Indian Health Service: Creating a Clitnate for Change "As an enrolled member of the Laguna Pueblo in New Mexico, I am a member of the Sun Clan and have the name of my great grandfather, Osara, meaning 'the sun'," Dr. Michael Trujillo told the United States Senate Committee on Indian Affairs in 1994 during his confirmation hearing as Director of the Indian Health Service (see Exhibit 7 /1). He told the committee that he had known the remoteness of Neah Bay at the northwest tip of Washington on the Makah reservation, lived in the Dakotas, and experienced the winters and geographic barriers to health care in Eagle Butte, Rosebud, and Twin Buttes. He had come before them, he also told them, "as the President's nominee for the Director of a national health care program that is essential to the well-being of 1.3 million American Indians and Alaska Natives belonging to more than 500 federally recognized tribes." Tiris case was written by Robert J. Tosatto, US Public Health Service; Terrie C. Reeves, University of Wisconsin, Milwaukee; W. Jack Duncan, University of Alabama at Birmingham; and Peter M. Ginter, University of Alabama at Birmingham. All quotes are taken from statements made before committees of Congress or the houses of Congress by the person quoted. Used with permission from Terrie Reeves. Copyright © by Robert J. Tosatto, Terrie C. Reeves, W. Jack Duncan, and Peter M. Ginter and the North American Case Research Association. Reprinted by per- mission from the Case Research Journal. All rights reserved. I I I I I I I I CASE 7: INDIAN HEALTH SERVICE Exhibit 7/1: Dr. Michael Trujillo: Chief Advocate for Indian Health Dr. Michael H. Trujillo was named Director of the Indian Health Service on April 9, 1994. His appointment was noteworthy for two reasons: (1) he was the first IHS Director appointed by the President of the United States and confirmed by the Senate; and (2) he was the first full-blooded American Indian to be appointed Director of the IHS. Dr. Trujillo was a member of the Sun Clan in the Laguna Pueblo in New Mexico. His parents were elementary school teachers for the Bureau of Indian Affairs and were active in the political life of the pueblo. His grandfather was a governor of the pueblo and was instrumental in drafting the first Laguna Pueblo constitution. From an early age, Dr. Trujillo had been taught and shown by example to feel an obligation to the Indian people. The first American Indian to graduate from the University of New Mexico School of Medicine, Dr. Trujillo received both his undergraduate ami medical degrees from that institution. Family practice and internal medicine were his specialties but he was also chosen for a clinical fellowship in pre- ventive medicine at the Mayo Clinic. In addition, he received an MPH in Public Health Administra- tion and Policy from the University of Minnesota School of Public Health. Dr. Trujillo had numerous assignments within th.

1. Indian Health Service:
Creating a Clitnate
for Change
"As an enrolled member of the Laguna Pueblo in New Mexico,
I am a member of the Sun Clan and have the name of my great
grandfather, Osara, meaning 'the sun'," Dr. Michael Trujillo
told the United States Senate Committee on Indian Affairs in
1994 during his confirmation hearing as Director of the Indian
Health Service (see Exhibit 7 /1). He told the committee that he
had known the remoteness of Neah Bay at the northwest tip of
Washington on the Makah reservation, lived in the Dakotas, and
experienced the winters and geographic barriers to health care
in
Eagle Butte, Rosebud, and Twin Buttes. He had come before
them,
he also told them, "as the President's nominee for the Director
of
a national health care program that is essential to the well-being
of 1.3 million American Indians and Alaska Natives belonging
to more than 500 federally recognized tribes."
Tiris case was written by Robert J. Tosatto, US Public Health
Service; Terrie C. Reeves,
University of Wisconsin, Milwaukee; W. Jack Duncan,
University of Alabama at
Birmingham; and Peter M. Ginter, University of Alabama at
Birmingham. All quotes
are taken from statements made before committees of Congress
or the houses

2. of Congress by the person quoted. Used with permission from
Terrie Reeves.
Copyright © by Robert J. Tosatto, Terrie C. Reeves, W. Jack
Duncan, and Peter
M. Ginter and the North American Case Research Association.
Reprinted by per-
mission from the Case Research Journal. All rights reserved.
I I
I I
I
I
I I
CASE 7: INDIAN HEALTH SERVICE
Exhibit 7/1: Dr. Michael Trujillo: Chief Advocate for Indian
Health
Dr. Michael H. Trujillo was named Director of the Indian
Health Service on April 9, 1994. His appointment
was noteworthy for two reasons: (1) he was the first IHS
Director appointed by the President of the
United States and confirmed by the Senate; and (2) he was the
first full-blooded American Indian to
be appointed Director of the IHS. Dr. Trujillo was a member of
the Sun Clan in the Laguna Pueblo
in New Mexico. His parents were elementary school teachers for
the Bureau of Indian Affairs and
were active in the political life of the pueblo. His grandfather
was a governor of the pueblo and was

