With the U.S. economy struggling, the budget deficit expanding, and his health reform effort facing an uphill battle, President Obama released his proposed $3.8 trillion budget for fiscal year 2011 (FY 2011), which will start October 1, 2010. Despite a spending freeze on all discretionary funds, except those dedicated to defense or national security, medical care and research remain clear priorities for the Obama administration. Nearly every health-related research agency—except the Centers for Disease Control and Prevention (CDC)—received an increase in the president’s budget.
Each February, the president submits a budget to Congress proposing funding for federal departments and agencies, including justifications for spending reductions or increases. The House and Senate Budget Committees then draft budget resolutions, nonbinding legislation that sets overall discretionary spending and divides spending totals into categories. The budget is organized into “functions” of related spending categories. For instance, function 550 includes all health programs, such as the National Institutes of Health (NIH) and the Agency for Healthcare Research and Quality (AHRQ).
The budget regulates two types of spending: mandatory spending for “entitlement” programs that the law requires the federal government fund annually, such as Medicare and Medicaid, and “discretionary” spending, such as CDC and AHRQ. Each year, Congress must decide whether to appropriate funds for discretionary programs. Following development of the congressional budget, House and Senate Appropriations Committees allocate discretionary funding to programs and agencies within function areas. With the exception of the Medicare End-Stage Renal Disease (ESRD) Program, the majority of agencies and programs of interest to the nephrology community rely on discretionary funding.
Proposed budget includes robust funding for medical research
Requesting a $1 billion increase in discretionary NIH funding for FY 2011—a 3.2 percent increase from FY 2010 levels—President Obama clearly prioritizes scientific research in this year’s budget (Table 1). Of the total $32.2 billion requested for NIH for FY 2011, approximately $1.96 billion is targeted toward the National Institute of Diabetes and Digestive and Kidney Diseases (NIDDK), a 2.6 percent jump from FY 2010. Similarly, the budget includes a 2.9 percent increase over last year for both the National Heart, Blood, and Lung Institute (NHLBI) and the National Institute on Aging (NIA), nearly $3.1 billion and just over $1.1 billion, respectively.
NIH Director Francis Collins, MD, recently outlined five “exceptional opportunities” for the agency to pursue that could reap substantial downstream benefits. In developing the budget, NIH mapped the portfolio of each institute or center against these five themes and then adjusted to reflect other area- or institute-specific contingencies:
Applying high-throughput technologies to understand fundamental biology and to uncover the causes of specific diseases.
Translating basic science discoveries into new and better treatments.
Putting science to work for the benefit of health reform.
Encouraging a greater focus on global health.
Reinvigorating and empowering the biomedical research community.
Collins also emphasized medical research as a sound investment in the economy. NIH data show that each dollar of NIH funding creates more than two dollars in state economic output per year, and each grant generates approximately seven jobs.
Although pleased with the proposed increase, the Ad Hoc Group for Medical Research, on whose executive committee ASN serves, had recommended that NIH receive a $35 billion budget in FY 2011. This figure reflects the FY 2010 budget adjusted for medical inflation, plus half the value of funds that were awarded as part of the American Recovery and Reinvestment Act (ARRA, better known as the economic stimulus package), to ensure continuation of ongoing research.
Last year, Congress appropriated the Department of Veterans Affairs (VA) approximately $47.5 billion in discretionary funding for medical care and an additional $581 million for health research. For FY 2011, the Obama administration proposes a nearly 8.5 percent boost in medical care spending totaling over $51.5 billion.
VA health research also stands to gain—if somewhat more modestly—at 1.5 percent over FY 2010 levels, or just shy of $600 million. ASN serves on the executive committee of the Friends of the Veterans Affairs Medical Care and Health Research (FOVA), which has recommended a $700 million research budget to support returning veterans from Iraq and Afghanistan and to bring VA research facilities into the 21st century.
Comparative effectiveness research gets likely boost
With a proposed budget increase of 54.4 percent above FY 2010 funding, AHRQ receives the largest budget boost of any health-related agency in the president’s budget. The $611 million outlined in the request is nearly $214 million more than AHRQ saw last year. Given the administration’s focus on health reform, AHRQ—which supports research to improve health care quality, reduce costs, and broaden access to essential services—is a high funding priority.
If the president’s proposal is enacted, a substantial portion—approximately $272.5 million—of the total $611 million AHRQ budget will likely be targeted to expand comparative effectiveness research. Other priority areas of research within AHRQ slated to see funding gains include hospital-acquired infections (HAIs)—$34 million—and health information technology (HIT). ASN serves on the executive committee of Friends of AHRQ, a coalition of more than 200 health-related organizations dedicated to supporting the agency, and strongly endorses the president’s request for the agency.
Also poised for significant budget growth in 2011 is the Food and Drug Administration (FDA), receiving a nearly 23 percent budget increase in the president’s proposal. This funding would elevate the FDA’s budget to just over $4 billion in 2011, up nearly $1 billion from 2010. Although the administration has identified increasing food safety as the major priority for the FDA in 2011, the proposed budget also includes $25 million dedicated to modernizing regulatory science.
The proposed $25 million for regulatory science dovetails a recently announced initiative between NIH and FDA to accelerate the process from scientific breakthrough to the availability of new, innovative medical therapies for patients—including new RO1 grant funding for regulatory science investigators.
Like most programs and agencies related to medical research, the National Science Foundation (NSF) received a proposed increase in the president’s budget. Specifically, NSF would receive an 8 percent boost to nearly $7.5 billion in 2011. The budget calls for doubling funding for multidisciplinary research on next-generation information and biological technologies intended to fuel job and industry creation. The president also highlights a 14 percent increase in funding for a new consolidated program aimed at building the science and technology workforce by recruiting and retaining undergraduate students from underrepresented groups.
The CDC is the only health-related agency slated for a decrease in funding under the Obama administration’s budget request. Unobligated balances from the FY 2009 pandemic influenza supplemental enabled CDC to request fewer resources, and this decrease is reflected in the $133 million reduction from FY 2010 levels.
Amid a challenging economic climate and a declared freeze on most discretionary spending, medical research has nonetheless triumphed in President Obama’s proposed budget for FY 2011. “The administration clearly recognizes the potential of research funding to enhance patient care, improve quality of life, reduce health care costs, and strengthen the U.S. economy,” said ASN Public Policy Board Chair Thomas Hostetter, MD.
The beneficial impact of increased NIH funding is evident nationwide. For example, Oregon Health & Science University (OHSU) received approximately $58 million in ARRA awards from NIH as of December 2009. These funds fueled 112 projects spanning a wide spectrum, from studies to improve how we identify cancer-causing changes in genes to research aimed at restoring limb movement in stroke victims to projects on improving how providers use health information technology tools to reduce medical errors and costs.
Moreover, OHSU estimated nearly 300 full- and part-time jobs added or retained as a result of increased funding from NIH through ARRA. “Our own analysis, as well as that of the National Institutes of Health, has demonstrated that biomedical research is a powerful stimulant for the local economy,” said OHSU President Joe Robertson, MBA, MD. “Few investments directly benefit so many citizens while at the same time creating sustainable, highly skilled jobs and economic activity.”
ASN will continue to press lawmakers to support the president’s research focus as the budget and appropriations processes move forward. The society’s advocacy activities include having the ASN Council, Board of Advisors, and Public Policy Board visit Capitol Hill last month, in honor of World Kidney Day, for a series of meetings with members of Congress, their staff, and other key policymakers.
