HHS Cutbacks Exceed Forecast : Many Fear Disruption of Health, Social Programs

The first round of Gramm-Rudman spending cuts, which will throw a $1-billion punch at the massive Health and Human Services Department, appears likely to force sharper program disruptions than White House budget officials have forecast.

“This will be very painful,” William Lukhard, commissioner of the Virginia Social Services Department, said of a coming $6.5-million cutback in HHS funds for a wide range of social services in his state.

Less day care for children of the working poor, fewer investigations of adult and child abuse, reduced foster child services--those are the prospects that Virginia and other states face beginning March 1, when 4.3% across-the-board cuts in federal domestic programs become effective.

“Four years ago, we took a 22% cut,” Lukhard noted. “The fat is out of it. We’re down to the bone.”

His state has a lot of company. Although Social Security benefits are exempt from cuts, officials predict less daring research on Alzheimer’s and other diseases, smaller fuel bill subsidies for the poor, fewer vaccinations for children, slower testing of new food and drug products and shorter hospital stays for Medicare patients.

And federal officials, who have spent a confusing month determining how to implement the first round of cuts mandated by the new Gramm-Rudman budget-balancing law, say that the second round in the fall could be several times worse because the projected deficit for fiscal 1987, which begins on Oct. 1, is now estimated at $34 billion greater than the Gramm-Rudman ceiling.

“A 4.3% cut is not a catastrophe,” HHS budget officer Dennis P. Williams said. “However, if there is a 15% to 20% cut in fiscal 1987, that could be devastating.”

For fiscal 1986, when the Gramm-Rudman cuts total only $11.7 billion, precise details of the defense cuts already have been disclosed. The White House intends to reveal details next Wednesday of the non-defense trims, including those at HHS, when it formally orders federal agencies to impose the cuts. Interviews with HHS officials and beneficiaries of HHS programs suggest that the impact will be substantial.

Affect on Research

“It will restrict our ability to follow hot new leads,” said Dr. Richard L. Sprott of the National Institute on Aging, an arm of the National Institutes of Health that sponsors research on Alzheimer’s disease and a host of other age-related maladies.

“The biggest impact will be on high-risk research,” which entails long-term projects with the greatest promise of breakthroughs but also the highest risk of failure, Sprott said.

Sprott said the cuts from individual grants will range from 3% to 8%, “depending on how far along the research is. We’ll probably be able to pay 25 fewer grants than the 200 we had expected.”

Dr. Caleb E. Finch, a major recipient of Aging Institute grants as co-director of an Alzheimer’s research center that includes USC, Caltech, UC Irvine and the City of Hope Medical Center, seconded Sprott’s concerns. He said that further cuts in the already “extremely limited” research funds “will arrest these programs in their infancy.”

Dr. Carl Cotman, a UC Irvine psychobiologist with an Alzheimer’s research grant, said that the Gramm-Rudman cuts “will have a real major impact. . . . We figure it could cost us up to one grant for every four or five faculty members here. Labs are going to fall apart.”

Large Grants Cuts

At HHS’s Public Health Service, finance director John P. Buckley said that cuts in grants could prove very large for some researchers. “In some cases, our grant recipients are building a 300-foot bridge,” Buckley said, “and if you cut off 4.3%, they just can’t get to shore.”

Gerald F. Meyer, a top official of the Food and Drug Administration, told the House Energy and Commerce Committee on Thursday that his agency is still searching for ways to avoid cutting back on inspections of food and drug plants and tests of new products.

Sources said that up to 200 of FDA’s 1,900 employees may have to be furloughed for brief periods, meaning slower approvals of new drugs and medical devices despite a major effort by the Reagan Administration to speed up that process. The Gramm-Rudman Act limits cuts in the giant Medicare program for the elderly to 1% this year. But California Rep. Henry A. Waxman (D-Los Angeles), chairman of the House Energy and Commerce subcommittee on health and the environment, predicted that “more hospitals will be pushing Medicare patients out too soon.”

For hospitals that have a lot of elderly patients, a Waxman aide explained, “a 1% cut in federal payments can be a big problem if they are operating at the margin.”

Higher Vaccine Costs

Waxman also said that cuts in the child immunization program will drive up vaccine costs. “In fiscal 1986 alone,” he said, “probably a half-million children will not be immunized” because parents will find the shots are too expensive.

HHS officials declined to comment.

State social services agencies, major recipients of HHS grants, are bracing for Gramm-Rudman’s impact. Federal cuts for social services in New York will be “a real hit which could have a drastic effect on some of the programs that actually help keep people off welfare rolls,” said Terry McGrath, spokesman for the state’s Social Services Department.