3. instrumental in drafting the first Laguna Pueblo constitution.
From an early age, Dr. Trujillo had been
taught and shown by example to feel an obligation to the Indian
people.
The first American Indian to graduate from the University of
New Mexico School of Medicine,
Dr. Trujillo received both his undergraduate ami medical
degrees from that institution. Family practice
and internal medicine were his specialties but he was also
chosen for a clinical fellowship in pre-
ventive medicine at the Mayo Clinic. In addition, he received an
MPH in Public Health Administra-
tion and Policy from the University of Minnesota School of
Public Health.
Dr. Trujillo had numerous assignments within the IHS prior to
becoming Director. As an IHS physician,
he worked with many tribes in diverse locations. As an IHS
administrator, he was Deputy Area Director
and Chief Medical Officer for the Phoenix, Aberdeen, and
Portland areas, as well as a Clinical Specialty
Consultant to the Bemidji area. He initiated nationwide quality
assurance programs and a medical
provider recruitment program for urban Indian health centers.
Shortly after being sworn in as Director, Trujillo released his
vision for the Indian Health Service.
He envisioned a new IHS: one that adapted to the challenges it
faced, yet continued to be the best
primary care, rural health system in the world; one that
recognized the contributions and dedication
of employees, as well as the active participation of tribal
members; one that was redesigned to be
more effective, efficient, and accountable. Trujillo cautioned
that any change must be accomplished

4. in such a way that the Indian people noticed only improved
quality of care .
Trujillo's position as IHS Director allowed him to be a strong
advocate for Indians in all matters
regarding health. Not only did he want to improve IHS, but he
also wanted improvement for the
entire Indian health care system. IHS leadership and direction
would provide the course the agency
would take in making these improvements.
Three years later, Trujillo was in front of the same Committee
discussing the
fiscal year 1998 budget request for the Indian Health Service
(IHS). For the fourth
consecutive year, the IHS would receive no after-inflation
increase in its budget
allocation. But what Trujillo said in 1994 was still true: "We,
who are involved in
Indian health care, are facing a changing external environment
with new demands,
new needs, and a shifting political picture. The changing
internal environment
demands increased efficiency, effectiveness, and
accountability."
Dr. Trujillo knew that in order to accomplish the agency's
mission, IHS must
honor past treaties as well as respect the beliefs and spiritual
convictions of the
various tribes. The need to respect local traditions and beliefs
was formally recog- .
nized in Indian self-determination.
The Indian peoples had always managed with very scarce
resources. However,

5. Dr. Trujillo was concerned. IHS had not developed an adequate
third-party payor
billing system, it faced difficulty recruiting professional staff,
and it served a
population whose health status was below that of the rest of the
United States.
HISTORICAL PERSPECTIVE Jfii
IHS was considered a discretionary agency in the congressional
budget process.
Dr. Trujillo recognized the need to increase the health status of
IHS's population in
order to gain continued congressional funding and support. He
needed to answer
some difficult and complex questions. How could Indian self-
determination be
implemented? What should be IHS's role in the future? How
should IHS change
to best serve the self-determination of the Indian people?
Dr. Trujillo knew that his most difficult task was to provide
additional, much
needed health services to a growing and needy population when
there was little
prospect of increasing resources. Simultaneously, he had to
ensure that local
health needs were recognized and addressed.
In dian Self-Detennination
In January 1994, Dr. Trujillo told the same Conun1Uee that the
local tribes and com-
munities needed to be more involved in the decision-making

6. process to facilitate
Indian self-determination, the process by which the Indian
people may choose to
assume some degree of the administration and operation of their
health services.
The Indian Self-Determination and Education and Assistance
Act was passed
by Congress in 1975 and gave federally recognized tribes the
option of staffing,
managing, and operating the IHS programs in their
communities. Dr. Trujillo was
on record as fully supporting greater self-determination of all
tribes as a means of
enabling Indian people to operate their own health care systems.
He emphatically
stated that "During my tenure, there is going to be continued
emphasis through-
out the agency and in our interactions with other health partners
for complete
recognition of the Indian self-determination process."
Dr. Trujillo knew that self-determination was far from
complete. Although
IHS still had many important functions to fulfill, putting health
care back
into the hands of the tribes was proving to be difficult. Each
tribe had differ-
ent concepts of health, and it was difficult to accommodate such
variety in a
government agency. Moreover, in the face of scarce resources
there was always
an inclination to centralize rather than decentralize decision
making, and Dr.
Trujillo knew that if the IHS created the impression that it
could fulfill all
the needs of local communities, it would contribute to false

7. expectations and
disappointment.
Historical Perspective
IHS had a clear mandate: to provide high-quality health services
to American
Indians and Alaska Natives (AI/ANs). The basis for this
responsibility was establi-
shed and confirmed by numerous treaties, statutes, and
executive orders. The first
treaty between the US government and an American Indian tribe
was signed in
1784 and promised that the federal government would provide
physician services
to members of the Delaware Nation as partial payment for rights
and property
ceded to the United States. Treaties were signed with many
individual tribes and
CASE 7: INDIAN HEALTH SERVICE
periodic appropriations were made by Congress to control
specific diseases such
as smallpox and tuberculosis and to educate the tribes about
disease. Recurring
appropriations were not made until the Snyder Act of 1921,
which authorized
health care services for AI/ ANs by an act of Congress.
Health care for Native Americans was originally the
responsibility of the
Bureau of Indian Affairs; however the services provided were,
in general, very

