George W's next term through the budget crystal ball.

One complaint often heard around this time every four years is that the public lacks good information about what each presidential candidate plans to do if he wins the election. The television ads talk about "leadership," "experience," and "American values," but don't provide specifics about policies that interest us. This year, most of the mass media are focusing on foreign policy and terrorism, but we'd like to know more about how having Kerry or Bush in the White House will affect healthcare in general and, especially, long-term care.

With George W. Bush, we have the benefit of an extremely accurate crystal ball about his future priorities in the form of the Fiscal Year (FY) 2005 appropriations for the Departments of Labor, Health and Human Services, and Education, and related agencies. The federal fiscal year begins on October 1, 2004, but as late as mid-August, legislation dictating spending for these agencies had only completed the process of passing through the Committee on Appropriations of the House of Representatives. In the health field, the disciplined Republican majority on the committee passed the White House requests with only a few hours of discussion and a handful of minor changes. In fact, the Committee shaved a paltry $20 million from the administration's request for $371 billion for the Department of Health and Human Services (HHS).

The spending plan that emerged from the House Appropriations Committee is believed to be the most accurate measure of what the White House really wants to do. Some items in the President's official budget request--such as a new $10 million Samaritan Initiative to provide comprehensive care to end homelessness--appear to have been introduced primarily to allow agency officials to talk about what President Bush would like to do for specific populations. The House subcommittee on health quickly eliminated the Samaritan Initiative, suggesting that the initiative was not a priority for the administration. Through this mechanism, HHS officials can claim that attempts to spend more on human services were "thwarted" by Congress, even though many Washington observers believe that the Republican congressmen made their changes with the approval of the White House.

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No such game-playing was involved in the FY 2005 request for federal Medicaid spending. The White House requested a 9% cut in next year's grants to states for Medicaid: from $130.9 billion to $119.1 billion. The reduction was passed intact by the House Committee on Appropriations. In effect, President Bush and the House Republican majority have proposed that each state cut spending on Medicaid by an average of more than $300 million next year, including both federal and state funds.

An even larger cut is proposed for Centers for Medicare & Medicaid Services (CMS) spending for the uninsured who are not eligible for either Medicaid or Medicare. Last year, CMS spent $365 million on the uninsured; the administration proposed and the Appropriations Committee passed a request for $286 million. No one has explained the rationale for this 21% cut in public sector reimbursement for patients who have no insurance--unless, perhaps, there is a hope that the improving economy will slash the growing ranks of the uninsured in record time.

An additional unexplained reduction has been made in the budget for Medicare research, demonstrations, and evaluation. This year, CMS received $77.8 million to fund Medicare-related research; next year, the House Appropriations Committee wants CMS to "make do" with $68.4 million. Surprisingly, this was one of the few areas where the Republican majority "tampered" with the White House health budget request, by adding $126,000 to the administration's request.

Indeed, the FY 2005 budget is not entirely about cuts. Some CMS expenditures have been increased by the House Appropriations Committee's passage of the Bush administration request. LTC providers will be interested to learn that state surveys and certification for Medicare are slated to receive a $19 million increase, while federal administration of Medicare and Medicaid is targeted for a modest 3% increase. CMS received a nearly 25% increase in spending on children's vaccines, from $980 million to $1.2 billion. Legal determination of eligibility for the prescription drug discount plans is a new item for CMS, for which the administration and the Appropriations Committee has earmarked at $106 million. None of these items, however, pays directly for provision of long-term care.

The proposed appropriations for another source of direct services for the elderly population, the Administration on Aging, also received a slight increase, from $1.38 billion to $1.4 billion. More than 92% of these funds take the form of grants to the states for family caregiver support, preventive health, and nutrition. The Appropriations Committee even increased spending on aging program innovations from $33 million to $38 million, while doubling the budget for the White House Conference on Aging. To symbolically offset some of these increases, the Committee sliced $885,000 from last year's budget for protection of vulnerable older Americans from elder abuse and pared $383,000 from Administration on Aging demonstrations for treatment of Alzheimer's.

As noted in earlier columns, the Bush administration's primary spending priority for health-related increases has been to support research by the National Institutes of Health (NIH). This is again true for FY 2005. The Appropriations Committee dutifully passed a $726 million increase in the NIH budget, meeting all of the White House requests for each of the Institutes. The National Institute on Aging received a $31 million increase, while the much smaller budget of the National Institute of Nursing Research received a $4.5 million increase. The big winners, however, remain the National Cancer Institute and the National Institute of Allergy and Infectious Diseases, which together account for nearly one-third of the total NIH budget.

The road map offered by the spending decisions of the House Appropriations Committee for the new fiscal year clearly defines President Bush's health priorities relative to aging and long-term care. Most direct patient care services funded by the federal government will be cut, while service grants to the states from the Administration on Aging will remain intact. These choices tend to benefit family caregivers and home- and community-based services over institutional caregivers, leaving healthcare providers having to make hard decisions about uncompensated care for the uninsured. Spending on medical research and on federal administration of Medicare and Medicaid will continue to grow, although at a slower pace than during the previous four years.

In sum, where President Clinton once said, "I feel your pain," President Bush is saying to healthcare providers, "You will share the pain" from this country's federal budget deficit.

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