Indian Health Service

Press Release

IHS-014-97

Headquarters Faces Possible Reduction

Posted October 1, 1997
For additional information, contact the IHS Communications Office in Rockville, MD,
at (301) 443-3593, FAX (301) 443- 0507

The Indian Health Service announced today that Headquarters restructuring and funding levels will reach a level in Fiscal Year 1998 that will likely require a reduction in the number of Headquarters employees.

The Indian Health Service has managed to avoid involuntarily reducing Headquarters employees since 1994 by not filling vacancies unless critically required and approved on a case-by-case basis, by reducing the number of employees through buyouts and early retirement, and by applying financial management tools and adjustments and reducing contracted administrative services.

"Beginning in Fiscal Year 1994 we told our employees that a reduction in force would be a last resort option," said Luana Reyes, Director of Headquarters Operations for the Indian Health Service. "We are faced with an increasing Headquarters payroll deficit beginning in Fiscal Year 1998 that will increase to several million dollars by Fiscal Year 2000. We have reached the point where it is no longer possible to keep Headquarters solvent without using all the management and personnel tools available to us."

The Indian Health Service Headquarters is looking to manage the deficit by reassigning, reducing, or transferring functions that are not core Headquarters functions. The Indian Health Design Team, a tribally directed group, recommended that the functions of Headquarters reflect a change of direction from one of overseeing programs to one of supporting programs in the field. This change is reflected in the Headquarters core functions of advocacy, policy development, and health leadership.

Headquarters restructuring and downsizing is also in response to the pressure to reduce the size of the Federal Government, to respond to Congressional budget cuts in appropriations for administrative functions, and to respond to the transfer of Headquarters tribal shares. Even without budget pressures, restructuring would take place as a result of good management practices. The deficit is a result of reduced appropriations for Headquarters functions for all agencies of the Government. It also reflects the impact of the modest budget increases that the Indian Health Service has received but that do not cover the mandatory cost increases of more than $100 million each year. "Even though the increases do not cover our mandatory costs," said Reyes, "it reflects the priority that Congress places on our program. Most agencies did not receive an increase and many had their budgets decreased."

Also contributing to the deficit is the transfer of functions, operations, and funds to tribes for the Headquarters functions and operations they have assumed under self-determination laws. Approximately 38 percent of Headquarters functions have been assumed by tribes and by the year 2000 it is expected that at least 50 percent of Headquarters functions will have been assumed. This allows Headquarters to reduce, share, or transfer functions. "Many tribes elect to continue having the Indian Health Service provide their health care," said Reyes, "and the demand for those services may be met by sharing them with other functions or, in the case where the function is not a Headquarters core function, having the function provided directly to the tribe at the field or Area Office level."