8. poor. Despite the employment of field nurses, the building of
hospitals for Native
Americans, and the addition of dental services, the health status
of AI/ ANs
remained far behind that of the general population. For
example, Indian infant
mortality was more than double that of the general population
and life expectancy
for Indians was ten years less than that of the rest of the United
States.
The major health problems found in the Native American
population became
evident during World War II when thousands of Indians
volunteen•d for service
in the US anneu forces. The poor health of many Indian
volunteers was noted
during induction physical examinations. Citing the AI/ AN
health statistics, various
state, medical, and professional groups began a push to put the
US Public Health
Service (USPHS) in charge of health care for Native Americans.
They argued that
the Bureau of Indian Affairs could not run a quality health care
system because
health was only one of its many concerns. Years of debate and
political maneuver-
ing followed. Finally the IHS officially became a division of the
USPHS on July 1,
1955. The Transfer Act stated "that all functions,
responsibilities, authorities, and
duties relating to the maintenance and operation of hospital and
health facilities
for Indians, and the conservation of Indian health shall be
administered by the
Surgeon General of the United States Public Health Service."

9. Although the overall health status of AI/ ANs did not improve
immediately,
much progress appeared over the longer term. Since 1973,
infant mortality among
AI/ ANs had decreased 60 percent and death due to tuberculosis
dropped 80
percent. During the same period, life expectancy for AI/ ANs
increased by more
than 12 years; life expectancy for AI/ ANs was just 2.6 years
below that of the
general population in the early 1990s.
Over the years after the transfer, the IHS developed a model for
the provision
of high-quality, comprehensive health services. A major
component of this model
was the involvement of the tribes in the provision of health
services to their peo-
ple. This provisi<?n had a "snowballing" effect. As the health
status of their tribes
improved, more tribal members began to get involved in the
provision of health
care which, in turn, allowed the tribes to provide even more
services.
Congress followed up the Indian Self-Determination and
Educational AssistanGe
Act with the Indian Health Care Improvement Act in 1976 and
attempted to eleva~
the health status of AI/ ANs to a level equal to that of the
general population. This
Act gave IHS a larger budget, allowed expanded health services,
and prov:ided
for new and renovated medical facilities and construction of
safe drinking water

10. and sanitary disposal facilities. In addition, it established
scholarship and loan
payback programs to increase the number of Indian health
professionals. IHS ~as
elevated to agency status within the USPHS in 1988.This
reflected the impro~g
reputation of IHS as an institution, as well as the growth of
support for Indian
self-determination and the IHS mission. See Exhibits 7/2 and
7/3.
THE SERVICE POPULATION ffii
-Exhibit i!/2: Timeline of Key Events in IHS History
1784
1849
18805
1908
1921
1965
1976
1976
1988
199~
1995
1997
First treaty between the US government and an American Indian

11. tribe signed.
Bureau of Indian Affairs transferred from War Department to
Department of the Interior.
Physician services extended to Indians.
First federal hospital built for Indians.
Professional medical supervision of Indian health activities
established with position
of chief medical supervisor.
The Snyder Act authorized Indian health services by the federal
government (under
control of the Bureau of Indian Affairs).
The Indian Health Service officially became a division of the
United States Public
Health Service (USPHS).
Congress passed the Indian Self-Determination and Education
Assistance Act.
Congress passed the Indian Health Care Improvement Act.
IHS was elevated to agency status within the USPHS. IHS was
allowed to bill third-
party payors where applicable.
Dr. Michael Trujillo appointed as Director of the Indian Health
Service.
Preliminary recommendations of the Indian Health Design Team
(a task force composed
of Tribal leaders and IHS employees) published.

12. Final recommendations of the Indian Health Design Team
published.
Exhibit 7/3: IHS Mission
The mission of the Indian Health Service, in partnership with
American Indian and Alaska Native
people, is to raise their physical, mental, social, and spiritual
health to the highest level.
The Service Population: American Indians and Alaska Natives
Traditional AI/ AN beliefs concerning wellness, sickness, and
treatment were dif-
ferent than the modern public health approach or the medical
model. American
Indians' and Alaskan Natives' beliefs included close integration
within family,
clan, and tribe; harmony with the environment; and a continuing
circle of life-
birth, adolescence, adulthood, elder years, the passing-on, and
then rebirth.
Individual wellness was conceived of as the harmony and
balance among mind,
body, spirit, and the environment. Effective health services for
AI/ANs had to
integrate the philosophies of the tribes with those of the medical
community.
Of the more than 2.4 million AI/ANs in the United States,
approximately 1.4
million belonged to the 545 federally recognized Indian tribes.
All American Indian
tribes were sovereign nations. Therefore, AI/ ANs were citizens
of both their tribes
and of the United States. This meant that AI/ ANs had a unique

