OU researchers propose a novel solution to increase Indian Health Service funding

For many years, the Indian Health Service (IHS) has been underfunded, leading to health and life expectancy disparities among Indigenous people, according to University of Oklahoma researchers. In a newly published article in Health Affairs, OU researchers propose a novel trust fund solution to increase and sustain the funding level, with the ultimate goal of improving health care access and outcomes.

IHS underfunding has been a challenge for tribal nations and the United States, and it is highly relevant to Oklahoma, which was partly founded on Indian Territory. The health of Indigenous populations in the U.S. has suffered greatly because of chronic underfunding of IHS. Indigenous people have a life expectancy of 67.9 years – a decade less than the average U.S. life expectancy."

Junying (June) Zhao, Ph.D., Ph.D., MPH, lead author, assistant professor, OU Hudson College of Public Health

"The difference in federal health care investment compared to other health programs is stark," she added. "In fiscal year 2021, per capita federal spending for the IHS was $4,140. In comparison, the Bureau of Prisons spent $8,302; Medicaid, $8,908; the VA, $12,223; and Medicare, $15,094. For the IHS, this has meant staff shortages, outdated facilities and care that is declined or deferred."

To raise funding, Zhao and her research team propose the creation of an IHS Trust Fund, modeled after the federal Vaccine Injury Compensation Trust Fund. In the late 1980s, Congress made a one-time appropriation to the Vaccine Injury Compensation Fund, which has since collected excise taxes on vaccine sales and invested its balances. As of January 2023, the fund held over $4 billion, which is used to pay for injury claims. An IHS Trust Fund would operate similarly to generate ongoing financial resources for unmet Indigenous health care needs.

From fiscal years 2009 to 2020, the IHS was underfunded by about $60 million annually, Zhao said. To generate a $60 million annual return, about $600 million would be needed for the baseline principal, assuming a modest 10% return rate on investments. Accounting for inflation, that number would be close to $1 billion today, she said.

In addition to a one-time congressional appropriation to launch an IHS Trust Fund, Zhao and her team suggest that Congress should grant IHS the ability to accept gifts. Although government programs typically cannot accept gifts, Zhao believes that some entities and individuals have shown the ability and desire to contribute. There is a precedent for IHS accepting gifts: About 20 years ago, the IHS manual included a policy for donations.

"This approach is similar to endowments created by major universities for their capital projects," said Pallab Ghosh, Ph.D., an associate professor in OU's Department of Economics and co-author of the paper. "We believe it would be good to apply this solution to the IHS budget problem as well."

The IHS health care system is comprised of IHS facilities, tribal-administered services and urban Indian facilities. Together, they serve approximately 2.6 million Indigenous people. Past efforts to address the underfunding problem have fallen short. Members of Congress have twice proposed transforming IHS funding from discretionary to mandatory. Other ideas, such as creating a unique Medicaid program for individual tribes, have also failed to gain support.

"Since the late 18^th century, the United States has had a trust responsibility to provide care in exchange for tribal lands," said study co-author Rashmi Jaggad, MPH, MDS, research project coordinator in the OU Hudson College of Public Health. "But when funding is low, health care access decreases. If people cannot afford services in private care, they often must go without. That is the problem we are seeking to solve."

Zhao and her team have a long history of conducting research involving underserved populations. Their work is at the heart of public health, said Dale Bratzler, D.O., MPH, dean of the OU Hudson College of Public Health.

"At the OU Hudson College of Public Health, we are committed to research that addresses real-world inequities and improves the health of all communities," Bratzler said. "This work reflects that mission by offering a creative, evidence-based solution to a longstanding issue that has impacted Indigenous people for generations."