OMB Proposal Gives Surgeon General Management Role : Merging of AIDS Programs Urged

The Office of Management and Budget has proposed consolidating all federal AIDS programs in the surgeon general’s office, an idea that is expected to raise questions among officials in the public health community because Surgeon General C. Everett Koop has not been actively involved in the administration of health policy.

The OMB’s fiscal 1987 budget proposals for the Health and Human Services Department also include cuts in Medicare, Medicaid and National Institutes of Health grants, according to OMB budget documents made available to The Times.

Total Request Granted

According to the documents, the OMB granted the department its full request for AIDS-related activities--$213 million--for fiscal 1987, which begins next Oct. 1. That is $17 million more than the Administration requested for the current year but $17 million less than Congress appropriated to combat AIDS, or acquired immune deficiency syndrome, a fatal disease that attacks the body’s immune system.

It is not clear from the budget documents whether the surgeon general would have a voice in formulating AIDS policy or allocating funds to the agencies within HHS that administer a variety of AIDS-related programs. The documents say only: “The surgeon general and a small staff will be designated to coordinate the department’s activities.”

The surgeon general’s office could not be reached for comment, and an OMB official said only: “There are several unresolved issues with HHS, and AIDS is one of them.”

Puzzled by Proposal

Rep. Henry A. Waxman (D-Los Angeles), chairman of the House Energy and Commerce subcommittee on health and the leader of the fight in the House for increased funding for AIDS activities, said he is puzzled by the proposal.

“Suddenly OMB has gotten involved and is managing health programs in budget documents,” he said. “For some reason, OMB wants to transfer these complex research and public health programs to an office of very little direct experience with the epidemic. We’ll have to monitor this plan very carefully.”

Another source speculated that the proposal to move AIDS activities to the jurisdiction of the surgeon general’s office may be tied to a suggestion once circulating within the White House that the surgeon general “calm public alarm” by issuing a public report on AIDS. The source said the idea “now seems to have been dropped.”

Transfer of Authority

This same source speculated that the proposed transfer of authority may be tied to the fact that, during the Administration of President Jimmy Carter, the surgeon general also served as assistant HHS secretary for health, the official who supervises all HHS health activities.

This source said the OMB may have wrongly believed that the surgeon general still oversees the NIH, the Centers for Disease Control, the Food and Drug Administration and the other HHS agencies that have AIDS-related duties.

“It may well be that someone at OMB is just confused about who is in charge,” said the source, who did not wish to be identified.

While the OMB left HHS’s request for AIDS funds untouched, it proposed significant cuts in other health programs. Otis R. Bowen, the new HHS secretary, is reported to have protested these proposals to the White House, which can reject them before President Reagan submits his fiscal 1987 budget to Congress in February.

Rejected Before

Many of the health-care financing proposals have been suggested in previous years, only to have been rejected by Congress. The OMB proposed, for example, that elderly Medicare beneficiaries pay higher premiums for their coverage and that Medicare reimbursement rates for hospitals be increased next year by only 2%, not enough to offset inflation. According to the documents, the OMB is also studying a new formula for computing payments to physicians who treat Medicare patients.

The OMB also repeated a previously unsuccessful proposal to limit the costs of the Medicaid program for the poor, in part by reimbursing states only for “medically necessary services.” Also among the OMB’s Medicaid proposals is a limit to the federal payment for educational and vocational services for the mentally retarded and a requirement for a mandatory second opinion program for surgery. In California, the program is called Medi-Cal.

In the NIH budget, the OMB proposed a reduction from the Administration’s requested $5.01 billion in fiscal 1986 to $4.9 billion in fiscal 1987. Congress appropriated $5.5 billion in fiscal 1986.

Cut in Research Grants

The OMB would cut the number of NIH research grants from 18,137 in 1986 to 18,000 in 1987 and freeze it at that level through 1989. It proposed reducing the number of university medical centers that receive special government funds from 517 in 1986 to 500 through 1989.

For the CDC, the OMB would reduce the chronic and environmental health program from $30.6 million to $15.7 million in 1987, arguing that the cut is “in recognition of other agencies’ expertise in suicide, domestic violence, alcohol, drug abuse and mental health.” The reduction could impair CDC’s branch on violence, which is conducting a major study on suicide.

The OMB also proposed cutting by more than half federally backed guaranteed loans for medical and health-profession students and suggested further reductions in funds for a vaccine stockpile. A year ago, supplies of certain vaccines were critically short.