13. relationship with
the federal government. Based on the "treaty rights" established
between most tribes
and the United States, the federal government had a "trust
responsibility" to these
CASE 7: INDIAN HEALTH SERVICE
tribes that entitled the Indian people to services such as
education and health care.
However, because not all tribes signed treaties with the United
States, less than
two-thirds of all people with an Indian heritage were eligible to
participate in the
federal programs. Since October 1978, the Bureau of Indian
Affairs had received
215 letters of intent and petitions for federal recognition. Forty-
one of these peti-
tions have been resolved with 21"new" tribes being recognized.
The total number of AI/ ANs eligible for IHS services in 1997
was approximately
1.43 million and increased about 2.2 percent each year. Selected
demographics of
the service population are shown in Exhibits 7 I 4 through 7/10.
Tribal members
lived mainly on reservations and in rural communities in 34
states.
Exhibit 7/4: Service Population
Area
Aberdeen

14. Alaska
Albuquerque
Bemidji
Billings
California
Nashville
Navajo
Oklahoma
Phoenix
Portland
Tucson
All Areas
1990 (Census) Population
74,789
86,251
67,504
61,349
47,008
104,828
48,943
180,959
262,517
120,707
127,774
24,607
1,207,236
1997 (Estimated) Population
94,313

15. 103,713
78,851
79,930
55,630
119,976
73,042
215,232
297,888
140,969
148,791
27,612
1,435,947
Exhibit 7/5: Age Distribution (by percentage of total
population)
Cij ...
~c:
- 0 0 ·-...
Q) co
Cl-
co ::J ... a.
c: 0
Q)O..
0 ....
Q)
0..
25
20

16. 15
10
5
0
<1
Age Distribution
1-4 5-14 15-24 25-34 35-44 45-54 55-64 65-74 75-84 >85
Age in Years
1-- AllAN -- All Races - - - • White I
Source: Adapted from Trends in Indian Health 1996.
'b't 116· Median Household Income (1990 Census) Exh•' ~· ~---
------------------------------------------------------ $40,000
Q) $35,000
E
8 $30,000
c
~ $25,000
.c.
3l $20,000
:J
0
:X: $15,000
c

17. :.6 $10,000
Q)
~ $5,000
$0
Black AllAN Hispanic
Source: Adapted from Trends in Indian Health 1996.
White
Exbibit 7/7: Percent of Total Population Below Poverty Level
c 35
0
'+=i-
30 ro Ql
- >
:J Ql
c._. 25
~>
(ij ~ 20
... >
~~ 15
b ~
10 ... 0 c-
Ql Ql
ulll 5 ....
Ql
a..
White Asian Hispanic Black

18. Source: Adapted from Trends in Indian Health 1996.
Exhibit 7/8: Infant Mortality Rates
Ql
70 Infant Mortality Rate
> 60 :.J
0 50
0 Ill
q.c. 40
.... t::
30 ~in
c. 20
Q) ... -----
$36,784
Asian
31.6
AI/AN
ro 10 ------- -----------a:
0
1955 1975 1980 1985 1990 1992
Calendar Year
Source: Adapted from Trends in Indian Health 7996.
All Races

19. All Races
-AI/AN
--All Races
---White
CASE 7: INDIAN HEALTH SERVICE
Exhibit 7/9: Overall Measures of Health
Life Expectancy at Birth (Years)
Years of Productive Life Lost
(Rate per 1,000 population)
Age-adjusted Mortality Rate
(per 100,000 population)
AI/AN
73.5
83.0
598.1
Source: Adapted from Trends in Indian Health 1996.
All Races White
75.5 76.3
55.6 49.9

20. 513.7 486.8
Exhibit 7/10: Leading Causes of Death, Hospitalization, and
Outpatient Visits
leading Causes of Death
Heart Diseases
Accidents (Motor Vehicle and Other)
Chronic Liver Disease and Cirrhosis
Pneumonia and Influenza
Chronic Obstructive Pulmonary Diseases
leading Causes of Hospitalization
Obstetric Deliveries and Complications
of Pregnancy
Injury and Poisoning
Genitourinary System Diseases
Endocrine, Nutritional, and Metabolic Disorders
leading Causes of Outpatient Visits
Respiratory Diseases
Endocrine, Nutritional, and Metabolic Disorders
Musculoskeletal System Diseases
Complications of Pregnancy and Childbirth
Source: Adapted from Trends in Indian Health 1996.
Cancer
Diabetes Mellitus
Cerebrovascular Disease
Suicide
Homicide
Respiratory System Diseases
Digestive System Diseases

21. Circulatory System Diseases
Mental Disorders
Skin Diseases
Nervous System Diseases
Injury and Poisoning
Skin Diseases
Circulatory System Diseases
Similar to the nation's health care system, IHS operated in an
environment of
increasing health care costs, growing numbers of beneficiaries,
and excess demand
for services. The shift in disease patterns (from acute to chronic
diseases) and the
increasing elderly population played an important role in health
planning for
the lliS as well. As with the Veterans Administration, lliS was a
health care provider
within the US governmental system - though unlike the VA, the
IHS was no_t a
Cabinet department and had no voice in policy making at the
White House. unlike
any other health care system in the country, IHS was subject to
both the mandates
of Congress and the approval of more than 540 sovereign Indian
Nations.
t of
md
the
for
.der

22. )t a
like
ttes
IHS TODAY
IH S Today: A Key Con1ponent of the Indian Health Care
System
Health care for AI/ANs was delivered through a system of
interlocking pro-
grams. The system was composed of the IHS, the Tribal
Programs, and the Urban
Programs. IHS programs, called service units, were those
projects and facilities that
were directly staffed, operated, and administered by IHS
personnel. As of October
1995, there were 68 IHS-operated service units that
administered 38 hospitals and
112 health centers, school health centers, and health stations.
Tribal programs were
those developed through the process of Indian self-
determination. Administered
through 76 tribal-operated service units were 11 tribal program
hospitals and 372
health centers, school health centers, health stations, and Alaska
village clinics.
Urban programs were relatively new, but were expected to face
a future of brisk
demand because of the relocation of significant Indian
populations from reserva-
tions to urban settings. The urban programs ranged from
information referral and
community health services to comprehensive primary health
care services. As of
October 1995, there were 34 Indian-operated urban programs.

