Chairman and Members of the Committee:

The Northwest Portland Area Indian Health Board (NPAIHB) would like to thank the Subcommittee for the opportunity to provide comments and is pleased to submit the following testimony for the record. The Northwest Portland Area Indian Health Board is a tribal organization that represents 43 federally recognized Tribes in the states of Washington, Oregon, and Idaho on health-related issues. The Board works as an advocate to represent Northwest Tribes on health care matters involving federal and state agencies, facilitates state-tribal consultation, develops policy and legislative recommendations, and most importantly-conducts analysis and develops recommendations on the Indian Health Service (IHS) Budget.

For the past eight years representatives from the Portland Area have joined Tribes nationwide in the IHS budget formulation process that includes IHS direct and Tribally operated programs and urban programs. This group, commonly referred to as the I/T/U, meets annually to develop the IHS budget. The Northwest Tribes' long interest in the budget process allows them to understand the complexity of developing the final approved appropriations. In the past, various Administrations have underestimated the need for funding the Indian Health Service. They have often over estimated the amount of revenue received from collections from Medicare, Medicaid, and third party collections. We respectfully request that our annual IHS budget analysis report, "FY 2006 IHS Budget: Analysis and Recommendations," be part of the record. This document serves as a reality check to the lack of integrity in past executive branch budgets and provides reasonable estimates of Indian health funding needs.

The President's FY 2006 budget request for the IHS is $3.05 billion and is an increase of $62.9 million (2.1% increase) over last year's final enacted level. Many Tribes throughout Indian Country will generally agree that, given the current budget realities, this is the best IHS budget of the Bush Administration. It includes an average increase of over 5% for the health services account. This is double the average increase for the Department's other health and social service programs. In addition to the reasonable health services account increase, Northwest tribes agree that the distribution of the increase and the redirection of new construction facilities dollars to health services is both smart and is reflective of tribal consultation in developing the IHS budget. In nearly every case, the sub-subactivity increases (line items) are true to the priorities identified by tribes in the budget formulation process.

Compared to the last four years and with other agencies, IHS did very well and it deserves this increase given its record of strong performance.

Unfortunately, compared to the great need it is still a budget that, taken together with other trends in health care finance and inflation, will be less than what is needed to maintain the IHS funded health programs. The NPAIHB estimates that it will take $371 million to maintain current services for IHS and tribally operated health programs. Thus, the President's request will fall short by $308 million. The expenses associated with pay act increases and staffing for new facilities ($27.4 million) and proposed program increases ($35.4) exhausts the President's proposed increase of $62.9 million. Despite the small overall increase, there are increases for the health services account line items. This is achieved by postponing new facilities construction for one year. By doing so, IHS is able to allocate increases to tribally identified priorities in the health services line items such as Dental (9.8% increase), Mental Health (7.8% increase) and Public Health and Health Education (10%).

The NPAIHB and Northwest Tribes join with the Senate Committee on Indian Affairs (SCIA) in supporting the moratorium on health facilities construction (see SCIA - FY 2006 Views and Estimates letter). As we have indicated previously, this pause in building health facilities accomplishes two things. First and most importantly, it allows significant increases to be applied to the health and prevention services accounts. It will allow those health programs to enjoy significant increases and maintain the same level of quality health services provided to Indian people. They have not been able to maintain the same level of services in year's past due to inadequate increases. Secondly, it will allow the Agency the necessary time to complete its revision of the Health Facility Construction Priority System (HFCPS). Congress directed the Agency to complete this process in FY 2001. The new system will allow facilities construction needs of Indian Country to be re-prioritized with current data and hopefully with a new system that will reflect the true health facility needs of all Indian people. The current priority list was developed in 1991 and virtually locks Tribes out from badly needed construction dollars unless you are one of the facilities on the current list. The current environment of health care delivery has changed dramatically since 1991. Health care delivery has changed from large hospital based systems to smaller outpatient health clinics, and the current use of facilities construction resources may not be the most beneficial. Preliminary reports of the new system promises to be much more dynamic and will address the health facilities needs of a greater number of tribes.

Contract Health Service (CHS) funding is the most critical line item of the IHS budget for Tribes in the Northwest. The Northwest Portland Area Indian Health Board estimates $62.3 million is needed to maintain the current level of services purchased with Contract Health Service (CHS) dollars. The FY 2006 request includes $18.9 million to fund inflation and $7 million for population growth. This is the first time since FY 2001 that the CHS program has received any funding to cover these critical areas. The increase was sufficient to fund population growth and the medical inflation rate and for the first time Tribes saw the level of CHS denials begin to fall. This year's request will fall short by $35.3 million to truly fund inflation and population growth. The NPAIHB estimates that the true CHS funding need is approximately $117 million. This estimate would provide funding for inflation ($62.2 million) and additional funding ($55 million) to address current levels of CHS denied and deferred services and increased funding for the Catastrophic Health Emergency Fund (CHEF). In FY 2004, the unfunded amount for Catastrophic Health Emergency Fund (CHEF) cases totaled $13.4 million. There were 667 CHEF cases funded and 756 were not due to lack of funding. Over half of the cases applying for CHEF funding could not be met! It is estimated that millions of dollars in unreported cases exist since Indian health programs do not report cases once they know the funding has been exhausted during the fiscal year.

