President Bush for committing to fix the problematic Medicare physician payment formula that will continue to shrink physician payments in 2003 and beyond. Even though the administration does not propose additional reductions to the Medicare and Medicaid hospital payments teaching hospitals rely on, the AAMC remains concerned about the cuts to the Indirect Medical Education (IME) payment and Medicaid Disproportionate Share Hospital (DSH) program that went into effect last October. IME payments are Medicare's special payments to teaching hospitals and DSH payments go to hospitals that serve a disproportionate share of lower income patients.

The association will review the administration's Medicare and Medicaid reform proposals in more detail in the coming weeks to determine their impact on teaching hospitals and physicians.

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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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