Uncertainty for Healthcare as Government Shutdown Looms

Sep 27, 2023
A government shutdown could thrust healthcare providers into unpredictable and uncharted territory, even though vast portions of the federal healthcare apparatus, including and Medicare and Medicaid, are immune from annual budget showdowns in Congress.
According President Joe Biden's proposed budget for fiscal 2024, which begins Sunday, 91% of Health and Human Services Department spending is categorized as mandatory, not as discretionary spending that is subject to yearly appropriations bills or periodic reauthorizations.
Related: Congress faces tight deadline to extend key health programs
That still leaves more than $150 billion worth of health-related spending that Biden seeks from Congress unfulfilled as House Speaker Kevin McCarthy (R-Calif.) contends with a revolt from within the GOP conference that threatens to bring the machinery of government to an abrupt halt.
Exactly how Congress' failure to pass spending would impact specific agencies and the providers and patients they serve is difficult to predict.
HHS released an updated contingency plan last week that details how many employees would be permitted to continue working in the absence of new appropriations and how many would be furloughed. The department also specified what vital functions would continue, even if the staff positions were not funded.
According to that document, 51,293 HHS employees would stay on the job and 37,325 kept away until Congress agrees to a spending deal. Those who remain would work on programs that have mandatory funding such as Medicare, activities supported by user fees such Food and Drug Administration reviews of new pharmaceuticals and medical devices, areas supported by supplemental COVID-19 funding already on the books, and programs with multi-year funding that has already been enacted, such as the Indian Health Service.
Some programs and workers affected by a shutdown would still be pressed into service—with pay delayed until after a shutdown is resolved—if their jobs are critical to treating patients or maintaining sensitive experiments, for example, at the National Institutes for Health.
Others whose jobs are essential to protecting property or supporting funded activities would also be expected to work.
"HHS will continue any necessary activities in the event of a lapse in appropriation," the department wrote in its contingency plan. "For example, the Administration for Strategic Preparedness and Response will maintain the minimal readiness for all hazards, including COVID-19, pandemic flu and hurricane responses."
Nevertheless, the Administration for Strategic Preparedness and Response would retain just 47% of its roughly 1,000-person workforce. As with all of HHS contingency plans, this agency's blueprint does not specify what the consequences may be for the public.
The White House, HHS and several departmental agencies did not respond to numerous requests for interviews.
There are some important differences facing the healthcare sector under this potential shutdown that make it both more alarming and harder to anticipate than the congressional deadlock that spanned 35 days from late 2018 into early 2019. At that time, five of the 12 annual appropriations bills that Congress is supposed to pass had already been enacted, including the HHS budget. This year, lawmakers have not sent any fiscal 2024 spending measures to Biden.
Another wrinkle this year is that Congress has also failed to approve reauthorizations for key health programs that are due to sunset along with the fiscal year on Saturday, including federally qualified health centers, the graduate medical education program and the National Health Service Corps.
According to HHS' contingency plan, federal workers would continue to support all of those programs in a shutdown, but stakeholders are already worried.
"Any disruption to our delicate financial balance, and even a brief interruption in our federal funding, could have a devastating impact and long-term impact on community health centers and on our ability to continue to treat all of the patients who walk through our doors," Michael Taylor, CEO of New Haven, Connecticut-based Cornell Scott-Hill Health Center, said at a news conference last week.
National Association of Community Health Centers spokesperson Amy Simmons lamented the confluence of stalled reauthorizations and a potential federal shutdown. "It’s creating a lot of anxiety and disruption in the health center community," she said. "You can’t run healthcare delivery for 31.5 million patients on a month-to-month basis. We have thousands of advocates who are aware, concerned and reaching out to Congress."
The community health centers organization is hoping that Congress at least passes a stopgap measure to extend the federally qualified health centers program and its funding.
But the contingent of House Republicans forcing the showdown on Capitol Hill has already rejected the notion of a temporary fix to prevent a shutdown. Furthermore, House GOP leadership has scheduled the full-year FDA funding bill for a vote this week, but none of the other major health spending bills or reauthorizations.
The White House has warned there will be consequences if Congress doesn't act by Saturday.
"A Republican shutdown would stall critical research on diseases like cancer and Alzheimer’s because the National Institutes of Health would be forced to delay new clinical trials," the White House said in a news release last week. "New patients, many of whom are desperately waiting for a chance at new treatment through a clinical trial, will be turned away."
Like the NIH, the Centers for Disease Control and Prevention is especially exposed. "The CDC and NIH are certainly vulnerable because they rely primarily on discretionary appropriations. They're not running mandatory programs like Medicare or Medicaid," said Paul Van de Water, a senior fellow at the Center on Budget and Policy Priorities, a left-leaning think tank.
According to HHS, less than a quarter of NIH employees and 41% of CDC staff would remain on the job absent new appropriations.
While specific short-term problems might be hard to identify, the longer-term effects of a shutdown—or just coming close to one—are easier to envision, said Beth Resnick, assistant dean for practice and training at the Johns Hopkins Bloomberg School of Public Health. For instance, this kind of political disruption is discouraging to the federal workforce, which has implications for retaining and recruiting people to manage government programs.
"It's really hard to live your life like that and try to have a functioning system when everything's always up in the air," Resnick said. "The damage to morale and all that, that might even be bigger than the actual impact of whatever the shutdown ends up being."



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