Although willing to concede that the President's request is a reasonable one and one that reflects priorities identified in the budget formulation process, Northwest Tribes have serious concerns. They fear that the Congress will once again take the President's request and make changes to suit the priorities of their own constituencies and secondly, that they will once again apply an across the board reduction to meet artificial budget targets that have nothing to do with health care priorities. Tribes want money added to the budget and they are alert to the danger of Congressional cuts hiding behind the word rescission. Over the last four years, the rescissions as a percentage of the approved IHS budget have increased significantly. In FY 2002, the rescission ($1 million) was approximately 1% of the approved increase ($130 million) for the IHS budget. In FY 2003, the effect of the rescission ($18 million) grew to 17% of the approved increase ($109 million) for the IHS budget. In FY 2005, the rescissions ($42 million) have escalated to become 40% of the approved increase ($105 million) for the IHS budget. The following graph illustrates the effect of rescission on the IHS budget increases:

The IHS, Tribal, and Urban Indian health programs have demonstrated the ability to effectively utilize available resources to improve the health status of Indian people. The clearest example of this is the drop in mortality rates over the past few decades. However, there is still much work to be done to improve the health status of Indian people. American Indian and Alaska Native mortality rates for alcoholism, tuberculosis, motor vehicle crashes, diabetes, unintentional injuries, homicide, and suicide are higher than the mortality rates for other Americans. Many of the health problems contributing to these higher mortality rates are behavioral. For example, the rate of violence for AI/AN youth aged 12-17 is 65 percent greater than the national rate for non-Indian youth. These health disparities can be prevented with adequate funding for the IHS and Tribal health programs.

In order to make progress and combat these health disparities, IHS and Tribal health programs will require the continued support of Congress. We would also respectfully request that the Subcommittee and Congress exempt IHS and Tribal health programs from these devastating rescissions. The rescissions mean cuts in health services and reduce the level of care to Indian people.

Chairman and Members of the Committee, we graciously thank you for this opportunity to provide testimony on the IHS budget.

Mr. SIMPSON [presiding]. Thanks, Andy.

Are there any questions?

Mr. DICKS. Well, we appreciate your testimony and realize this is a very serious problem. Let us see what we can do with our allocation. It is a difficult budgetary year. But I appreciate your sincere testimony about these problems.

Mr. JOSEPH. We are people, here in the United States. You know, we had a leader that said we are all supposed to be treated equally. Now this is the amount of medicine that the Government gives Indian people when, for the rest of the people, the cup is full. Prisoners are treated with the full cup, compared to our people.

So that many people are suffering every day, elders, children. They are living in pain, because the Government is not living up to its obligation.

You know, I got a nephew that got hit in that cafeteria in Iraq. There are more of our people in the service than any race in the United States, but we are treated with only half a cup. Thank you. Mr. SIMPSON. We appreciate your comments and testimony, Andy. Thank you. Alfred Lane.

THURSDAY, APRIL 14, 2005.

PUBLIC WITNESS HEARING:

NATIVE AMERICAN AND ALASKA NATIVE ISSUES

WITNESS

ALFRED LANE, VICE CHAIRMAN, CONFEDERATED TRIBES OF THE SILETZ INDIANS OF OREGON

Mr. LANE. Thank you, Mr. Chairman and members of the Committee. My name is Alfred Lane, and I am the Vice Chairman for the Confederated Tribes of the Siletz Indians of Oregon. I would like to thank you for inviting us to present testimony on the fiscal year 2006 budget, as it affects Indian Country.

Our tribe is fortunate to live along the beautiful Oregon coast, but we are isolated from metropolitan areas. As a result, our most critical funding needs are for health care and education.

Our tribe operates an out-patient clinic under a 638 self-governance compact with the Indian Health Service. We provide more than 24,000 primary care visits each year. We are very concerned about the funding levels for the Indian Health Service. The IHS budget has not kept pace with medical inflation rates or growing patient populations. As a result, we do not have enough funds to meet the medical needs of our people.

The Northwest Portland Area Indian Health Board did a detailed study of the fiscal year 2006 IHS budget, and made a series of recommendations regarding Indian health care funding needs. Our tribe is an active participant in the Board's activities, and we completely support the analysis and recommendations made by the Board.

We have provided a copy of the Board's report to the Committee staff, and urge the Committee to carefully consider the Board's analysis and recommendations.