The federal government has a trust responsibility to fund Indigenous health care. But the Indian Health Service (IHS) has long been underfunded by it.
June Zhao, an assistant professor at the University of Oklahoma Hudson College of Public Health, said she learned about this issue in conversation with leadership at an IHS clinic in the state. They shared how limited financial resources result in challenges with hiring staff and maintaining facilities. This has impacted their ability to provide health care.
She decided she wanted to help address this fundamental problem.
StateImpact’s Jillian Taylor and OPMX’s Sarah Liese spoke with Zhao about her recent research, which explores a solution that could help increase and sustain IHS funding.
TRANSCRIPT
Jillian Taylor: June, thank you so much for joining me.
June Zhao: Thank you for having me.
Taylor: You've been looking at the underfunding of IHS and some of its contributing factors. Could you explain what those are?
Zhao: So there were three major contributing factors. The senators and congressmen believe that IHS itself underestimated its own budget. So, they didn't have enough data to figure out their needs, actually. And then the second reason is, basically, budget authorities themselves face fiscal constraints. And the third reason is some senators and congressmen are concerned about IHS management.
Taylor: So, could you give us an estimate of the annual IHS funding gap?
Zhao: Based on our estimation using congressional data, it shows that, from fiscal year 2009 to 2024, the gap between what IHS proposed and the amount of money that Congress actually enacted is $60 million. And that is in 2008 U.S. dollar value. After inflation, that is roughly $100 million.
Taylor: And your solution is based off of an existing program called the Vaccine Injury Compensation Trust Fund. Could you tell me about what that is?
Zhao: Basically, it's a liability insurance program established by Congress in 1986 to have enough funding to compensate the patients or consumers who believe that they were injured by vaccines. Congress established a trust fund for that program, and they put in initial money. They started to charge an excise tax – $0.75 per dose. Basically, they collected that excise tax revenue every year, and then the trust fund gave the money to the Department of the Treasury to invest that money.
Taylor: So, how would a similar IHS trust fund work?
Zhao: The Vaccine Injury Compensation Trust Fund has been doing very well. Can we do something similar? How about Congress also authorize or establish an IHS trust fund – just to get the trust fund started, to hire some staff members and start to have development fundraising activities. But the main goal is to raise funding in the principal in that trust fund. So, the principal every year will generate interest revenue, and the interest revenue will be used to pay for that gap.
Taylor: How much money would need to be raised to make that fund self-sustaining?
Zhao: Our goal is to generate interest revenue, which is $100 million now. And if we have a return on investment rate of 10%, that will be equal to $1 billion. So, we need roughly $1 billion in the principal in that trust fund.
So, what we propose is that, if Congress is not able to or is not willing to increase the funding temporarily, at least they can authorize IHS to receive gifts so that they can generate the money in that trust fund.
So, we believe that there are enough societal interests and preferences to allocate societal resources to Native American causes. If we are able to get all these resources, societal resources, together in the IHS trust fund and generate interest revenue, that would be really good.
So, it improves the Native American population's health and, indirectly, their economy. But it also does not take any fiscal resources, tax dollars, away from non-Native Americans. We cannot let patients die, and we do need this solution.
Taylor: June, thank you so much for speaking with me.
Zhao: Of course. Thank you for having me.
This transcript has been edited for clarity and length.
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