23. IHS headquarters and the IHS area offices had ties to the tribal
govern-
ments as well as to the Indian-operated urban projects. The
Indian and Alaskan
tribal governments had input into the decisions of IHS-operated
Service Units.
This interrelation between the federal government, tribal
governments, and
urban Indian groups was a key component of Indian health care
management.
Exhibit 7/11 shows various features of the Indian health care
system.
Exhibit 7/11: Elements of the Indian Health Care System
------
Indian and Alaskan
Tribal Governments
--
Service Units
Hospitals, Health Clinics,
and Extended Care Facilities
--
I
IHS Headquariters
---
- -_..,
IHS Area Offices

24. Service Units
Hospitals, Health Centers,
and Other Clinics
I
lndian-OJ!>erated
Urban Projects
Health Clinics, Outreach,
and Referral Facilities
Note: Solid lines reflect formal relationships; dashed lines (-----
) reflect important but less formal relation·ships.
Source: Adapted from Trends in Indian Health 1996.
CASE 7: INDIAN HEALTH SERVICE
Exhibit 7/12: Executive Branch Organizational Chart
Department of Health and
Human Services
• Office of the Secretary
• Administration for Children
and Families
• Administration on Aging
• Agency for Health Care
Policy and Research

25. (AHCPR)
• Agency for Toxic
Substances and Disease
Registry (AliSDR)
• Centers for Disease Control
and Prevention (CDC)
• Food and Drug
Administration (!'DA)
• Health Care Financing
Administration (HCF.A)
• Health Resources and
Services Administration
(HRSA)
• Indian Health Service
(IHS)
• National Institutes of Health
(NIId)
• Program SuppQrt Center
• Substance Abuse and
Mental Health Services
Administration (SAMHSA)
The President of the
United States
Department of the
Interior

26. • Bureau of Indian Affairs
Other Executive Branch
Departments
• Agriculture
• Commerce
• Defense
• Education
• Energy
• Housing and Urban
Qevelopment
• Justice
• Labor
• State
• Transportation
• Treasury
• Veterans Affairs
To further complicate the organizational structure, IHS was an
Operating
Division within the Department of Health and Human Services
(DHHS). Exhibit
7/12 shows the position of the IHS (in bold) on the
organizational chart of the
executive branch of the federal government.
Within IHS, the organizational structure consisted of three
levels: headquarters,
area offices, and service units. IHS headquarters, located in
Rockville, Maryland,

27. IHS TODAY
Source: IHS Homepage (www.ihs.gov).
was ultimately responsible for all policy, operations, and
management decisions.
The 12 area offices (see Exhibit 7 /13) represented geographical
regions and were
responsible for performing various roles in administrative and
program support
for the local service units.
Service units were composed of several types of facilities,
including hospitals,
health centers, health stations, and clinics. Depending on local
preferences and
circumstances, these service units could exist as single entities
or as combinations
of facilities. For example, the Fort Hall Service Unit in Idaho
included only a
single health center, whereas the Pine Ridge Service Unit in
South Dakota con-
sisted of a hospital in Pine Ridge, health centers in Kyle and
Wanblee, and small
health stations in Allen and Manderson.
IHS Programs and Initiatives
In many (but not in all) cases, IHS provided comprehensive
health care services
to eligible AI/ ANs. To be eligible for services, AI/ ANs had to
be members
of federally recognized tribes with whom the United States had
treaty agree-
ments. Services were provided through various programs and
initiatives admin-

28. istered by the IHS, covering a full range of preventive health,
behavioral health,
medical care, and environmental health engineering services.
The initiatives
focused on timely issues such as care of the elderly, women's
health, AIDS,
~ t
It'·' CASE 7: INDIAN HEALTH SERVICE
l;xhibit 7/14: IHS Programs and Initiatives
IHS Services and Programs
Preventive Health:
Prenatal and Postnatal Care
Well Baby Care
Immunizations
Family Planning Services
Women's Health Program
Nutrition Program
Health Education Program
Community Health Representative Program
Accident and Injury Reduction Program
Medical:
Inpatient Hospitalization
Outpatient Services
Emergency Services
Pharmacy Program
Laboratory Program
Nursing Program
Contract Health Services

