Health IT winners and losers in Trump’s budget proposal: Cybersecurity gets a boost, ONC sees 37% cut

Donald Trump speaking
Trump's 2019 HHS budget proposal includes less money for ONC, but an $18 million for cybersecurity. (Image: whitehouse.gov)

Health IT funding took a hit in President Donald Trump’s budget blueprint to Congress that once again featured a 37% cut to the Office of the National Coordinator for Health IT.

Trump’s initial budget proposal (PDF), released on Monday, included an $18 billion cut to the Department of Health and Human Services. But that number changed significantly after Congress agreed to raise nondiscretionary spending caps in last week’s budget deal. In a letter to lawmakers, the Office of Management and Budget allocated (PDF) an additional $27 billion in for HHS, bringing the agency $9.6 billion ahead of 2018 funding levels.

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Most of that additional funding would go towards efforts to opioids and mental health. Broadly, funding for health IT-related resources saw cuts identical to the administration’s proposed budget last year.

“It’s basically groundhog’s day again,” Jeff Smith, vice president of public policy for the American Medical Informatics Association (AMIA). “It’s an incredibly similar budget proposal [to last year].”

Here are some of the health IT winners and losers from the administration's 2019 proposal.

Winners

Cybersecurity (+$18M)

The HHS budget in brief (PDF) includes an additional $18 million for cybersecurity. A portion of the $68 million budget will support the new Healthcare Cybersecurity Communications and Integration Center (HCIC) to share threat information across the agency, state and local authorities and the healthcare community at large.

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It's one of the few high points in the proposal, Tom Leary, HIMSS vice president of government relations told FierceHealthcare. 

“The [HHS] administration has been really thinking about and strategizing about how to best engage with the healthcare community,” he says. 

VA-Cerner deal (+$1.2B)

The Department of Veterans Affairs set aside (PDF) $1.2 billion to continue its Electronic Health Records Modernization plan. VA Secretary David Shulkin, M.D., selected Cerner to replace the systems ailing EHR system last year, but the final contract has been delayed while VA officials conduct an interoperability review.  Nonetheless, $675 million has been set aside for the EHR contract and $532 million has been reserved for program management and infrastructure support, according to the VA’s budget in brief.

FDA digital health oversight (+$486M)

The FDA got an additional $486 million to “speed the development of new drugs and medical devices,” a portion of which will go towards the agency’s efforts to create a precertification program which establishes a new regulatory model for digital health technology. The HHS budget gives digital health a node, noting that the funding “will support rapid innovation cycles that will reduce the time and cost of market entry for new products while assuring appropriate patient safeguards.”

Losers

ONC (-$22M)

Like last year, ONC’s budget took a deep 37% cut. The agency has been slimming down ever since, proposing to eliminate the Office of the Chief Privacy Officer along several other programs to focus on usability and interoperability.

But policy advocates with AMIA and HIMSS remained concerned about the drastic cuts to ONC at a time when the agency is being asked to do more under the 21st Century Cures Act.

“I personally, don’t see how they can [operate efficiently],” Leary says, adding that ONC has scaled back its staff even as their portfolio grows. “They have much more responsibility particularly around information sharing and information blocking.”

Smith echoed similar sentiments, adding that even with as the agency has reorganized its staffing levels, it will still be difficult to manage the $22 million budget cut.

“One could argue they would be in a position to mitigate this kind of cut, but I still think that cutting an agency like ONC at a time when increased pressure is going to be applied to deriving value from our health IT investment is just a foolish thing to do at this point,” he says.

OCR (-$8M)

The Office of Civil Rights got a deeper cut than the president’s proposed $6 million reduction last year. With a $31 million overall budget, HHS says OCR will continue “its robust and comprehensive HIPAA program efforts." For HIPAA enforcement the slash in funding could impact how OCR provides guidance, but isn’t likely to change enforcement since the agency uses settlement money to fund enforcement efforts.

AHRQ (-$422M)

Like last year, Trump’s proposed budget includes eliminating the Agency for Healthcare Research and Quality and consolidating it into the National Institute for Health as the National Institute for Research on Quality and Safety. That program would receive $256 million for research, including $70 million for patient safety.

However, that funding will be prioritized differently under the reorganization. NIH will select “unique, systematically-important activities formally funded by AHRQ,” but there will be no funding for “duplicative or lower priority activities” including the Health Information Technology Research portfolio. With this approach, health IT research could get more or less funding, but it will compete with other proposals rather than have a dedicated pot of funding.

“That could potentially make sense,” Smith says. “But it also just seems unnecessary.”

Rural telehealth (-$8M)

Although the HHS budget did highlight new efforts to expand telehealth coverage through Medicare Advantage, the president’s budget also reduced rural telehealth funding through the Health Resources and Services Administration (HRSA) to $10 million, down from $18 million in 2018. HRSA oversees the telehealth network grant program and provides funding to support telemedicine for rural providers.