President Clinton's fiscal 1996 budget would increase funding by $746.8 million for the Department of Veterans Affairs, the nation's largest healthcare system, to nearly $17 billion.
The administration request is up from the more than $16.2 billion enacted in the 1995 budget. That represents a 4.6% increase, three-tenths of a percentage point less than the medical inflation rate for calendar 1994 as calculated by the Labor Department.
The VA also has budgeted $496.1 million for construction of or renovation to medical facilities.
The medical-care budget includes a $108.4 million increase in expenditures because of the increasing numbers of veterans seeking care and a $208.4 million increase to pay for start-up and continuing expenses in new or expanded facilities.
The VA also expects $335 million in savings resulting from management improvements, including an initiative to decentralize control of VA medical facilities and to develop locally managed integrated service networks and a demographic-based prospective capitation system that will set network budgets.
Veterans groups lauded the administration's budget for the increase, although they questioned whether it would be enough. Four veterans groups develop an "independent budget" for the VA, which argues that the VA healthcare system needs $17.6 billion to maintain the services it provided in fiscal 1995.
"What (the VA's budget request) means is they will not be able to deliver the level of care they did last year," said Susan Edgerton, coordinator of the independent budget project.