29. Behavioral Health:
Mental Health Program
Social Services
Alcohol and Substance Abuse Program
Diabetes Program
IHS Initiatives:
AIDS Initiative
Traditional Medicine Initiative
Indian Youth Initiative
Maternal and Child Health Initiative
Sanitation Facilities Initiative
Indian Women's Health Initiative
Injury Prevention Initiative
Elder Care Initiative
Otitis Media Initiative
State Initiative
Environmental Health and Engineering:
Water and Waste Treatment
Food Protection
Environmental Safety and Planning
Pollution Control
Insect Control
Occupational Safety and Health
Facility Construction and Maintenance
traditional medicine practices, and injury prevention, as shown
in Exhibit 7/14.
However, in some locations, the IHS did not have the necessary
equipment or
facilities to provide comprehensive services. In these instances,
services which
were not readily accessible to AI/ ANs could be provided under
contracted health
services with local hospitals, state and local health agencies,

30. tribal health institu-
tions, and individual health care providers.
In its relatively short history, the IHS had contributed to
tremendous improve-
ments in the health status of its service population. Some of the
many reasons
for these status improvements included increased primary
medical care services,
sanitation facility construction, and community health education
programs. The
IHS was often instrumental in the infrastructure changes.
Exhibit 7/15 shows
some of the more impressive accomplishments of the IHS.
IHS Personnel
The Indian Health Service employed a workforce of
approximately 15,000 peo~Ie.
Of these, more than 62 percent were of American Indian or
Alaska NatiVe
Exhibit 7/15: Program Accomplishments
Percent Decrease in Selected Mortality Rates
(since 1972)
0 10 20 30 40 50 60
Source: Adapted from Trends in Indian Health 1996.
70
Exftibit 7/16: Percentage of Outpatient Visits by Type of

31. Provider
All Other Providers
Optometrist 3%
Clinic RN 4% •• iiiiJjiij
Nurse Practition
6%
14%
Pharmacist
15%
Source: Adapted from Trends in Indian Health 1996.
IHS TODAY
80
Physician
45%
heritage. IHS personnel consisted of nearly every discipline
involved in the provi-
sion of health, social, behavioral, and environmental health
services. The IHS
clinical staff was composed of primary care professionals and
other providers, as
well as clinical technicians and assistants. Primary care
providers included physi-
cians, physician assistants, dentists, nurse practitioners, and
nurse midwives. Other
providers included pharmacists, optometrists, public health

32. nurses, clinic nurses,
physical therapists, and dietitians (see Exhibit 7 /16). Over
several years, because
CASE 7: INDIAN HEALTH SERVICE
Exhibit 7/17: IHS Staffing Trends
14,000
12,392
12,000
(/)
Q)
Q) 10,000 >
0
a.
E 8,000
w -0 6,000 ....
Q)
.0
E 4,000 :J
z 2,806
2,000
742
Service Units Area Offices Headquarters
Source: Adapted from Trends in Indian Health 1996.
of the "Reinventing Government" initiative of the Ointon
Administration resulting

33. from a national preference for moving government decision
making closer to "the
people," as well as the IHS redesign process initiated by Dr.
Trujillo, the trend in
IHS staffing was towards an increase in personnel at the service
unit level and
decreases at the area and headquarters levels (see Exhibit 7
/17).
An ongoing personnel problem concerned the recruitment and
retention of
dedicated, qualified professionals. Most IHS sites were remote
and many lacked
adequate schools, stores, and amenities. To compensate for
some of these qual-
ity-of-life imbalances, IHS offered financial incentives in the
form of scholarships,
loan payback agreements, and summer employment to selected
health care profes-
sionals. For most professionals, however, the pay scales
continued to lag behind
those in the private sector.
Further exacerbating the personnel recruitment and retention
problems, many
employees were concerned about the changes that were
occurring within the
IHS. Federal employees at the service unit level wondered how
long they could
remain in their positions once the local tribes assumed
responsibility for health
services. Area and headquarters employees were concerned
about the futme of
their careers because there were so many cuts being made in
these programs. All
such issues concerning the organizational changes were

34. addressed often by IHS
leaders in memorandums, reports, and speeches. Information
technology resources,
particularly the Internet and electronic mail, were also used to
disseminate
information. Upper management felt that it was imperative to
keep the lines of
communication open and to involve IHS personnel at all levels
of the chan~
process, but the uncertainty could not be eliminated.
1987
1988
1989
1990
1991
1992
1993
1994
1995
IHS TODAY
7/18: Tribal Contract and Compact Funding (in millions of
dollars)
Contracts
$200.9
217.2
306.6
320.7
410.1
511.6

35. 491.5
648.1
297.5
Compacts
$9.8
13.1
23.5
27.4
40.1
50.9
59.9
114.5
335.0
Total
$210.7
230.3
330.1
348.1
450.2
562.5
551.4
762.6
632.5
Source: Adapted from Trends in Indian Health 1996.
The Indian Self-Determination and Education Assistance Act
gave federally
recognized tribes various options for their involvement in
staffing. The original
Act allowed tribes to contract with the federal government.

