PRIORITY SETTING THROUGH THE BUDGET PROCESS

The actual dollar amount allocated to NIH is the result of a complex process of negotiations among OMB, DHHS, the NIH director, and Congress. Because of NIH's commitments to infrastructure and multiyear grants (its commitment base), each year it can realign only a fraction of its budget.¹ More specifically, the NIH director can set new priorities only with additional funds received beyond the commitment base.

Historically, an expansion of research in one area has resulted in a decrease in another area. Only in times of real growth have significant realignments been made. A further constraint on change comes from the fact that each of the institutes receives a separate appropriation from Congress, as do the Office of the Director, the Office of AIDS Research, and buildings and facilities. Budgets are put together from the bottom up (from the institutes and centers and through the NIH director) and are reconciled with budget limits and programmatic priorities imposed at higher levels within NIH, DHHS, and OMB in a long, complex, and interactive process. The institute budget proposals are negotiated with DHHS and OMB through the NIH director, who submits an NIH budget overview to the appropriations committees along with the individual institutes' budgets and, most importantly, works with the appropriations committees on how to distribute any budget increases. The director of NIH plays an important role in deciding how much each institute can ask for within the budget total imposed by DHHS and OMB and can, in this way, affect allocations.

Although Congress looks to the director for advice on how to allocate any budget increases that it might give to NIH, the director is limited in this exchange by the requirement to adhere to the budget and priorities set forth by the administration (via NIH negotiations with DHHS and OMB). Thus, the NIH director is unable to communicate directly to Congress, early in the budget process, his or her independent judgment regarding the best use of NIH funds in the coming year.² One outcome of this process is that the NIH director at times has been found to be in the position of defending a budget request that is lower than the congressional mark or that reflects priorities that differ from those of Congress and perhaps even those of NIH itself (for example, if a special research directive was issued by DHHS or the White House).³ Thus, the NIH director probably has the greatest, albeit limited, influence on NIH priority setting during the annual budget process. After the budget is passed, the appropriations are made directly to each institute, which then controls the use of the funds.

Aside from the budget process, which provides little opportunity for radical priority setting, the institutes have two broad opportunities for creating priorities: deciding (1) which grant applications to support through the peer-review process⁴ and (2) which research topics to authorize as part of their portfolio. The former opportunity is largely not within each institute's control, whereas the latter is decided through an iterative process involving the NIH director, the institute directors, and the various constituencies served by NIH and its research portfolio. The processes used to accomplish each of those goals are quite different.

NIH DIRECTOR'S ROLE IN PRIORITY SETTING

The relative authority of the NIH director has long been a subject of debate and discussion, with many analysts calling for greater influence and centralization. In 1984 IOM wrote, "the Office of the Director is the logical locus for a central coordination activity at NIH" (Institute of Medicine, 1984). Historically, the authority of the director has been limited largely by the size and complexity of the NIH organization and by its budget process. More recently, in 1991, the director's authority was expanded in two specific areas: (1) the director was given the ability to transfer up to 1 percent of funds across institute lines, and (2) the director was given a discretionary fund with which to seed selected areas of research. ⁵ In addition, the director has played a more active role in priority setting by requiring the institute directors to receive part of their budget increases through an initiative called the NIH Areas of Research Emphasis (described below).

With a unique NIH-wide perspective and ultimate responsibility, the NIH director looks at each institute's programs "with particular emphasis on needs and opportunities for crosscutting efforts" (U.S. House of Representatives, 1997a:73-76). The director accomplishes this through a system of regular senior staff meetings with deputy directors for intramural and extramural research and associate directors for science policy, legislative affairs, and communications and through feedback from interest groups and briefing sessions with institute directors. In addition, the Office of the Director has acquired a number of offices to advise the director of needs and opportunities and to coordinate NIH activities in various areas of concern, for example, rare diseases, alternative medicine, women's health, minority health, and behavioral and social research.

