Three Ways the Proposed White House Budget Could Affect Public Health in States

Budgets are important windows into the priorities of an administration. While the White House budget for FY 2018 proposes some targeted infrastructure investments,[i] it also proposes to reduce funding for public health infrastructure and services. The budget proposed by the White House is expected to change in Congress; however, it is important for states to consider what the administration’s priorities could mean for public health. Three potential changes to state public health programs are below.

Potential Change 1: Cuts to funding for states’ public health programs. A number of recent articles and analyses have pointed out that the proposed Department of Health and Human Services (HHS) budget would slash funding for the Centers for Disease Control and Prevention (CDC) by over $1.2 billion compared to 2017. Roughly three-quarters of the CDC’s budget supports state and local programs to fight cardiovascular disease and diabetes, and maintain laboratory capacity to combat infectious diseases, among other activities. These state factsheets estimate the potential impact to states by program. States also rely on flexible funding from the CDC to support their work toward the goals of Healthy People 2020 and prevent chronic diseases and their risk factors.

Given that state public health funding has generally been flat since 2010, the proposed CDC cut would complicate states’ capacity to safeguard and promote the public’s health in the face of chronic and emerging health challenges.

Potential Change 2: New funding structures for public health in states. In counterpoint to funding cuts, the budget proposes $500 million to fund a new America’s Health Block Grant.” This grant would flow to states through the CDC, with the goal of increasing “state flexibility and focus on leading public health challenges” (HHS FY 2018 Budget, p. 6 & 30). The budget proposal specifically identifies improving nutrition for children and teens and improving physical activity as examples of interventions that states could tailor to meet the needs of their populations under the new block grant.

The budget also proposes a new Emergency Response Fund to address disasters and threats such as Ebola and Zika (HHS FY 2018 Budget, p. 100). It would grant the HHS secretary “Department-wide transfer authority” to finance the fund by shifting money—up to “one percent of any HHS account”—from elsewhere in HHS. While this is not a new authority for the HHS secretary, the details and potential impact on states of diverting other program dollars to support this fund remain to be seen.

Potential Change 3: New state requirements for some federal dollars: risk, competition, and pay-for-performance. The White House proposes to allocate some state public health funding on a pay-for-performance basis, require states to compete for available dollars, and emphasize risk in funding state public health programs.

  • For example, the budget proposes to “introduce competition, risk, and link awards to performance” in the CDC’s Pubic Health and Emergency Preparedness (PHEP) program. The PHEP cooperative agreement began in 1999 as a competitive grant primarily to combat bioterrorism, but in the aftermath of the September 11, 2001 attacks, Congress changed the program to award funds to all states according to a statutory funding formula. The 2013 reauthorization of the Pandemic and All-Hazards Preparedness Act reauthorized the PHEP as a comprehensive, all-hazards preparedness program, with additional funds possible for states with higher risk or unmet needs. The PHEP currently supports state and local health departments’ preparation for and response to threats including infectious diseases, bioterrorism, storms, and other disasters.
  • The proposed budget would also cut $27 million from the CDC’s Hospital Preparedness Program, changing it into a “competitive cooperative agreement program,” and would “hold awardees accountable for improving performance by withholding funds from awardees that fail to deliver results.” Since it began in 2002, the program has awarded grants according to a statutory formula to the same states receiving funding from the PHEP cooperative agreement. Accountability requirements are not new for the program, although developing performance metrics for the program has historically been challenging. The program supports state and local health department efforts to build hospitals’ capacity to cope with mass casualties and other emergencies. (See HHS FY 2018 Budget, p. 101-2).

These proposals to double down on competition and pay-for-performance come in the context of a proposed $136 million cut to the CDC’s public health and emergency preparedness programs (HHS Budget, P. 34).

Questions to Ask
State leaders may consider the following questions to prepare for potential changes such as those outlined in the budget:

  • If implementation decisions such as the performance measures used to judge states’ performance are decided through the federal rulemaking process, what support would your state public health department need to submit comments or otherwise participate?
  • How would new block grants or programs fill the proposed gaps in state public health funding left by proposed CDC cuts?
    • An analysis by Trust for America’s Health suggests that the $500 million for the new America’s Health Block grant is not enough to compensate for the cuts to existing prevention programs.
    • States will only be able to accurately determine in detail the cumulative impact of cuts and new funding once Congress passes a budget and a health care bill. Furthermore, some important details would likely be determined by the CDC and other federal agencies themselves, as they assess agency priorities in the aftermath of legislated cuts.
  • The budget asserts that the CDC cuts and changes will improve efficiency and increase flexibility. How would flexibility and efficiency compensate for possible cuts to current funding sources in your state?
  • How would your state use the flexibility of a block grant to address state public and population health priorities?
  • What support would your state need to make the most of a new block grant?

 

Support for this blog post was provided by the Robert Wood Johnson Foundation. The views expressed here do not necessarily reflect those of the Foundation.

[i]Infrastructure proposals include providing some traffic congestion grants to urban areas, privatizing air traffic control, and expanding a program that provides credit assistance to public and private entities financing transportation projects. https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/budget/fy2018/fact_sheets/2018%20Budget%20Fact%20Sheet_Infrastructure%20Initiative1.pdf, https://www.transportation.gov/buildamerica/programs-services/tifia/overview