News Release

HHS Budget Puts Reform First

Budget Helps Control the Skyrocketing Cost of Health Care, Cuts Waste & Fraud from Medicare and Protects Public Health

Citing the rapidly escalating cost of health care in this country and the enormous pressures that health care costs are putting on our economic future, Health and Human Services Secretary Kathleen Sebelius today highlighted key reforms in President Obama’s 2010 HHS budget.

“This budget sends a clear message that we can’t afford to wait any longer if we want to get health care costs under control and improve our  fiscal outlook,” said Secretary Sebelius. “Investing in health reform today will help bring down costs tomorrow and ensure all Americans have access to the quality care they need and deserve.”

The 2010 budget establishes a health care reserve fund of $635 billion over 10 years to finance health reform that brings down costs, improves quality, and assures coverage for all Americans.  The reserve is funded by new revenue and by savings from Medicare and Medicaid.   

In addition to improving efficiencies and bringing down costs in Medicare and Medicaid through health reform, Sebelius also highlighted increased funding for a Medicare Integrity Program that will help fight fraud and abuse and crack down on anyone who tries to cheat the system.

“We estimate that for every $1 we spend to stop fraud in the system, we save $1.55,” said Sebelius  “The President’s budget lays out funding for anti-fraud efforts over five years that we estimate could save $2.7 billion by improving overall oversight and stopping fraud and abuse within the Medicare Advantage and Medicare prescription drug programs.”

Quality and access to care are also critical elements of the President’s reform plan. The President’s 2010 budget increases access and improves the quality of care for rural Americans and includes a historic commitment to health care for Native Americans. The budget also calls for over $1 billion in funding to increase the number of nurses, doctors, and health care workers in this country, especially in areas that are traditionally underserved, and includes funding to help eliminate health disparities.

As the country and world face an outbreak of a novel H1N1 virus, and leaders from every level of government,  the private sector and both sides of the aisle have come together to respond, Sebelius also highlighted important provisions in the President’s budget that will protect public health. The budget sets aside $584 million to help prepare for and combat pandemic flu and increases funding for the Food and Drug Administration (FDA) to help ensure the safety of our food and medicine.

“Whether it’s responding to the H1N1 flu virus or the recent recall of peanuts, our department is responsible for keeping Americans healthy and safe, and we take that responsibility seriously,” added Sebelius. “President Obama’s budget will help ensure we remain prepared to protect the American people. The investments we made in pandemic planning and preparation allowed us to respond quickly and efficiently to the H1N1 virus in this country and helped get Americans the information and resources they needed early on during the outbreak. New investments in this budget and in the funds that the President has requested in the supplemental will allow us to continue to respond to this new virus, replenish our stockpile of antivirals and start work on a potential vaccine for the fall flu season.”

Overall, President Obama’s proposed budget includes a total of $879 billion for the Department of Health and Human Services in Fiscal Year 2010, an estimated $63 billion increase over Fiscal Year 2009.  Highlights from the budget are included below:

Controlling Costs Through Health Care Reform

Strengthening Medicare Sustainability:  Containing Medicare cost growth is not only essential to preserving the Medicare Trust Funds, but it also is a fundamental component of the President’s vision for health reform. Our ability to bring down the crushing costs of health care and improve the nation’s overall fiscal outlook is directly related to our ability to control health care costs. The Administration is committed to strengthening Medicare’s long-term sustainability. The FY 2010 budget bolsters the Medicare program by aligning incentives toward quality, promoting efficiency and accountability, and encouraging shared responsibility.  

Enhancing Medicare and Medicaid Integrity:  Reducing fraud, waste and abuse in government spending is a top priority for the Administration. The FY 2010 budget invests $311 million in discretionary resources to strengthen program integrity activities within the Medicare and Medicaid programs, with particular emphasis on greater oversight of Medicare Advantage and the Medicare Prescription Drug program.  This investment represents the first year of a multi-year strategy which the budget estimates will bring $2.7 billion in savings.

These funds will augment existing mandatory resources for combating health care fraud and abuse. Moreover, the additional funding will better equip the federal government to minimize inappropriate payments, pinpoint potential weaknesses in program integrity oversight, target emerging fraud schemes by provider and type of service, and establish safeguards to correct programmatic vulnerabilities.

Improving Quality of and Access to Health Care

Strengthening the Health Professions Workforce:  The FY 2010 budget includes over $1 billion to support a wide range of programs to strengthen and support our nation’s health care workforce.  These investments will expand loan repayment and scholarship programs for physicians, nurses and dentists who are committed to practicing in medically underserved areas.  Additionally, this funding will enhance the capacity of nursing schools, increase access to oral health care through dental workforce development grants, target minority and low income students, and place an increased emphasis on ensuring that America’s senior population gets the care and treatment it needs.  Within this total, the budget includes $330 million, an increase of $136 million for programs that are part of the President’s initiative to address the shortage of health care providers in underserved areas.  Programs included as a part of the President’s initiative are the National Health Service Corps, the Nurse Loan Repayment and Scholarship Program, State Oral Health Workforce Program, and the Nurse Faculty Loan Program.

Improving Access to and Quality of Rural Health: The President shares HHS’ belief in increasing access to health care and improving the quality of health care in rural areas. The FY 2010 budget includes $73 million for a new “Improve Rural Health Care” initiative.  The initiative includes funding that addresses Rural Health Care Services Outreach, Network, and Quality Improvement grants ($55 million); services provided by State Offices of Rural Health ($9 million), and Telehealth grants for use in Telecommunications technologies ($8 million).

Improving Health Outcomes of American Indian and Alaska Natives:  The FY 2010 budget includes over $4 billion for the Indian Health Service (IHS), an increase of $454 million. This represents a significant investment and will support and expand the provision of health care for American Indians and Alaska Natives.  The increase will focus on reducing health disparities, supporting Tribal efforts to administer programs at the local level, and ensuring that where necessary, IHS services can be supplemented with care purchased from outside the Indian health system.  The budget affirms the President’s commitment to improve health outcomes for American Indian and Alaska Native communities, and reflects a balance with funds provided for construction, equipment, and infrastructure in the Recovery Act.

Reducing Health Disparities:  The FY 2010 budget includes $354 million for combating health disparities to improve the health of racial and ethnic minorities and low-income and disadvantaged populations.  These funds include $143 million for the Minority AIDS Initiative under the Ryan White Act, $116 million for Health Professions and Nursing Training Diversity Programs, $56 million for the Office of Minority Health, and $40 million for the CDC REACH program.

Securing and Promoting Public Health

Protecting Against Pandemic Influenza: The nation and the world are confronting and responding to a new strain of H1N1 influenza A virus, (2009 – H1N1 flu) that is transmissible among humans and is spreading rapidly with thousands of cases around the world.   On April 28, 2009, the President announced a supplemental request of $1.5 billion for the federal response to this outbreak.  These funds, in addition to the FY 2010 budget request of $584 million and the remaining balances of pandemic flu preparedness funds, will allow HHS to develop, produce, and distribute antivirals, vaccines, personal protective equipment, and other medical counter‑measures, as well as conduct public health surveillance and response efforts in the face of the current outbreak. 

Advancing Food Safety:   The President’s budget includes an additional $511 million for FDA, the largest increase ever requested, with $259 million devoted to food safety efforts.  This funding level would increase and improve inspections, domestic surveillance, laboratory capacity, and domestic response to prevent and control food borne illness.  FDA will increase the number of food inspectors by approximately 20 percent in FY 2010.

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Last revised: May 07, 2009