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Indian Health Service The Federal Health Program for American Indians and Alaska Natives

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President Signs FY 2004 Budget: 2.5% Increase for IHS

The final budget authority for the Indian Health Service (IHS), an agency in the Department of Health and Human Services (HHS), for fiscal year (FY) 2004 is $2.9 billion. This is a $72 million, or approximately 2.5%, increase over the FY 2003 enacted budget level. Adding in funds from health insurance collections estimated at $593 million, designated diabetes appropriations of $150 million, and $6 million for staff quarters rental collections, increases the proposed budget for the IHS to $3.7 billion in program level spending. This increase reflects the impact of the Department’s tribal budget consultations and a continuing Federal Government commitment to provide for the health of members of federally recognized tribes.

Pay costs: The budget includes an additional $23 million toward covering increased Federal employee pay costs and to allow tribally run health programs to provide comparable pay raises to their staffs.

Staffing of New Facilities: An additional $25 million is included to complete staffing for two new hospitals (the Fort Defiance Hospital serving the Navajo Nation in Arizona and the Winnebago Hospital serving the Winnebago and Omaha Tribes in Nebraska) and the Pawnee Health Center in Oklahoma. When these facilities are fully operational, they will increase the number of visits to health professionals that can be accommodated annually by 26%, and make new medical services available at these sites.

A total of $95 million has been allocated in the FY 2004 budget for health facility construction projects, an increase of $13million, or 16%. This includes funding for health centers in Pi?on, AZ; Red Mesa, AZ; Metlakata, AK; Sisseton, SD; St. Paul, AK; and Eagle Butte, SD. Various dental units across the nation will also be constructed. Funding of $3.6 million is also included for a Youth Residential Treatment Center in Nevada, to help address the high rates of drug abuse and related mental health issues in Indian youth.

The 2002 National Household Survey on Drug Use and Health, conducted by the Substance Abuse and Mental Health Services Administration, found that the rate of current illicit drug use among Indian youth aged 12 to 17 was approximately 21%, nearly twice the rate of all American youths. And reservation-based youth have reported rates of drug and alcohol use as high as 50-60 percent.

Increases in the IHS FY 2004 budget authority totaling $72 million are seen in the following areas:

Dental Health
Dental health programs will see an increase of $4.9 million, or 5%, to help cover increased pay costs and provide funding for an innovative Dental Volunteer Program. Funding for this program is used to offset the costs of travel and lodging expenses incurred by dentists who volunteer to provide services at IHS/tribal/urban Indian dental health programs.

Contract Health Services
The budget includes an additional $4 million for contract health service (CHS) costs. The IHS uses CHS funds to supplement the care provided in its own facilities by purchasing medical care from hospitals and health providers. These CHS funds pay for specialty care, including most types of surgery, and are used to purchase all medical care for Tribes that do not have an IHS facility nearby.

Preventive Health Services
An increase of $4.3 million for preventive health services is included in the budget. This means a 4% increase in funding for public health nursing, health education, community health representatives, and immunization programs.

An increase of $7 million in Medicare/Medicaid collections is expected in FY 2004. Third-party insurance collections, an important part of the IHS overall budget, are expected to contribute an additional 20% to IHS FY 2004 budget authority funds, and will account for over 16% of total IHS program level funds.

The budget includes $150 million for diabetes prevention/treatment grants, an increase of $50 million over FY 2003 levels. The IHS awards grants to 318 Tribes and Indian organizations. Grantees will use these additional funds to improve their diabetes wellness/physical activity centers, provide diabetes self-management training, and purchase newer medications that are more effective in preventing type 2 diabetes. Diabetes rates are significantly higher among American Indians and Alaska Natives than in the general population, as is the incidence of diabetes related complications.

FY 2004 Proposed Budget Overview for the Indian Health Service (Dollars in thousands)

Type FY 2003 (Enacted) FY 2004 (Omni. Conf. Mark)* Change over FY 2003
Clinical Health Services
Hospitals & Health Clinics $1,211,988 $1,249,781 $37,793
Dental Health $99,633 $104,513 $4,880
Mental Health $50,297 $53,294 $2,997
Alcohol & Substance Abuse $136,849 $138,250 $1,401
Contract Health Services $475,022 $479,070 $4,047
Total, Clinical $1,973,789 $2,024,908 $51,119
Preventive Health Services
Public Health Nursing $39,616 $42,581 $2,965
Health Education $10,991 $11,793 $802
Community Health Reps. $50,444 $50,996 $552
Immunization AK $1,546 $1,561 $15
Total, Preventive $102,597 $106,931 $4,334
Other Services
Urban Health $31,323 $31,619 $296
Health Professions $31,114 $30,774 ($340)
Tribal Management $2,390 $2,376 ($14)
Direct Operations $60,176 $60,714 $538
Self-Governance $5,553 $5,644 $91
Contract Support Costs $268,974 $267,398 ($1,576)
Total, Health Services $2,475,916 $2,530,364 $54,448
Indian Health Facilities
Maintenance & Improvement $49,507 $48,897 ($610)
Sanitation Facilities $93,217 $93,015 ($202)
Health Care Facilities Construction $81,585 $94,554 $12,969
Facilities & Environmental Health Support $132,254 $137,803 $5,549
Medical Equipment $17,182 $17,081 ($101)
Total, Facilities $373,745 $391,350 $17,605
TOTAL PROPOSED BUDGET AUTHORITY $2,849,661 $2,921,714 $72,053
Insurance (Medicare/Medicaid/Private) $585,797 $592,762(est) $6,965(est)
Staff Housing $5,900 $5,900 $0
Allocations from Other Sources
Special Diabetes Program for Indians $100,000 $150,000 $50,000
TOTAL PROGRAM LEVEL $3,541,358 $3,670,376 $129,018
*includes rescission of 0.646% plus additional rescission of 0.59%