President Bush’s new $3 trillion budget proposal for 2009 features potentially large cuts for the Department of Health and Human Services. Critics of the new budget will note that, at the same time, the budget greatly bolsters military spending. If passed as is, the Bush budget, submitted Monday, would cut the HHS budget by nearly $2 billion, or 3%. By contrast, the Pentagon would get a $35 billion increase to $515 billion for core programs, with war costs additional.

The HHS reductions would be in addition to almost $200 billion in cuts to Medicare and Medicaid over the next five years that administration officials acknowledge are in Bush’s budget. Much of the savings would come from freezing reimbursement rates for most healthcare providers for three years.

Within HHS programs, Bush would cut a $302 million program that gives grants to children’s hospitals to subsidize medical education (Medical Device Daily, Feb. 5, 2008). A $300 million program for public health improvement projects would be eliminated, while grants to improve healthcare in rural areas would be cut by 87%.

The Centers for Disease Control and Prevention’s (CDC; Atlanta) budget would face a 7% cut ($433 million).

The National Institutes of Health (NIH), which funds health research grants, would see its budget frozen at $29.5 billion.

Bush also would eliminate a new $49 million program to help states provide health insurance to people who are ailing and cannot obtain health insurance in the commercial market.

There are a few increases, however. The FDA would actually receive a 6% boost to ramp up food and drug safety efforts, with the agency requesting nearly $2.4 billion to protect and promote public health. The FY09 request, which covers the period of Oct. 1, 2008 through Sept. 30, 2009, includes $1.77 billion in budget authority and $628 million in industry user fees.

The FDA said in a statement that its budget proposal includes strategic increases to strengthen food protection, modernize drug safety, speed approval of generic drugs, and improve the safety and review of medical devices. The request also includes funds to cover cost of living increases for FDA employees that perform the agency’s scientific and highly specialized public health mission.

“The FDA is committed to protecting and promoting the health of the American people,” said FDA commissioner Andrew von Eschenbach, MD. “This budget enables us to continue development of the staff and programs necessary to safeguard the food we eat and improve the safety and development of drugs, vaccines, devices, and other medical products.”

The agency said its budget request calls for a budget of $96.4 million for medical product safety and development, with $17.4 million of that coming from Congress and the lion’s share — $79 million – coming from user fees.

The FDA said it will also work to assure the safety of domestic and imported food and medical products by conducting more domestic and foreign inspections and more inspections of high risk foods.

Bush also would significantly increase spending on the State Children’s Health Insurance Program, the focus of a fight with Congress last year.

HHS Secretary Michael Leavitt said Friday that Bush would request $19.7 billion in additional federal allotments to the states for coverage of children from low-income families in the next five years. Spending on the program from 2009 to 2013 would total $45.1 billion.

Not surprisingly, many groups were not happy with the proposed cuts to healthcare causes and made their displeasure well known.

The Alliance for a Stronger FDA (Washington) said the administration request fails to meet U.S./global needs.

The Alliance said it is “disappointed” at the proposed budget for FDA, calling instead for “budget levels that strengthen the agency and reflect the realities documented by a number of recent assessments.”

The Alliance is an organization with more than 170 members, including consumer, patient, professional and research groups; industry trade associations; and individuals who support increased Congressional funding for FDA.

“Three independent reviews, including the FDA’s own Science Board (MDD, Jan. 30, 2008), have determined the FDA is in critical need of significant new resources,” said Alliance spokesperson William Hubbard, a former Deputy Commissioner at FDA. “The amount in the administration’s proposed budget is not only inadequate, it is barely half of what FDA needs just to keep pace with inflation.”

The group said it advocates that FDA’s appropriated budget for FY09 be $2.1 billion, which will provide resources for it to start to rebuild its infrastructure and to fund its programs to assure the safety of foods and cosmetics and the safety and efficacy of drugs and medical devices. This is an increase of about $380 million, seven times the administration request, but less than 20% above the current year’s appropriation.

Daniel Jones, MD, president of the American Heart Association (AHA; Dallas) said that Bush’s last budget “will cut resources that would bring us closer to a cure [for heart disease]. We’re making steady progress in combating heart disease and stroke, but that momentum will be lost if research and prevention programs fall victim to heartless budget cuts.”

Jones said that for the sixth year in a row funding for heart and stroke research at NIH is below medical research inflation.

The Alliance for Quality Nursing Home Care (Washington) characterized the budget proposal as “far off the mark,” and said if implemented, the proposal would have serious and lasting negative repercussions on efforts to maintain the economic stability crucial to sustained quality improvement in nursing home care for 1.5 million “frail, elderly and disabled citizens.” At minimum, the group said that the proposal would slash Medicare payments to nursing homes nearly $1 billion in FY09 and an astonishing $17 billion over five years by eliminating any inflationary increases for three years and institutionalizing less than inflationary increases in subsequent years.

The Council for Quality Respiratory Care (CQRC; Washington) — a coalition of the nation’s 11 leading home oxygen therapy providers and manufacturers — expressed their disappointment in response to cuts to Medicare’s home oxygen benefit found in the proposed budget.

According to the President’s budget, the potential cuts equate to $3 billion over the next five years to home oxygen therapy, a critical care service that more than 1.4 million Americans depend on for independence and quality of life, CQRC said. The home oxygen community is already facing significant policy changes, taking affect on Jan. 1, 2009, which will impact nearly 300,000 Americans, or 22% of the Medicare beneficiaries who rely on home oxygen for their home-based care needs.

“Reforming the payment system means creating a payment system based on patient need,” said Peter Kelly, chairman of the CQRC. “Simply cutting payments for home oxygen without thoughtful analysis does not lead to reform and can lead to disruption in patient services.”

The group noted that home oxygen therapy costs the Medicare program $7.62 per day vs. as much as $4,600 per day in the hospital.

Stephen Ubl, president/CEO of the Advanced Medical Technology Association (AdvaMed; Washington) said that while is group is encouraged by the President’s commitment to provide additional resources to expand and promote the adoption of health information technology, they are “deeply concerned ... by the administration’s proposal to expand competitive bidding for diagnostic tests.”

He noted that lab tests account for less than 2% of Medicare program expenditures, but they guide 70% or more of medical decision-making. Competitive bidding could reduce beneficiary access to important tests and undermine incentives for the development of next generation molecular diagnostic tests that will move us closer to the promise of personalized medicine, he said.

He noted that AdvaMed also “is troubled by the significant reductions in payments to providers in both inpatient and ambulatory settings. These significant reductions may limit patient access to innovative new treatments and technologies that improve health and save lives.”