Obama Administration Releases $4 Trillion Budget Proposal for FY 2016

President Barack Obama released his fiscal year (FY) 2016 Budget Proposal on Monday, February 2, and presented it to Congress.  Overall, the President’s Budget totals $4 trillion and emphasizes bringing middle-class economics into the 21st Century.  The Budget will also make investments and end the harmful spending cuts known as sequestration, put our Nation on a more sustainable fiscal path by achieving $1.8 trillion in deficit reduction, primarily from reforms in health programs, our tax code, and immigration.

In terms of healthcare, the Department of Health and Human Services (HHS) budget totals over $1.09 trillion in outlays and proposes $83.8 billion in discretionary budget authority, an increase of $4.8 billion from FY 2015.  The budget also highlights the tangible progress HHS has made in helping to lower costs and improve quality and safety across the health care system as growth rates for total health care expenditures and Medicare are historically low. The President’s Budget also discusses how, in part due to the Affordable Care Act, substantial reductions to readmissions and harm to patients have also been realized.

The President’s Request includes $92 million for the Office of the National Coordinator for Health Information Technology (ONC), which is $32 million above FY 2015 funding levels. The Budget reflects the need for continued progress towards greater optimization of health information technology (IT) to further care transformation and increase interoperability through policies, standards, and programs that will assist both providers and consumers. It will foster greater collaboration in support of health IT across the government by building federal and national consensus around implementing the Federal Health IT Strategic Plan.

In FY 2016, ONC’s investments will reflect a greater focus on interoperability through standards development, certification, and governance structures to support the requirements of Meaningful Use Stage 3. Meaningful Use Stage 3 seeks to support data exchange in a safe and secure manner utilizing standards that support interoperability and patient engagement for an enhanced care delivery system and patient experience.

The request for ONC also includes an investment to support the creation of a Health IT Safety Center where ONC will continue the analysis of health IT related adverse events tracking benchmarks to inform the development of interventions and usability of standards for widespread implementation. The Budget calls for the Health IT Safety Center to become operational in FY 2017.

In addition, the Budget Request includes $970.8 billion for the Centers for Medicare & Medicaid Services (CMS) in mandatory and discretionary outlays, a net increase of $74 billion above the FY 2015 level.   For Medicare, the Budget includes net projected Medicare savings of $423 billion over 10 years. Most notably, the Budget invests $44 billion above the President’s Budget adjusted baseline to reform the Medicare physician payment system to accelerate physician participation in high quality and efficient healthcare delivery systems. Other proposals improve payment efficiency across providers and increase the value of the care that is provided to Americans.