Failure at one Indian Health Service hospital reveals a system in crisis


IHS funding crossroads

There’s a saying in Indian country: Don’t get sick after June, because there probably won’t be any money left to take care of you.

It’s not a new complaint. Warren Moorehead, a former board commissioner for the Bureau of Indian Affairs, described the pattern of neglect as early as 1914: “It is incomprehensible to me that appropriations for combating disease are so meager.”

The U.S. has a legal obligation to provide healthcare services to Native Americans. At the conclusion of the 19th century’s wars that led to forced relocations, the victorious federal government signed treaties with tribal nations that guaranteed healthcare to all their members. It created the IHS in 1955 to operate the facilities on or near Native American reservations to provide that care.

Today, the IHS oversees a national network of 45 hospitals and 617 health centers and clinics, which together employ more than 15,300 people, including more than 700 physicians. The U.S. has 5.4 million self-identified Native Americans and Alaska Natives, with 2.2 million in 567 federally recognized tribes eligible for care from the IHS. If any of those people go to an IHS facility, their care is 100% covered.

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Most IHS hospitals are located in rural areas. In Winnebago, residents have to travel 20 miles to larger, private hospitals for more expanded services.

Native Americans don’t see this as an entitlement, but rather as a treaty obligation. “This isn’t free,” said Vincent Bass, vice chairman of the Winnebago Tribal Council. “This is a form of payback, and it is minuscule to what is really owed to the Native Americans for what … was forcibly taken from us.”

Congress sets the budget for IHS every year, and the agency’s appropriations for all of 2016 totaled $4.8 billion. Third-party collections from Medicare, Medicaid and the VA brought the total budget to $6.2 billion. In Winnebago, the tiny hospital’s budget was $21 million in 2015, and 14% (about $3 million) was derived from billing third parties.

Since 2007, IHS’ appropriations budget has grown by about 3% annually after adjusting for inflation. That included a temporary boost in 2009 and 2010 from President Barack Obama’s stimulus bill, which routed an extra $500 million to IHS but was never replaced. The agency, along with the rest of the federal government, has seen its budget increases curtailed by sequestration cuts under the Balanced Budget Act of 2011.

As a result, the IHS spent only $3,700 per patient in 2015—far below per-patient spending in Medicare or Medicaid. It’s also far below what many Native American policy experts believe is adequate for their populations, who have inordinately high rates of suicide, diabetes, liver disease and other chronic health conditions.

“Underfunding of IHS has been a long-standing, multigenerational issue,” said Dr. Donald Warne, chairman of the public health department at North Dakota State University and a member of the Oglala Lakota tribe. It’s the same issue Warne discussed pointedly in a 2009 analysis piece in the Native American journal Wicazo Sa Review: “It is remarkable that we can spend $150 billion relatively quickly to send people $600 checks to stimulate the economy, or that we spend about $2 billion per week on the war in Iraq, but we cannot fulfill our trust responsibility as a nation and honor our treaties with the country’s first inhabitants with an additional $2 billion annually for IHS.”

Congress contends IHS has plenty of money, but it is wasted. “Funding and accountability need to go hand in hand at the Indian Health Service,” Mike Andrews, majority staff director for the Senate Indian Affairs Committee, said in a statement. “During our committee investigation, we found that no increase in funding will compensate for the need of a culture of change.”

However, people in and out of the IHS said the dearth of funding directly affects the quality of care. Some IHS hospitals, for instance, are more than 70 years old and lack basic medical equipment, according to an October report from HHS’ Office of Inspector General. The shortage of funds also makes it more difficult to attract well-trained, permanent doctors and clinicians.

“Staff at a Billings area facility told us that an optometrist position that was recently filled had been vacant for five years because four previous offers were declined due to inadequate pay,” the Government Accountability Office said in a report this past March that mentioned a Montana facility. “In addition, staff at this facility said that the facility is losing its family physicians because the IHS starting salary is about a third of what the competition can offer.”

In Winnebago, a psychiatrist visits once a week. An endocrinologist comes just three days a month to check on a town that has diabetes rates well above the national average. “It’s all we can afford,” said Mona Zuffante, the director of tribal health programs, who keeps an office inside the IHS hospital in Winnebago.

The IHS recently established a new pay scale for nurse anesthetists and received approval to increase salaries for emergency medicine physicians.

But Native American advocates still believe the agency is underfunded by about 50%.

No one in Congress is proposing to increase funding, and even if someone did, there’s little chance that it would survive on Capitol Hill. “We just don’t have the numbers,” said Jacque Gray, a Choctaw and Cherokee descendant and associate professor at the University of North Dakota’s Center for Rural Health.

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“Congress has never made full funding of IHS or living up to its treaty obligations a priority. Quite frankly, why would they help Indians? It doesn’t help them get re-elected … it’s institutionalized racism.” — Dr. Donald Warne, chairman of the public health department at North Dakota State University

Some experts believe the level of IHS funding reflects the impoverished communities the system serves. Nationwide, the average Native American household earns about $37,227, compared with the $53,657 average for the rest of the country. Roughly 28% of Native Americans live in poverty. Here in Winnebago, the median household income is $34,375, and 40% of people live in poverty, according to census data.

Many tribal members on the reservation don’t have private health insurance through employers due to high unemployment. Uptake in the Affordable Care Act’s insurance marketplaces was tenuous and now faces uncertainty as Donald Trump assumes the presidency. Nineteen states, including Nebraska, have refused to expand Medicaid coverage, a move that would have immediately helped thousands of Native Americans.

The Winnebago tribe has roots in Wisconsin with the Ho-Chunk Nation, dating back hundreds of years.

Those gaps in insurance, combined with stretched IHS funds, directly affect private hospitals near tribal communities that are obligated to treat Native Americans who are referred to them. A major component of IHS is the “purchased and referred care” program, or PRC, which makes up about one-fifth of the agency’s budget.

PRC dollars are used to pay non-IHS hospitals and doctors for care provided to Native American patients who rely on IHS. Mercy Medical Center and UnityPoint Health St. Luke’s are the main hospitals in Sioux City where Winnebago and Omaha tribe members go to if they need specialty care that can’t be delivered by IHS. Both hospitals declined in-person and telephone interviews.

UnityPoint St. Luke’s CEO Lynn Wold said in a statement that Native Americans represent 5% of its inpatient and 2% of its outpatient volumes, and it “proudly delivers quality healthcare to anyone and everyone who comes through our doors.”

Because so many tribes are located in rural areas, PRC funding is often reserved for emergency and complex procedures that need the expertise of specialty doctors. Preventive services such as colonoscopies aren’t a priority.

And because healthcare is expensive, PRC budgets almost always dry up before new appropriations roll in. If Native Americans are referred to private hospitals for necessary care but PRC dollars are gone—and the patients don’t have another form of insurance—the hospitals may not get paid from IHS.

One Omaha tribe patient sitting outside the hospital in Winnebago, an older man who declined to give his name, suffers from cataracts. He needs surgery that is outside the IHS hospital’s capabilities.

He is “shit out of luck,” he said. The man has Medicare, he said, but that alone won’t cover his treatment at a hospital in Sioux City. He can’t afford the out-of-pocket costs that Medicare doesn’t cover.

While members of the Omaha and Winnebago tribes know extra federal funds would help, they—like many on Capitol Hill—fear new money would continue to be mismanaged. Tribal members are convinced deeper, more meaningful change will only come with a top-to-bottom overhaul of agency leadership.

“You could throw all the money you want at IHS, and it probably won’t function any better,” Bass of the Winnebago Tribal Council said. “If they knew how to use this money appropriately, they could fix this problem themselves.”