The NIH director oversees 15 offices with a combined budget of $201 million in FY 1998. Roughly one-fourth of this budget supports the operations of the Office of the Director; the remainder supports special functions, such as the Office of Women's Health and the Office of Alternative Medicine. An issue of considerable concern to the Office of the Director in recent years has been the congressional requirement that NIH hold its annual increase in research management and support levels to 1 percent. This has restricted the ability of NIH to engage in more planning and evaluation of programs since those activities are funded through that mechanism.

PRIORITY SETTING AT THE INSTITUTE LEVEL

Although the NIH director can influence priority setting through participation in the annual budget process, the use of blue ribbon panels to recommend new or reorganized programs, and the use of budgetary authority to launch crosscutting areas of research emphasis, the levels of funding for most of the budget, and therefore the research allocations, are determined at the institute level. NIH is a very large, complex, and decentralized enterprise in which most programming and budgeting activities come from the bottom up.

During its deliberations, the IOM committee received descriptions of each institute's priority-setting process. They reveal widely varying priority-setting processes. Some such variation is appropriate, because the institutes vary in their missions, histories, leadership, sizes, and complexities. Some institutes have more formalized planning and budgeting processes, which tend to be more easily understood by (i.e., transparent to) external constituencies. Some institutes routinely incorporate a wider range of external views, including the views of patients and their advocates.

Some institutes, such as the National Eye Institute, have a long-standing formal planning process for setting priorities. Others, such as NCI, have engaged in an elaborate set of activities to review its programs and progress and have expanded input from consumer advocates. For example, NCI relies on advisory committees (called working groups or review groups) in its priority-setting and planning process, with a mix of members including intramural and extramural researchers, NCI and other federal officials, consumer and patient advocates, and representatives of professional societies and organizations. Still others employ rigorous and well-structured internal and external planning reviews. For example, to review its priorities the National Institute of Allergy and Infectious Diseases (NIAID) engages in twice-annual retreats involving representatives of the scientific community and the public (see Box 3-1 for an example).

BOX 3-1

The Priority-Setting Process at NIAID. The National Institute of Allergy and Infectious Diseases (NIAID) planning process is organized around two major, institute-wide planning meetings that engage the institute director, scientific program head, and (more...)

Each institute also has a national advisory council, the makeup of which is usually determined in the enabling language that created the institute. The national advisory councils review and approve all grants and provide policy advice to the institute director. In most cases, there are 18 members: 12 scientists, chosen for their research expertise, and 6 nonscientists (usually physicians and other professionals rather than representatives of patient groups or groups with special health problems).

Each institute also has a Board of Scientific Counselors, which provides advice on and reviews the intramural research program, and a Board of Scientific Advisors, which provides advice on the extramural programs. Institute directors often form working groups and ad hoc panels to help them address key issues in their research programs. Many institutes have offices for consumer issues. The institutes frequently engage in program reviews or progress reviews to determine if the institute is investing in the appropriate areas of research. NIH has 141 chartered advisory committees (see Appendix A) and makes use of numerous ad hoc advisory committees.

In summary, the institutes have varied systems for receiving advice, planning, and setting priorities. However, there is tremendous variability in the levels of diversity and activism of these activities and in the specificities, scopes, and time frames of the plans developed. For example, some institutes appear to adopt plans developed by a proactive staff with the endorsement of advisory groups, whereas others follow closely the recommendations of external advisory groups.

CONCLUSIONS AND RECOMMENDATIONS

Priority setting is decentralized at NIH, which is appropriate for a research organization in which those closest to a problem are in the best position to decide on approaches and in which expertise is highly specialized. The priority-setting processes also vary from institute to institute and from area to area within institutes. Some such variation is appropriate, because the institutes vary in their missions, histories, leadership, sizes, and complexities. The committee did find that some institutes and programs have priority-setting processes that incorporate a broader range of inputs and views, including those of nonresearchers and nonclinicians.

