Week Twelve 4/6-4/12: Healthcare Financing

According to Longest (2010), the President’s Office of Management and Budget develops a 5-10 year budget request for Congress. The annual budget request includes the President’s recommendations on how much funding should be appropriated to each “discretionary” program, a general overview of the U.S. budget, tax revenue, estimated deficit or surplus, and any suggested changes in funding mandatory programs or taxes (Longest, 2010). The discretionary budget for fiscal year 2016, which begins October 1, 2015 to September 30, 2016, was $1.168 trillion (Amadeo, n.d.). President Obama has recommended that Congress appropriate $79.9 billion to Health and Human Services (Amadeo, n.d.). Longest (2010) states that Congress takes the President’s suggestions into consideration and then direct the House and Senate to develop a budget resolution. The budget resolution then goes to the floor to be amended and hopefully passed by both House and Senate by April 15. The budget resolution also includes a “302(a) allocation” which determines the total amount of funding, or budget authority, for each of the 19 budget functions or federal spending categories. The House and Senate Appropriations Committees divide up the total amount of funding in 302(a) allocations to 302(b) allocations and then 12 subcommittees appropriate the money into specific programs (Longest, 2010). The 12 subcommittees must produce 12 Appropriation Bills by June 10 (Amadeo, n.d.). All 12 bills must be approved by the House and Senate by June 30 and submitted to the President for approval or veto before the fiscal year starts on October 1 (Amadeo, n.d.). If all Appropriation Bills are not passed by October 1, a continuing resolution may be passed by Congress or else there is a “government shutdown,” or closure of some federal programs (The Committee for a Responsible Federal Budget, 2014).

Arizona received $12.8 billion from federal funds in fiscal year 2014 and $16 billion from state funds (Ballotpedia, n.d.). Arizona’s Budget Process (n.d.) for General Appropriations to state agencies starts on July 1, 2015 to June 30, 2016 for fiscal year 2016. State agencies must have submitted their budget requests to the Governor’s Office of Strategic Planning (OSPB) by September 1, 2014. General Appropriations at the state level must also be passed by the House and Senate and signed by the Governor or pass with two-thirds vote in both the Senate and the House (Arizona’s Budget Process, n.d.). While other state programs suffer from budget cuts, the Arizona Medical Marijuana Program is self-funded and generates a surplus for the state. An estimated $112 million was generated in marijuana sales in 2013-2014 (Arizona Department of Health Services, 2014). Revenue is also generated from the dispensary application fee, renewal fee, patient ID registration fee, caregiver fee, dispensary agent fee, and sales tax (State Medical Marijuana Programs’ Financial Information, 2013). Expenses include salaries, wages, and benefits for employees, operating expenses, and capital equipment (State Medical Marijuana Programs’ Financial Information, 2013).


Amadeo, K. (n.d). Federal budget process. Retrieved from http://useconomy.about.com/od/fiscalpolicy/p/Who_budget.htm

Amadeo, K. (n.d.). Current US discretionary federal budget and spending. Retrieved from http://useconomy.about.com/od/usfederalbudget/p/Discretionary.htm

Arizona’s Budget Process. (n.d.). Retrieved from http://www.azleg.gov/jlbc/budgetprocess.pdf

Arizona Department of Health Services. (2014). Arizona medical marijuana act end of the year report. Retrieved from http://azdhs.gov/documents/preparedness/medical-marijuana/reports/2014/arizona-medical-marijuana-end-of-year-report-2014.pdf

Ballotpedia. (n.d.). Arizona State Budget and Finances. Retrieved from http://ballotpedia.org/Arizona_state_budget_and_finances

State Medical Marijuana Programs’ Financial Information (2013). Retrieved from http://www.mpp.org/assets/pdfs/library/State-Medical-Marijuana-Programs-Financial-Information.pdf

The Committee for a Responsible Federal Budget. (2014). Appropriations 101. Retrieved from http://crfb.org/document/appropriations-101


7 thoughts on “Week Twelve 4/6-4/12: Healthcare Financing

  1. Lynn,
    You always include a lot of interesting information in your blogs. Because Medical Marijuana is self funded program, it is one less thing to worry when planning for implementation. It is also interesting that medical marijuana generated 112 million last year. As this business is expected to grow more, I can see NPs getting opportunities to prescribe the same to accommodate the growing population of medical marijuana users.


  2. Lynn, thank you for this useful analysis. In light of your observation that medical marijuana is a self-funded program, how does this affect the issue of nurse practitioner prescribing? Does the fact that the program is self-funded increase the likelihood that NP prescribing would be adopted, since there could not be an argument that prescribing regulations would cost too much to amend? Or would the cost of changing the prescribing regulation be completely separate from the self-funding of the medical marijuana program? -HMR


  3. I am not surprised to read about how much money the marijuana business earns every year. Unknowing exactly how much of that money is profit, I believe it safe to assume a large portion. As people become more acquainted with the use and comfort of medical marijuana, sales and profits will surely increase. Quite frankly, I’d like to see marijuana replacing other medications such as narcotics and antianxiolytics. With that being said, I don’t believe persons dealing in substances – legalized or not – should reap a huge profit, while healthcare services and providers are taking a monetary hit as a result of the Triple aim and attempts to reduce cost of healthcare. Perhaps policymakers should take a stand and see that some of the profits of marijuana be funded back into the healthcare system in the form of taxation. Freedom in the United States comes at a cost. That cost is poverty – working or otherwise – to some while wealth to others. This is the issue – balance in the US.

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  4. Hello Lynn. I agree with Dr. Ross, that due to a surplus in revenue from medical marijuana, that policy makers could not argue that the costs of policy amendments allowing NPs to prescribe marijuana would be too high. Therefore in terms of money, do you see any negatives to policy amendment? I see possible increased costs related to treating the adverse effects of medical marijuana and/or addiction issues, but this is not directly related to an NP certifying ner marijuana patients.


  5. I couldn’t agree more with the last comment by marnibailey. The income generated from the marijuana business is an opportunity for policy makers to effect a change by making policies that would benefit the economy by taxing profits from the business. Not heavy taxes but a reasonable amount just as other businesses and pharmaceutical companies are taxed. Of course the marijuana business is and will continue to be heavily regulated to ensure the safety of the users of the medical end product. This could be part of the solution to financing healthcare in this country.


  6. I’m not saying I advocate for legalizing marijuana, I just wonder how much revenue the nation would generate if they legalize marijuana and tax the pants off of it. If 112 million was generated in one year for medical marijuana I could only imagine how much marijuana would generate for all purpose use. We might be able to put an end to our debt and generate more money for health care.


  7. This was a dizzying topic of healthcare finance this week! I agree that if the medical marijuana program has a surplus of revenue, why dosent the state move toward taxing the medical marijuana program at a high level. The states that have done this report that marijuana is their biggest crop responsible for millions in revenue each year. This seems like an easy way to get the states out of bankruptcy and debt. It is not clear as of yet what the societal and ethical dilemmas will be once something like this policy is adopted though.


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