36. These contracting
tribes could redesign and assume responsibility for any aspect
of their health care
services. Some tribes made the choice to contract all of their
health care services.
A limitation of the contracting process was that IHS had to
approve and allow
all redesign proposals.
Amendments to the Act removed this limitation by creating the
Tribal Self-
Governance Demonstration Project. This project allowed
selected tribes to compact
their health care services; that is, they took over complete
responsibility without
the need for IHS approval or oversight. The project originally
called for 30 tribes
to be selected for inclusion, but by 1997 there were already 34
participating
tribes with several more anticipating their inclusion. The
number of tribes choosing
to deliver at least some portion of their own health care had
increased steadily.
Although contracts and compacts accounted for only an
estimated 22 percent of
the total IHS budget in 1987, these obligations grew to over 32
percent by 1995,
and were expected to reach 50 percent by 2000. Exhibit 7/18
shows the trend in
funding for tribal contracts and compacts.
lHS Funding
Sources of funding for IHS included appropriations from the
federal budget
and collections from third-party billing. Congress passed the

37. Indian Health Care
Amendments of 1988, which authorized the IHS to bill third
parties for both inpa-
tient and outpatient services. Medicaid, Medicare, and other
insurance payors were
all defined as third-party payors and these were considered the
only new revenue
source for IHS programs. IHS did not collect the co-payments
or deductibles that
were required with some policies, and those eligible individuals
who did not have
insurance coverage were not charged for the services they
received. Although
·------~-~·' ·-~-~--
Exhibit 7/19: Trend in IHS Budget Appropriations
IHS Budget (FV87-FY98)
Category FV 1987 FY 1988 FY 1989 FY 1990 FY 1991 FY 1992
FV 1993 FY 1994 FV 1995 FY 1996
Services:
Clinical" $748 $817 $883 $1,031 $1,235 $1,276 $1,252 $1,325
$1,370 $1,418
Preventive Health 66 70 73 78 90 65 70 75 77 78
Otherb 56 60 63 70 85 90 204 246 260 264
Total Services $869 $947 $1,019 $1,179 $1,410 $1.431 $1,526
$1,646 $1,707 $1,760
Facilities 71 62 62 72 166 274 334 297 253 239
Total Appropriations $940 $1,009 $1,081 $1,251 $1,576 $1,705

38. $1,860 $1,943 $1,960 $1,999
• All values are dollars ($) in millions.
• Other services include urban health, Indian health professions,
Tribal health management, direct operations, self-governance,
and contract
support costs.
Source: Adapted from Trends in Indian Health 1996.
FY 1997 FV 1998
$1,452 $1,468
81 82
274 285
$1,807 $1,835
248 287
$2,055 $2,122
IHS TODAY
collections from third-party payors were increasing, there were
still many concerns
over the inability of IHS to bill and collect adequately for all of
the services that it
provided. In fact, a 1995 review published by the Office of the
Inspector General
of the Department of Health and Human Services estimated that
the IHS under-
billed by about $8.5 million each quarter because of untrained
staff, shortage of

39. staff, or lack of controls.
Because the IHS was considered a discretionary program within
the confines
of the federal budget and because any attempts to balance the
federal budget
would involve cuts in discretionary programs, stakeholders of
IHS were very con-
cerned about the level of funding that the organization received
from the federal
government. The term "discretionary" referred to funds
controlled by the annual
appropriations process. This included most of the regular
operating funds for the
federal agencies, as well as funds for the thousands of large and
small programs
that have no binding legal obligations to their beneficiaries.
Estimates were made
that many IHS programs were underfunded by 30 to 40 percent,
although some
went as low as 70 percent below their level of need. Exhibits
7/19 and 7/20 show
the trends for these funding sources. The 1998 budget request
allowed no fund
increases to account for inflation, population growth, or newly
recognized tribes.
Exhibits 7/21 and 7/22 show the financial position of IHS for
fiscal year 1996 and
fiscal year 1997.
The shift from direct federal funding to state block grant
funding of health care
programs (such as a Medicaid managed care program) was
another great concern
of IHS and tribal leaders. It was a common occurrence for states
to overlook or

40. ignore Indian concerns when developing programs. Many state
governments
had the misconception that Indian tribes had relationships only
with the fed-
eral government and were not eligible for state resources, when
in fact AI/ ANs
were entitled to the same privileges and resources as any other
state citizen. In
response to these concerns, a state initiative workgroup was
created by the IHS
to focus on the social, economic, legal, and policy issues
pertaining to state health
reform initiatives and Indian health programs.
Also, a strategic business plan was being developed by a
workgroup composed
of tribal leaders, IHS personnel, and private sector consultants.
This plan would
focus on revenue generation, cost control, internal business
improvements, and
allocation of tribal shares. Although the business plan was still
in the develop-
ment stage, this committee represented the IHS commitment to a
new style of
Exhibit 7/20: Trend in Third-Party Collections
Category FY 1988 FV 1989 FV 1990 FY 1991 FV 1992 FY 1993
FV 1994 FV 1995 FY 1996
Medicare/Medicaid $66 $75 $88 $94 $122 $141 $160 $162 $177
Private Insurance 3.5 8 12 18 23 31 34
Total Collections $66 $75 $91.5 $102 $134 $159 $183 $193
$211

41. Note: All values are dollars ($) in millions.
Source: Adapted from Trends in Indian Health 1996.
CASE 7: INDIAN HEALTH SERVICE
Exhibit 7/21: Statement of Financial Position
Assets
Entity Assets:
Fund Balances with Treasury
Investments
Accounts Receivable, Net:
From Federal Agencies
From the Public
Interest Receivable
Advances:
To Federal Agencies
To the Public
Inventories
Property and Equipment. Net
Non-Entity Assets:
Accounts Receivable, Net:
Total Assets
liabilities
Funded Liabilities:

