While FDA and NIH would do worse... NHC: Many HHS Agencies Fare Better Under Sequester Than Under Ryan Budget


Many HHS agencies -- including CMS, Agency for Healthcare Research and Quality, and Health Resources and Services Administration -- could fare better under the across-the-board cuts mandated by sequestration than if the House-proposed budget were enacted, while FDA and the National Institutes of Health would suffer more under sequestration than they would under a House budget, according to the National Health Council. The group analyzed the impact of both sequestration and possible budget scenarios on HHS programs to help its members decide what strategies to pursue in advocating for funding for various health agencies in the coming months and years.

Marc Boutin, executive vice president and chief operating officer at the National Health Council, said the group sought to analyze the funding impact on various HHS programs if the sequestration took effect or House fiscal 2013 spending bills were enacted. If Republicans take control of the Senate in the upcoming elections there is a possibility of Congress passing a budget that would look more like the House budget, Boutin said. And if such a budget is crafted so as to eliminate sequestration, there also is a high likelihood that non-defense spending will be cut dramatically, the council said.

“We compared what will happen to some of these agencies under a budget versus what would happen under sequestration,” Boutin said.

The group -- which looked at various administration and congressional budget documents -- found while NIH would fare better under the House-proposed budget, other HHS programs, including AHRQ, HRSA and CMS' program management budget, would fare better under sequestration. FDA, although not included in the same spending bill as the other HHS programs, would also do better with the House budget than under sequestration. The Centers for Disease Control and Prevention fares about the same under both scenarios, with a slight bump under the House proposal, NHC said.

In a recent report detailing the sequestration cuts, the White House said the National Institutes of Health could see a 8.2 percent, or $2.5 billion, cut in discretionary spending, while and FDA's budget could be cut by $319 million. AHRQ, however, will not see any cuts under sequestration as its appropriations are exempt from the cuts.

But, AHRQ stands to lose all of its funding if the House GOP's HHS spending bill is enacted. House appropriators in July cleared a bill that would cut all funding for the agency, which funds research and programs at universities, hospitals and health departments, and also conducts comparative effectiveness research.

In contrast, the House appropriations bill would provide $30.6 billion for NIH in fiscal 2013, equal to fiscal 2012 and greater than what the agency would receive if sequestration takes effect. House appropriators also recommended a cut to FDA of $16.3 million in fiscal 2013 over the current year's funding level, a number which is also below what the agency stands to lose under sequestration.

Boutin said the analysis -- which was performed before the White House released details of the sequestration cuts -- could become important as the group and its member groups look to funding for HHS in the coming years, including cuts under sequestration over the next nine years.

“There are going to be significant cuts across the board to the agencies we care about,” he said. “That's the reason why I think it's important for us to think this through.”

If Congress passes a budget that eliminates sequestration, there also is a high likelihood that non-defense spending will be cut dramatically, the council said.

In some cases a sequester may be better than having a new budget out of Congress that meets lower spending targets so sequestration is not triggered, Boutin said. Under such a budget scenario, Boutin said, Congress could decide to increase funding for defense programs at the expense of non-defense programs, adding that even NIH and FDA could do worse under a budget in future years although both agencies enjoy strong bipartisan support.

“Here is the challenge,” he said. “On balance, sequestration protects the spectrum of agencies we care about throughout the entire patient community … so speaking for the National Health Council, we have to look at the entire spectrum of agencies and decide what is the best course of action.”

“I think the strategy is going to shift year to year as to how you address this,” he said, adding that while NIH fares worse under sequestration today that may not be the case in 2014. Further, agencies could be facing sequestration in 2013, followed by a congressional budget in 2014 and sequestration again in 2015.

Boutin added that while the National Health Council represents groups involving a broad array of patient and industry stakeholders, individual groups must also decide what agencies are important to them as they look to prioritize their advocacy.

In the short term, between now and the end of the year, Boutin said the National Health Council is focused on raising awareness of what the cuts will mean across the board. Boutin said the effects of sequestration on infrastructure at NIH and FDA will be felt for years to come. The group said that whatever the numbers, cumulative cuts will add up quickly and will hinder agency missions and their ability to support essential programs that address the needs of people with chronic diseases and disabilities.

“Whatever the existing budget is, it is very, very difficult to plan these outward years,” Boutin said. “You can't operate on a budget that is going to vary significantly year in and year out.”

NHC is comprised of more than 100 national health-related organizations, including patient advocacy groups as well as major pharmaceutical, medical device, health insurance and biotechnology companies. -- Nanci Bompey ( nbompey@iwpnews.com This e-mail address is being protected from spambots. You need JavaScript enabled to view it )


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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