FY 2005 Budget in Brief

Indian Health Service

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Indian Health Service
Agency Description
Access to Health Care
Preventive Health Improvements
Supporting Indian Self-Determination

The IHS FY 2005 budget request is $3.7 billion, a net increase of $45 million over FY 2004.  Additional funds are requested primarily for the provision of safe water and sewage disposal for Indian communities and to purchase additional health care from non–IHS hospitals and health providers.  The IHS anticipates receiving $593 million in health insurance reimbursements in FY 2005, primarily from Medicare and Medicaid.

Agency Description

The IHS is the primary source of medical care for the 1.6 million American Indians and Alaska Natives who are members of more than 560 Federally recognized tribes.  Care is provided through a network of 49 hospitals and over 500 outpatient clinics and smaller facilities located primarily in the Southwest, Oklahoma,  the Northern Plains and  Alaska.  Tribes currently operate 15 of the hospitals and three–quarters of the clinics and smaller facilities under self–determination contracts with the Agency.  The IHS also purchases medical care for Indian people from non–IHS hospitals and health providers and funds 34 urban Indian health organizations.  In addition to providing medical treatment, IHS carries out substantial prevention and wellness activities including diabetes prevention and disease management, sanitation construction to provide water and waste disposal for Indian communities, injury prevention, mental health services, and alcohol/substance abuse treatment and prevention.

Access to Health Care

The population IHS serves increases annually at approximately 2 percent.  Like any health care provider, IHS also experiences increases in the cost of providing care.
Contract Health Services: The budget includes $497 million, an increase of $18 million over FY 2004, to purchase health care from non–IHS hospitals and health providers.  This funding increase, combined with the additional purchasing power provided in the recently enacted Medicare Prescription Drug, Improvement, and Modernization Act, will allow the purchase of an estimated 35,000 additional outpatient visits or 3,000 additional days of inpatient care.  Section 506 requires hospitals that participate in Medicare to provide inpatient treatment services to IHS at rates determined by the Secretary.  Contract Health Service funds purchase 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.

Opening New Health Facilities: An additional $23 million is included to add staff at five outpatient facilities scheduled to open during FY 2005.  Tribes financed construction of three of these facilities saving IHS $37 million in construction costs.  When fully operational, these facilities will double the number of primary care provider visits that can be provided at these sites and also provide new services.

Health Facility Construction: The budget includes $42 million to complete construction of two outpatient facilities, serving the Navajo Nation at Red Mesa, Arizona and the Sisseton–Wahpeton Sioux Tribe at Sisseton, South Dakota, and provide necessary staff housing for the health facilities at Zuni, New Mexico and Wagner, South Dakota.  When completed, the outpatient facilities will provide an additional 36,000  primary care provider visits, replace the Sisseton hospital, which was built in 1936, and bring 24 hour emergency care to the Red Mesa area for the first time.  IHS will add thirteen units of staff quarters and replace 16 house trailers built during the 1950s and 1960s and excessed to Zuni.  Having decent local housing available will make it easier to recruit and retain health professionals at these sites.

Urban Indian Health Program: In addition to providing health care to Indian people on or near reservations, IHS also provides over $30 million annually to thirty–four urban Indian health organizations providing services in cities with large numbers of Indian people.  These organizations provide primary medical services, basic preventive health services, outreach and referral services and alcohol and drug treatment.  IHS funds account for about half of all funds available to these organizations, major non–IHS funders are Medicaid, other Federal programs, and State and local governments.  A Program Assessment Rating Tool (PART) review of the Urban Program found it has demonstrated progress on its long–term goals as well as improved efficiencies and cost effectiveness.

Pay Costs: The budget includes an additional $36 million to cover increased pay costs for Federal and Tribal employees who operate health facilities, and carry out prevention and wellness programs.

Health Insurance Reimbursements: IHS facilities receive Medicare and Medicaid under a cost–based methodology developed in close cooperation with the Centers for Medicare & Medicaid Services.  IHS expects to receive a total of $593 million from health insurance in FY 2005, primarily from Medicare and Medicaid, but including nearly $50 million in third party employer provided health insurance.

Preventive Health Improvements

IHS has long recognized that preventing disease and promoting wellness are often the most cost effective ways to raise the health status of Indian people to the highest level.  Substantial funds are devoted to these activities in order to reduce the need for expensive medical treatment.  The budget request continues these investments in the areas of diabetes, additional sanitation construction and several smaller activities.

Diabetes: Through the Special Diabetes Program for Indians grant program, IHS provides funds to over 300 tribes and Indian organizations.  In FY 2005, IHS will award $150 million.  Over the past four years, $500 million has been provided to support diabetes prevention and disease management activities at the local level.  The program has substantially increased the availability of services including basic clinical exams, newer treatment medications and therapies, laboratory tests to assess diabetes control and complications, screening for diabetes and pre–diabetes in a variety of locations, nutrition education, and physical fitness activities.  These services have led to a steady increase in the percent of diabetic patients with Ideal blood sugar control.  Starting in FY 2004, the program will include a new competitive grant activity to identify successful examples of preventing the onset of type II diabetes or of cardiovascular disease among diabetics.

Sanitation Construction: The budget includes $103 million for sanitation construction – an increase of 11 percent or $10 million over FY 2004 – to provide safe water and waste disposal systems to an estimated 22,000 homes.  The sanitation program has played a key role in decreasing the rates of infant mortality, gastroenteritis, and other environmentally related diseases over the last thirty years.  A recent review of the program found that it demonstrated increased long–term cost efficiencies and that it was optimally designed.

Additional Preventive Health Investments: The budget requests $7 million for three specific investments which will strengthen the ability of IHS to prevent disease and promote wellness.  An additional $2 million is requested to expand  the Director's Health Promotion and Disease Prevention Initiative.  Effective low cost health interventions can be designed and implemented by people with knowledge of their local communities.  Funds will support implementation of 50 local community interventions, best practice dissemination, and training for community members. The request also adds $3 million for epidemiol-ogy centers.  The seven existing epidemiology centers  provide information for about  half of the population IHS serves, but do not cover the Navajo, Oklahoma, Billings, or California areas.  Additional funds will add three or four new centers and increase support for the seven existing centers.

Some 50,000 Alaska Natives live in communities with no access to IHS hospitals or outpatient facilities except by air travel.   Community Health Aides/Practitioners (CHA/Ps) are the only local source of health care in many of these communities and are critical to reducing the high transportation costs of bringing people to treatment.  An additional $2 million will add 30 CHA/Ps for a total of 516.

Information Technology: The budget includes $69 million for information technology, an increase of $4.5 million compared to FY 2004.  A PART review of IHS's major information system – the Resource and Patient Management System (RPMS) – found that RPMS compared favorably with similar Federal information systems and consistently scores well on information system reviews.

Supporting Indian Self-Determination

Tribes continue to increase the number of IHS programs they operate, both in dollar terms and as a percentage of the Agency's budget.  In FY 2005, Tribes will control an estimated $1.8 billion, or 56 percent of IHS's total budget request.
To bring Indian issues to the attention of all parts of the Department, the Secretary has reactivated the Intradepartmental Council on Native American Affairs.  To better understand the conditions in Indian country, the Secretary or Deputy Secretary has visited Tribal Leaders and Indian reservations in all twelve IHS areas, accompanied by senior HHS staff.

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