* HHS proposes $80.1 billion budget for fiscal 2014
* Increases spending mental health, gun violence research
* Proposes cuts to Medicare
By Toni Clarke
WASHINGTON, April 10 President Barack Obama's
proposed 2014 budget includes an increase of $3.9 billion to the
health department as it prepares to implement the
administration's healthcare overhaul, setting money aside for
mental health, but cutting medicare.
The budget asks for $1.5 billion in increased funding to
help set up healthcare exchanges and educate consumers on the
enrollment process, which is scheduled to begin on Oct. 1. The
exchanges are to begin providing coverage on Jan. 1.
The increase would contribute to a budget of $80.1 billion
for the Department of Health and Human Services, up nearly $4
billion over 2012. The 2013 budget is still being finalized.
"Even as it invests in areas that we know are critical for
our future prosperity, the budget also contributes to the
president's goal of cutting the deficit in a balanced way,"
health secretary Kathleen Sebelius said at a news briefing in
Washington on Wednesday.
"That means safeguarding every dollar, cutting waste and
duplication, seeking out savings wherever we can and making some
very difficult choices we wouldn't have made at other times."
The budget calls for cuts to Medicare as part of a broad
plan to reduce the program's costs by roughly $400 billion over
the next decade. At the same time, it proposes $130 million in
funding for mental health services and additional funding for
research into gun violence following the Newtown, Connecticut,
school shooting in December.
"While we know the vast number of Americans who struggle
with mental illness are not violent, recent tragedies have
reminded us of the staggering toll that untreated mental illness
takes on our society," Sebelius said.
The Centers for Disease Control and Prevention will receive
more than $30 million to support a nationwide violent death
surveillance system and conduct research on the causes and
prevention of gun violence.
The budget increases funding for the Food and Drug
Administration by $821 million and provides $31 billion to the
National Institutes of Health to, among other things, fulfill
the government's commitment to enhance research into Alzheimer's
Of the FDA's proposed total budget of $4.7 billion, $295.8
million would be earmarked for food safety, including the
implementation of the new Food Safety Modernization Act.
The food safety funding would consist of $43.4 million in
taxpayer money and the rest in industry fees, including $58.9
million from food facilities for registration and inspection and
$165.7 million from food importers.
Under the new safety law, the FDA for the first time will be
allowed to penalize U.S. companies that fail to monitor produce
they import from abroad. The Act was signed into law in January
2011 and represents the most sweeping reform of food safety laws
in more than 70 years.
"The budget proposal is a significant investment in food
safety," said Sandra Eskin, project director of the Food Safety
Campaign at The Pew Charitable Trusts.
The FDA's commissioner, Dr. Margaret Hamburg, who appeared
with Sebelius at the news briefing along with an array of other
government health officials, described the agency's budget as
"austere." She said 94 percent of the budget would come from
user fees paid by industry.
The health department's budget assumes a permanent change to
the way Medicare pays physicians. The current formula, known as
the "sustainable growth rate" has called for reductions in
physician payment rates since 2002, but each year Congress has
blocked the reduction.
The government said it supports a period of payment
stability lasting "several years" to allow time to develop new
payment models that would reward healthcare practitioners who
provide high-quality efficient care.
The budget also reduces the federal subsidy of Medicare
costs for wealthier people and lists savings from reducing the
length of time given to biologic drugs to 7 years from 12 years,
allowing generic drugs to enter the market sooner.
Savings are also expected from a proposal that would allow
the Federal Trade Commission to prevent branded pharmaceutical
companies from paying generic drugmakers to delay the launch of
generic rivals, known as "pay for delay" deals.
"This was in Obama's proposal in 2011, so this is not new,"
said Mark Schoenebaum, an analyst at ISI Group. "What is new is
that the savings have increased from $3 billion to $11 billion,
so still relatively small."