More recently, NIH has been making decisions on priorities and funding allocations that are more centralized than in the past; that is, NIH is looking across traditionally independent institutes and centers and focusing on certain crosscutting needs and opportunities where joint or unified action is desirable. This trend stems from the growing realization that common biological processes underlie diseases that were previously seen as different or that important diseases and other health problems are more complex than was previously thought, affect more organs and processes than was previously realized, and happen to be addressed in more than one institute.

The committee concluded that the Office of the Director of NIH needs an increased capacity to analyze such crosscutting needs and opportunities and to interact with the public (the latter process-related issue is addressed separately in Chapter 4). Improvement requires a more central role for the NIH director and more uniformity in the data and analyses presented to the Office of the Director.

Recommendation 5. In exercising the overall authority to oversee and coordinate the priority-setting process, the NIH director should receive from the directors of all of the institutes and centers multiyear strategic plans, including budget scenarios, in a standard format on an annual basis.

In any organization, change toward centralization raises concerns about accountability. As the authority of the director is strengthened, greater accountability of the Office of the Director could be achieved through a strengthened ACD, one that is more actively engaged in the NIH priority-setting process.

Recommendation 6. The director of NIH should increase the involvement of the Advisory Committee to the Director in the priority-setting process. The diversity of the committee's membership should be increased, particularly with respect to its public members.

The charter of the current ACD gives it this responsibility. However, it meets infrequently and provides advice on matters that do not appear to be sufficient to fulfill this responsibility. Furthermore, although 5 of the 16 ACD slots are for nonscientists with ''wise understanding of and dedication to fulfillment of the Nation's needs" (White House, 1965), a review of ACD membership reveals that these reserved slots are not being filled with enough public members consisting of individuals from organized voluntary groups, individuals active in advocating for those with specific diseases or medical conditions, and members of organizations and individuals who represent population groups with special or disproportionate health problems. Not having more public members from these groups is a missed opportunity and has resulted in the perception of some groups that NIH does not encourage public input at the highest levels. The committee recommends that the director of NIH work more actively with the secretary of DHHS in appointing public members to ACD and in providing guidance to ACD on how it can work more effectively in an advisory capacity.

Footnotes

1

In addition, it is important to note that NIH has several mandated activities requiring collaboration with other federal agencies, such as the Centers for Disease Control and Prevention, the U.S. Food and Drug Administration, the Environmental Protection Agency, the U.S. Department of Defense, and NSF.

2

In contrast, by law, the NCI director can bypass DHHS and OMB in the budget process and go directly to Congress with a budget request that matches directly the professional judgment of NCI and its leadership regarding research needs and priorities. NCI is the only institute with this authority.

3

For this and other reasons, past reports have recommended that the NIH director report at least to a higher level—to the secretary of DHHS rather than the assistant secretary for health or to the president directly—if not directly to Congress. For example, in 1984 IOM recommended that "the Secretary of Health and Human Services should delegate to the Director of NIH the authority, direction, and control over NIH that the position does not now possess" (Institute of Medicine, 1984).

4

Peer review is the system used to help decide research funding among competing applications. Although it is not explicitly a system of priority setting, it does rank proposals within a research area in order of scientific impact or significance, which de facto determines the de facto priorities among problems and approaches in that area. The proposals are referred to an institute for funding, and the institute's national advisory council may fund lower-ranked proposals that would have greater relevance to the institute's mission. The NIH peer-review system is under extensive review and is not addressed further in this report.

5

Both authorities were recommended in a 1984 IOM report. In addition, the discretionary fund was recommended in a 1988 IOM analysis, Report of a Study: A Healthy NIH Intramural Program: Structural Change or Administrative Remedies? (Institute of Medicine, 1988).

6

The report went on to say that the council should not only be called on by the director of NIH "but it should be encouraged by the congressional committees concerned with NIH to participate in the annual budgetary hearings and in the formulation of the NIH programs."