An Analysis of the Department of Health and Human Services

In my paper, I will discuss the Department of Health and Human Services and its general makeup. I chose to write about this topic because I am currently a Social Work major and am interested in how our Federal Government actually helps people who are less fortunate. As a Social Worker, I am also interested in finding ways to reform government in order to provide needy citizens with access to resources. First, I will discuss the general makeup of the HHS. Then I will talk about the four agencies that received the most appropriated funds for fiscal year 2006-the Centers for Medicare & Medicaid Services, the Administration for Children and Families, the National Institutes of Health, and the Centers for Disease Control and Prevention. Within each agency, I will talk about each agency's goals and how policy is conducted to meet those goals. I will then show where financial, ethical, and general problems of inefficiency occur at this level. Next, I will argue these problems are not necessary, do not benefit the welfare of the general public, and will continue to show what actions could be taken to reduce these problems. Finally, I will wrap up the paper by restating the problems in a general manner, and restating my proposed solutions.

Body

About the Department of Health and Human Services

The Department of Health and Human Services (HHS) currently presents one of the larger and more complex management challenges in Federal Government. The department itself will be appropriated about $644.9 billion for fiscal year 2006 and currently employs more than 65,000 people ("GAO: Major..."). While the Federal Government does its best to help the people and spend money effectively, it still is in need of reform ("HHS-HHS Budget").

The Department of Health and Human Services is composed of twelve different agencies: the Administration for Children and Families, the Administration on Aging, the Administration for Healthcare Research and Quality, the Agency for Toxic Substances and Disease Registry, the Centers for Disease Control and Prevention, the Centers for Medicare & Medicaid Services, the Food and Drug Administration, the Health Resources and Services Administration, the Indian Health Service, the National Institutes of Health, the Program Support Center, and the Substance Abuse and Mental Health Services Administration ("HHS-About HHS").

The Centers for Medicare & Medicaid Services

Currently, the largest part of the $644.9 billion budget of Health and Human Services is consumed by the Centers for Medicare & Medicaid Services (CMS). The CMS has been appropriated $545.5 billion, or about 84.6%, of the HHS' total budget of $644.9 billion for fiscal year 2006.

The largest example of inefficiency within the HHS can be found in the Centers for Medicare & Medicaid Services. According to the Government Accountability Office, in the 2004 fiscal year, this agency made $19.9 billion in "improper payments." $19.9 billion! In percentage terms, this works out to about 3% of the HHS total 2006 budget. 3% is not a large error margin, but think in terms of the number of people that potentially could be helped. Think about how many more lives could be improved or even saved. If we think about things in this sense, the Department of Health and Human Services is in need of reform ("GAO: Major...").

The CMS, according to its own Active Projects Report,"administers the Medicare program and works in partnership with the States to administer Medicaid..." ("Active Projects Report..."). About 83 million Americans receive benefits from Medicare and Medicaid. This department spends 20% of the Federal Government's dollars and, combined with state spending, accounts for 45% of the nation's health care spending ("Active Projects Report...").

The Medicare program was created as an addition to the Social Security Act in 1965 under President Lyndon Johnson. It is funded primarily by taxes from payroll, and supplemented by premium payments from those who receive Medicare, as well as general Federal revenues. To be eligible for Medicare, one must be at least sixty-five years old, have permanent kidney failure, or have a certain disability. Medicare is then further broken down into two parts: Hospital Insurance, called Part A, and Medical Insurance, Part B. Part A Medicare will pay for any inpatient hospital care and 100 days in a nursing home, but usually involves a large co-pay. Part B Medicare is entirely voluntary and requires the individual to pay a monthly fee. Part B Medicare will pay for clinic and lab fees, certain diagnostic tests, and wheelchairs and walkers. Though it does not cover dental expenses, long-term hospital care, most prescription drugs, or glasses, all things the elderly commonly need, it is overall a decent program which does provide some health insurance to poorer individuals. If a way could be found to reduce the afore-mentioned "improper payments" totaling $19.9 billion, just think how many more people would be helped and how much more each individual might receive. Perhaps some dental expenses, long-term stays in the hospital, and increasingly costly prescription drugs could be subsidized with this money (Wimmer).

The other major program administered by the CMS is Medicaid. This program also was created as an addition to the Social Security Act in 1965. The Medicaid program draws its funding partially from the Federal Government and partially from state-specific subsidies. The Federal Government sets broadly defined requirements concerning eligibility, benefits, and payments, and each state is allowed to set up its own Medicaid program so long as it fits within the Federal guidelines. Generally, pregnant women, children and teenagers, the blind, and disabled are covered by Medicaid. Medicaid coverage does vary by state, but as a general rule, one who qualifies cannot be billed for certain medical services. Also, for these services, the Federal Government sets a rate structure, which also varies by state. Here is how the rate structure works: first an individual will want to bill Medicaid for a service, next, the Federal Government looks to its rate structure set for the particular state, last, the health care provider must accept the amount offered by Medicaid, or go to its own form of revenue sharing. So, for example, one might need an X-Ray, and hypothetically say the X-Ray costs $100. The Federal Government will look to its rate structure, and hypothetically may offer to pay $67. So, now the health care provider, if it has already accepted any Medicaid patients, must accept the lesser payment, putting it at a $33 loss for the service, or it can go to its own form of revenue sharing. If a health care provider has accepted one Medicaid patient, it must accept all the rest that come-the provider cannot pick and choose.

This scenario causes problems in the medical health area and has also resulted in a current "crisis" situation in Wisconsin in regard to dental care for those living in poverty (Wimmer). Since Medicaid will only pay a percentage of the regular cost for dental services, which results in a financial loss, dentists will obviously not accept any Medicaid patients. Again, I would like to refer to the calculated amount of $19.9 billion in "improper payments" made by the CMS. Even if just a percentage of that money could be recovered and properly distributed, just think of how many more services would be available to those under Medicaid ("Active Projects Report...").

The Administration for Children and Families

The Administration for Children and Families (ACF) has the second largest appropriated budget in the HHS, with a 2006 appropriation of $45 billion ("HHS-HHS Budget"). On its website, the ACF declares its major goals: To empower "families and individuals...to increase their own economic independence and productivity," to create "strong, healthy, supportive communities that have a positive impact on the quality of life and the development of children," to create "partnerships with individuals, front-line service providers, communities, American Indian tribes, Native communities, states, and Congress that enable solutions which transcend traditional agency boundaries," to "plan, reform, integrate, and improve needed access," and to develop "a strong commitment to working with people with developmental disabilities, refugees, and migrants to address their needs, strengths, and abilities." The ACF also declares that "