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House and Senate Question President’s Workforce Proposals in FY 2014 Budget

April 26, 2013—Secretary of Health and Human Services (HHS) Kathleen Sebelius testified at hearings held by the House and Senate Labor-HHS appropriations subcommittees, which examined President Obama’s budget proposal for fiscal year (FY) 2014 [see Washington Highlights, April 12]. Both hearings explored the president’s proposals for programs such as the National Institutes of Health (NIH), Health Resources and Services Administration (HRSA) Title VII health professions, Children’s Hospital Graduate Medical Education (CHGME), and the Prevention and Public Health Fund (PPHF), as well as the implementation of the Affordable Care Act (ACA, P.L. 111-148 and P.L. 111-152).

At the April 25 House Labor-HHS Appropriations Subcommittee hearing, Ranking Member Rosa DeLauro (D-Conn.) said the president’s budget does not include cuts as a result of sequestration for FY 2014, but warned if Congress is unsuccessful in avoiding the cuts the HHS budget will “look very different.” She noted, “[F]ew, if any, of the proposed increases will be possible, and instead, we will be looking at another round of harmful cuts that will be felt by constituents across the country.” Appropriations Committee Ranking Member Nita Lowey (D-N.Y.) urged the subcommittee to keep in mind that “$2.5 trillion in deficit reduction has been enacted” and said, “HHS initiatives cannot absorb further cuts.”

Rep. DeLauro said she is “encouraged” by the administration’s proposed increase for NIH, and while Rep. Lowey echoed this sentiment she added the proposed increase is “less than one third of the amount lost to sequestration this year.”

Rep. Lucille Roybal-Allard (D-Calif.) expressed concern about the administration’s progress in addressing the nation’s health disparities and, in particular, cited the HHS Action Plan to Reduce Racial and Ethnic Health Disparities, which seeks to increase the diversity of the health professions and increase diversity and cultural competency of clinicians. She said, “To date, the only HHS programs that help accomplish these goals are the HRSA Title VII programs.”

Since the president’s budget eliminates the Title VII Health Careers Opportunity Program (HCOP) and the Title VII Area Health Education Centers (AHEC) program, Rep. Roybal-Allard asked the Secretary how she expects the budget to help increase racial and ethnic diversity in workforce. In response, the Secretary said the department leaders “are very sensitive to the notion that we have to have additional recruitment and retention efforts around minority providers,” citing increases to the National Health Service Corps (NHSC) as one of these efforts. She added that the department has made it clear all programs should have an eye on minority recruitment and retention, instead of having “disparate programs that have small funding streams.”

Rep. David Joyce (R-Ohio) expressed concern about the president’s proposed cuts to Medicare, including the 10 percent cut to Medicare indirect graduate medical education (IME). Rep. Joyce drew attention to the growing primary care and specialty physician shortage, as well as the unique services teaching hospitals provide. He said that teaching hospitals receive IME to “compensate them for higher costs associated with sicker more complex patients that they care for” and that the hospitals “provide unique services available to other hospitals, such as trauma centers, burn units, and stand-by capacity.”

Rep. Joyce said a 10 percent cut will not help hospitals “finance training for the next generation of physicians when we know there is already a looming shortage” and asked the Secretary if the administration considered the impact of the IME cut to teaching hospitals’ ability to maintain these services. The Secretary responded by saying in a more “robust budget time we would make different decisions” and that the cut would come out of the overhead and not affect the number of training slots.

Similarly, Rep. Andy Harris, M.D., (R-Md.) expressed concern about the cuts to CHGME. Again, the Secretary said the cuts are to indirect costs and budget will support the same number of trainees.

Rep. Rodney Alexander (R-La.) questioned the Secretary’s ability to transfer funds through the Public Health Service Evaluation Set-Aside and asked if the Secretary thought it was a useful mechanism to have instead of appropriating funding. The Secretary called the tap an “effective tool” that allows the agency to invest in initiatives that may be short term and said programs funded through the tap, such as the Agency for Healthcare Research and Quality (AHRQ), benefit many of the different agencies within HHS.

Meanwhile, at the April 24 Senate Labor-HHS Appropriations Subcommittee hearing, Ranking Member Jerry Moran (R-Kan.) praised medical research at the NIH as an investment that saves lives and stimulates economic growth, and called for continued federal investments in medical research. Ranking Member Moran said he worries if there is a “break” in the investment, “we will lose those committed to scientific research” and risk the nation’s global competitiveness.

Similar to the House hearing, Senators discussed elimination of the Title VII AHEC program as well as cuts to CHGME.  Senator Mark Pryor (D-Ark.) expressed concerns about these workforce programs. Senator John Boozman (R-Ark.) expressed concern about the physician workforce more broadly and encouraged Secretary Sebelius to “illustrate the extent” of the workforce shortages to Congress.

Senate Labor-HHS Chair Tom Harkin (D-Iowa) expressed disappointment in the administration’s transferring funds from the PPHF to use for implementation of ACA’s health insurance exchanges. Chairman Harkin said he is “beyond upset,” and Ranking Member Moran echoed the Senator’s concerns about the transfer of funds, adding we can't continue the “haphazard rob-Peter-to-pay-Paul strategy.”

Secretary Sebelius said the PPHF dollars will not be used to build the exchanges, but on “outreach and education efforts” to ensure the “most vulnerable” communities have access to prevention benefits that are part of insurance coverage.

Other Members of the House and Senate questioned the cost of implementing the ACA, as well as potential adverse effects of the implementing the exchanges.


Alexandra Khalife
Legislative Analyst
Telephone: 202-828-0418


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