What Obama's 2016 budget will mean for healthcare providers

President Barack Obama's 2016 budget, which was formally released Monday, details a number of proposals with implications for healthcare providers--chief among them recently announced initiatives to pursue precision medicine and combat antibiotic-resistant bacteria, but also proposed cuts to Medicare payments.

Although the budget restores funding to cuts made as the result of the sequester, FierceHealthFinance reports that the Federation of American Hospitals objects to the Medicare payment cuts and urged the U.S. House and Senate Budget Committees to reject them.

But during a Monday press conference, officials touted the healthcare initiatives contained in the president's wish list. 

As Obama described in a White House event Friday, the administration will launch a $215 million Precision Medicine Initiative "that brings America closer to curing diseases like cancer and diabetes and gives all of us access, potentially, to the personalized information that we need to keep ourselves and our families healthier." The president first introduced the initiative during his State of the Union address.

The budget states that the administration will: "begin the establishment of a voluntary national research group of a million or more Americans; expand research to define cancer subtypes and identify new therapeutic targets; modernize the regulatory framework for DNA-sequence-based diagnostic tests; and enhance interfaces for electronic health records and patient-generated data in assessment of individual health and population-level trends."

"That will be a big part of the investment, the infrastructure to support that information analysis," Jo Handelsman, associate director for science at the White House Office of Science and Technology Policy, said during a press conference Monday about the research and development aspects of Obama's budget proposal.

She said the main individual characteristics the initiative plans to take into account include a patient's genome, microbiome, diet and environment.

In keeping with the initiative's intent to gather information from existing genomic databases as well as add other patient data, Handelsman added that the National Institutes of Health is "actively in conversations with" the Veterans Affairs department to gain access to its genetic database formed by the Million Veteran Program.

"There's an enormous amount of data there that will boost the Precision Medicine Initiative," Handelsman said.

The president's lofty healthcare-related goals, however, will need bipartisan support in order to advance, Elizabeth Carpenter, director at healthcare consulting company Avalere, said in a statement about the budget.

"While the president's budget commits to research and development, it also acknowledges the current debate over the cost of medication," she said. "While many of the proposals included in the budget will not gain traction under the new Republican majority, the budget demonstrates that further debate on the cost of healthcare innovation is likely to come."

In the access-to-care realm, Obama's budget requests funding for the following initiatives:

  • $4.2 billion in 2016 for federally run Health Centers--which serve populations with limited access to healthcare--to support services for an estimated 28.6 million patients
  • $810 million in 2016 and $2.1 billion from 2017-2020 to the National Health Services Corps to place and maintain 15,000 healthcare providers in underserved areas
  • $5.25 billion over 10 years to support 13,000 new medical school graduate residents through an education program that provides incentives for high-quality physician training

The budget proposal also details the administration's $1.2 billion plan to combat antibiotic-resistant bacteria, highlighting its goal to cut the Clostridium difficile infections in half and reduce Carbapenem-resistant Enterobacteriaceae infections by 60 percent by 2020. The initiative follows Obama's executive order last fall that "indicated the need and priorities for antibiotic-resistance research and development," Handelsman said.

The budget also includes a provision that would allow the federal government to negotiate prices for costly drugs covered under the Medicare Part D program.

To learn more:
- check out the budget proposal (.pdf)
- here is the announcement on the funds to combat antibiotic-resistant bacteria 
- watch a video of Obama's precision medicine speech
- here's the Avalere statement