42. Payables:
Due Federal Agencies
Due the Public
Advances:
From Federal Agencies
From the Public
Accrued Payroll and Benefits
Unfunded Liabilities:
Annual Leave
Workers' Compensation Benefits
Other Liabilities
Pensions
Total Liabilities
Net Position
Unexpended Appropriations
Invested Capital
Cumulative Results of Operations
Future Funding Requirements
Total Net Position
Total Liabilities and Net Position
Source: DHHS website (http://WwW.hhs.gov).
1996
$1,172
19

43. 4
13
10
13
497
$1,728
$24
42
47
29
60
44
1
247
991
511
84
(105)
1,481
--
$1,728
(in millions}
1997

44. $1,108
6
16
40
15
647
$26
48
64
30
60
45
2
_m
954
662
48
(107)
~
1.521
$1.~-¥

45. 712 2: Statement of Operations and Changes in Net Position
ij;tnues and Financial Sources
Appropriated Capit~l _used:
General 1ppropnatJons
Matching Contributions
Employment ifaxes
SMI Premium Collected
Interest aevenue
Sales at Goods and Services
Imputed Financing
Other lilevenue and Financing
TOtal Revenue and Financing Sources
Expanses
Operating:
Personnel Costs
Travel and Transportation
Rent, Communications and Utilities
Printing and Reproduction
Contractual Services
Supplies and Materials
Grants
Insurance Claims and Indemnities
Other Operating Expenses
Depreciation and Amortization
Imputed Personnel Costs
Other Non-Operating Expenses
Total Expenses

46. Excess of Revenues and Financing Sources
Net Position, Beginning Balance
Adjustments
Net Position, Restated Beginning Balance
Excess of Revenues and Financing Sources
Non-Operating Changes
Net Position, Ending Balance
Source: DHHS website {http://www.hhs.gov).
1996
$1,991
310
$2,301
$745
46
43
2
738
80
516
81
24
$2,275

47. $26
$1,464
1,464
26
(9)
$1,481
IHS TODAY
(in millions)
1997
$2,135
415
71
$755
48
40
1
851
180
605
1
24
71
1

48. $2,577
$44
$1,481
178
1,659
44
(146)
$1,557
I I
I
I I
I I
I
I,
'I
I'
I I
1 I
I I
I
CASE 7: INDIAN HEALTH SERVICE

49. leadership, one that focused not only on the efficient and
effective use of resources,
but also on the partnership with the Indian people.
The Future of the IHS
Dr. Trujillo knew that the IHS was a very dynamic organization,
that it was staffed
by professional personnel, that the Alj AN populations were
unique, and that tribal
cultures, values, religions, and traditions must always be
considered and respected
when delivering health services to them. In addition, he knew
that the IHS was at a
crucial juncture in its existence. Stakeholders in Indian heallh
were calling for major
changes in the organization. Various economic changes were
signaling the need
for new and innovative ways to fund programs. Tribes were
asking for more control
over the health care for their members. At the same time that
the IHS was constrained
by treaties, it was also considered a discretionary agency of the
United States.
Dr. Trujillo was committed to Indian self-determination and
knew that the spirit
of self-determination required local assessment and definition
of health service
requirements. At the same time, he was responsible for
improving the health status
of the American Indians and Alaska Natives to the highest level
possible. Although
there was no inherent conflict between self-determination and
improvements in
health status of all the Indian peoples, in the face of scarce

50. resources Dr. Trujillo
knew there were limits to the services that could be provided to
any single commu-
nity. He needed to carefully manage the expectations created by
self-determination
while not discouraging local communities from becoming
involved in their own
health affairs. The creation of false expectations could be as
damaging as not
involving tribes in local health affairs. Balancing expectations
with local support
required some serious thinking about the future mission and role
of the IHS.
REFERENCES
Kendrick, T. (1997). A Future of Possibilities for Health, Indian
Health, and Indian Health Leaders. Available:
http:/ jwww.ihs.gov
Trujillo, M. H. (January 27, 1994). Confirmation Hearing
Statement Before the United States Senate Committee on
Indian Affairs. Available: http://www.ihs.gov
Trujillo, M. H. (May 11, 1995). Opening Statement Before the
Interior Subcommittee of the Senate Appropriations
Committee. Available: http://www.ihs.gov
Trujillo, M. H. (November 28, 1995). Time of Change ... Time
for Change: The State of the Indian Health
Service (presented at the National Indian Health Board 13th
Annual Consumer Conference). Available:
http://www.ihs.gov
Trujillo, M. H. (February 20, 1996). Challenges and Change:
The State of the Indian Health Service. A.Vi:lll<lV""~

51. http://www.ihs.gov
Trujillo, M. H. (December 1996). "Message From the Director:
Looking to the Future of the Indian
Service," IHS Primary Care Provider 21, no . 12, pp. 157-160.
Trujillo, M. H. (March 1997). The Future Indian Health Care
System. Available: http:jjwww.ihs.gov