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F I S C A L I M P A C T R E P O R T

SPONSOR Sharer

ORIGINAL DATE

LAST UPDATED

02/15/07

HB

SHORT TITLE

Preventive Health Pilot Program

SB 916

ANALYST Hanika Ortiz

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

$160.0

recurring

general fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to Appropriation in the General Appropriation Act

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Health (DOH)

SUMMARY

Synopsis of Bill

Senate Bill 916 appropriates $160 thousand from the General Fund to the DOH for a preventive

health pilot program in rural areas of northwest New Mexico that works to identify and improve

the health of persons who suffer from diabetes, heart disease, obesity or other preventable health

conditions.

FISCAL IMPLICATIONS

DOH reports that New Mexico spends an estimated $324 million annually on direct adult

medical expenditures (preventive, diagnostic and treatment services) attributed to obesity. Of

this, $51 million is spent within the Medicare population and $84 million is spent within the

Medicaid population (Finkelstein, et al., 2004). The business sector also bears significant costs

through lost work time, decreased productivity and health benefit costs.

The appropriation of $160 thousand contained in this bill is a recurring expense to the general

fund. Any unexpended or unencumbered balance remaining at the end of FY08 shall revert to the

general fund. Even though the appropriation is for a pilot program and assumed non-recurring;

the appropriation is actually recurring because with the successful completion of any pilot

Senate Bill 916 – Page

2

program there will be an expectation that the services provided continue. Also, DOH reports that

a single year of funding may be insufficient to see an impact on outcomes for the health issues in

the targeted population.

SB 916 is not part of the Governor’s Executive Budget request. Both the Executive and

Legislative recommendations contain $1 million from Tobacco Settlement Funds for diabetes

prevention and treatment. Of this amount, almost $700,000 is used to support contract services

and more than $150,000 is used to purchase medical supplies.

SIGNIFICANT ISSUES

DOH reports that approximately 1 in 11 adults or 130,000 New Mexicans have diabetes. In 2003,

Cibola, McKinley and San Juan counties had 17,440 adults with diabetes. Those with diabetes

are at risk for limb amputations, blindness, end-stage kidney disease and cardiovascular disease.

Children are at increasing risk for type II diabetes due to obesity, poor nutrition, and lack of

physical exercise.

DOH further reports that medical care and lost productivity for a person with diabetes averages

over $13,000 per year totaling in excess of $1 billion a year for the state. With diabetes on the

rise, especially among children, these costs are increasing. Over 50% of adults in New Mexico

are overweight or obese, putting them at risk for diabetes. A New England Journal of Medicine

study indicated that one out of seven cases of diabetes can be prevented in at-risk populations

through exercise and diet. This could potentially save New Mexico an estimated $128 million

every 3 years based on 11,997 cases of diabetes prevented.

Heart disease and stroke continue to be two of the leading causes of death and disability in NM.

In 2005, more New Mexicans (3,376) died from heart disease than any other cause, accounting

for 22.7% of all deaths; stroke was the fifth leading cause of death, responsible for 4.2% of

mortality (625 deaths). Heart disease and stroke caused the greatest number of deaths in New

Mexicans ages 65 years and older. Heart disease was also the second leading cause of death in

those 45 to 64 years old and the fourth leading cause in those 25-44 years old, representing an

unfortunate number of years of productive life lost.

PERFORMANCE IMPLICATIONS

DOH will be the administrator for this appropriation

ADMINISTRATIVE IMPLICATIONS

The bill is unclear how the pilot program will accomplish its goals as the area served is a very

large territory.

OTHER SUBSTANTIVE ISSUES

Adults living in New Mexico’s northwest region have statistically higher rates of obesity

(23.4%) than those living in Bernalillo County with a rate of 17.5%. Hispanic (62.5%) and

Native American (73.3%) adults have statistically higher rates of overweight and obesity than do

White, and non-Hispanic adults (51.3%) in New Mexico.

Senate Bill 916 – Page

3

Native Americans, Hispanics, African Americans, and rural communities are populations that

experience diabetes-related disparities. The counties in the Northwest are either rural or frontier.

Cibola, McKinley and San Juan have a larger percentage of Hispanics and Native Americans

than non-Hispanic Whites. American Indians are about 3 times more likely to have diagnosed

diabetes than non-Hispanic Whites. Hispanics, as well as African-Americans are about 2 times

more likely to have diagnosed diabetes than non-Hispanic Whites (Centers for Disease Control

and Prevention 2004). American Indians are approximately 3.5 times more likely to have an

amputation than non-Hispanic Whites (Health Policy Commission, NM Hospital Inpatient

Discharge Data, 2002; Santa Fe Indian Hospital data, 2001).

Data for men ages 35 and older from 1996-2000 show New Mexican Hispanics and American

Indians to have age-adjusted heart disease mortality rates that are 12% and 18% higher than their

respective national counterparts. Comparable data for women shows New Mexican Hispanics

having an 8% higher heart disease mortality rate. Stroke mortality data for men ages 35 and

older from 1991-98 demonstrates that Hispanics and American Indians in New Mexico have

age-adjusted rates that are 26% and 25% higher than these groups nationwide; the disparity is

even greater for New Mexican Hispanic women whose rates for dying from a stoke are 40%

higher than national rates.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL

No additional state funding will be available for a preventive health pilot program in rural areas

of northwest New Mexico that works to identify and improve the health of persons who suffer

from diabetes, heart disease, obesity or other preventable health conditions.

AHO/nt