Federal Cuts in Medical Research Funding Can Significantly Impact the Health Care System

On March 1, 2013, President Obama signed an order putting budget cuts – or sequesters, as they are called – into effect which require National Institutes of Health (NIH) and other research agencies to cut their budget. NIH has already cut 5 percent or $1.55 billion from its fiscal year 2013 budget. It is estimated that more than 80 percent of the NIH’s budget is spent on 300,000 research personnel at over 2,500 universities and research institutions in the United States. The situation is not very much different with other agencies. Federal cuts on biomedical and health care research programs, projects and activities would significantly impact the health care system. On September 12, 2013, Research!America’s 2013 National Health Research Forum was held in Washington, D.C. Top government and business leaders discussed the aftermath of federal cuts and emphasized the need to bring together science and research advocates to call members of Congress.

According to the NIH director, Francis Collins, the NIH lost $1.7 billion in federal funding as a result of the sequester, and it would lose another $600 million (would not fund 650 grants) in October 2013. In the opinion of drug company executives, drug companies count on federal investments in the NIH and other agencies since those investments are the seed money for future breakthrough therapies and there would be less new treatments in the absence of that money. The opinions of other eminent personalities in the 2013 National Health Research Forum are as follows.

  • FDA Commissioner Margaret Hamburg said it is quite difficult to retain the best people for reviewing drugs and medical devices since the sequester had reduced the user fees and slowed down its flow to the agency, and strained resources
  • William Hait, global head of Janssen Research & Development opined that federal cuts weakened the ability of medical school faculty to conduct research and thereby discouraged medical students from pursuing careers in science and research. The next generation in the research field will be lost due to this cultural shift
  • According to CDC Director Tom Frieden, sequestration will make CDC cut thousands of public health workers in 46,000 state and local public health jobs. This will impair the efforts to detect outbreaks and provide vaccinations at the right time, which would increase human sufferings
  • Patrick Conway, chief medical officer for CMS and director of CMS’s Center for Clinical Standards and Quality said that government investment had improved the delivery of health care services. The Affordable Care Act imposes penalties on hospitals if too many Medicare patients get an infection during their stay in hospital. Since payment incentives are aligned, infections have gone down

However, NIH clearly states that federal cuts are delaying progress in several breakthroughs such as the development of better cancer drugs that can cure tumor with fewer side effects, prevention of debilitating chronic conditions and research on a universal flu vaccine that could fight against every strain of influenza without a yearly shot. NIH also says sequestration can impose potential risk to the scientific workforce as it would reduce the funding available for grants.

In short, federal cuts put medical researchers’ funds at risk and discourage medical innovations aimed at finding new, effective treatments. At a time like this, medical and health research personnel should make sure that their grants are expended within the given timeframe and in keeping with their budget limits. Outsourcing medical transcription can help. A professional medical transcription company can help researchers get their transcription managed cost-effectively and completed before their grant closes or expires.

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