Making Sense of Sweeping Cuts at HHS

Julie Rovner (JR): Good morning.

Dan Gorenstein (DG): Hi. Good morning.

JR: I’m reading about the layoffs literally that are happening literally as we speak.

DG: When the Trump administration said last week that it was firing 10,000 people and massively reorganizing the federal Department of Health and Human Services, I knew who I needed to call.

JR: I’m Julie Rovner. I am Chief Washington Correspondent for KFF Health News.

DG: Julie is the dean of health care journalists in Washington D.C. 

JR: Ronald Regan was president when I started covering this.

DG: She’s also a proud corgi mom, so you may hear some dog noises in the background. 

JR: Excuse me. Dog, other room.

DG: When we got on the phone Tuesday morning, the first Reduction in Force or “RIF” notices had just been sent out.

JR: This is from the STAT story that, bless their hearts, is doing this in real time:

It said, “At the FDA’s campus in Silver Spring, Md., security guards turned away employees whose badges had stopped working. Some had not seen the RIF notice, sent around 5 a.m., before leaving for work in the morning. Security instructed employees to form a line, two agency sources told STAT, in order to later clean out their offices.”

So, happy April Fool’s Day at the Department of Health and Human Services.

DG: Except there’s no joke.

JR: Right, not a joke.

DG: It’s been one week since HHS Secretary Robert F. Kennedy Jr. announced that the $1.7 trillion department would cut nearly a quarter of its staff, close half of its regional offices, and reorganize dozens of federal health agencies. 

Kennedy: As part of President Trump’s DOGE workforce reduction initiative, we’re going to streamline HHS to make our agency more efficient and more effective. We’re going to imbue the agency with a clear sense of mission to radically improve the health of Americans and to improve agency morale.

DG: Kennedy says along with folks who have already left or been laid off, HHS’ full-time staff will shrink from 82,000 to 62,000. The administration projects those cuts will save the department $1.8 billion a year while maintaining essential health services like Medicare and Medicaid.

Kennedy: I want to promise you now that we’re going to do more with less. No American is going to be left behind.

DG: Critics see it differently.

Sen. Ed Markey: Today’s announcement…

Former HHS Secretary Donna Shalala: Cutting a quarter of the workforce…

Markey:…is a catastrophe

Sen. Patty Murray: That is about as good for the public health as a cough in the face.

Shalala: It makes no sense.

Former CDC Director Tom Frieden: This is good news for cancer cells, it’s really bad news for the rest of us.

DG: It will take months — in some cases years — to understand the full impact of these changes. But in these early days, we want to help you make sense of what’s happening and what to watch for as this unfolds. Today, we sit down with one of the country’s most knowledgeable health care journalists to offer some perspective and answer your questions about what comes next.

From the studio at the Leonard Davis Institute at the University of Pennsylvania, I’m Dan Gorenstein. This is Tradeoffs.

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DG: We recorded this conversation with Julie at 9 a.m. ET on Tuesday, April 1. We’ve learned a lot more about the specifics of the cuts since then, and we have links to ongoing coverage on our website tradeoffs.org. 

So, Julie, at the start of this conversation, you said this is your 40th year covering HHS. I’ve been covering HHS for about 10, 15 years now. You’re firing 10,000 people. Another 10,000 people were being let go or forced out or what have you. 20,000 people gone. You’re shuttering agencies, merging others. This feels big. This feels unprecedented. How big of a deal is this, do you think?

JR: I think it will be a big deal. I think they’re taking a sledgehammer to this agency, and I think it’s on purpose. I think it’s going to be extremely difficult to put it back together. Many of these jobs are jobs that are being done by the government because there’s no profit motive in them. HHS is the department that basically takes care of the nation’s sickest and most vulnerable people.

People I think don’t have a real feel for how far HHS reaches. It’s not just the NIH and the CDC and the FDA. It is Meals on Wheels for seniors. It’s a lot of things that people encounter in their daily life that they don’t realize the money is coming from the federal government. Community health centers where millions of people get their primary health care.

DG: And so you’re alluding to this. There are some big cuts here at major agencies FDA, CDC. They’re both set to lose about a fifth of their staff. Former Clinton HHS Secretary Donna Shalala talked about this on NPR earlier this week.

Shalala: Slowing down the progress that FDA will make on the approval of drugs, slowing down and eliminating what drives our economy, and that is the scientific research and our deep investments in the NIH.

DG: Julie, those are the cuts that have made the headlines. You were starting to talk about some of these more under the radar agencies that are being shuttered, the Office of Minority Health, the Office of Infectious Disease and HIV AIDS policy, the Administration for Community Living, which helps ensure care for people with disabilities. Can you be specific when you talk about the impact on people and how these sort of obscure changes in Washington will actually trickle out and touch people’s lives? 

JR: Well, actually, a lot of this has happened because in addition to all of these staff cuts, this administration is clawing back money, which I need to point out is completely illegal. The administration is not allowed to decide what money it spends and what money it doesn’t. And yet, this administration is clawing back billions of dollars that have been appropriated by Congress. I will give you a today-example. 

Clip: The Trump administration withholding federal funding from Planned Parenthood in Indiana. Nine affiliates nationwide will no longer receive Title X funding.

Clip: It’s funding that allows family planning providers to help low-income families prepare for parenthood.

JR: This is where people go to get basic health care, not just contraception, but screening for sexually transmitted diseases, some basic primary care, some cancer screenings. The other thing, and I think this is really important, is that we are crippling the future workforce. At this point, we’re seeing not just labs having to lay off staff. We’re seeing universities canceling acceptances for graduate students. We’re basically telling an entire generation of people, you should find a different line of work.

DG: Kennedy has said most of these cuts will be around IT, comms, procurement and are not going to affect the core health care services at HHS. Here’s a quick quote from him on NewsNation last week.

Kennedy: We’re not cutting scientists. We’re not cutting frontline workers. We’re cutting administrators, and we’re consolidating the agency to make it more efficient.

DG: Julie, are there 10,000 IT folks and comms people at HHS to cut? It’s a little hard to believe that there are 10,000 people you could cut and not affect people’s health care. Is that your sense?

JR: Yes. But also, I mean, we objectively know this is not true because we’ve seen a lot of high level scientists quit, be fired in that sort of big swath of probationary workers that were let go.

Yes, they could get rid of a lot of redundancy in IT and comms and procurement. On the other hand, a lot of these agencies are located in different parts of the country. So, yes, IT people can, remote in, but often it’s helpful to have IT people physically where you are, particularly when they’re ordering everybody back to work.

DG: I’ve known you for years. I’m listening to your voice. You are often animated, excited. But there’s something in your voice today that’s different. What is it?

JR: I really do feel like the purpose here is not to make things better. It’s to break it. It’s to basically break it so that it can’t be put back together. And I have never seen that in my, you know, not just in my 40 years of covering HHS, but in my lifetime. I’ve never seen an attempt to take something that is so part of what I consider the American fabric and just smash it to smithereens and say, here, you try to put it back together. And I really fear that we will not. Or that if we do put it back together, it will take billions more dollars and many more years.

We have so improved Americans’ health just in the 40 years that I’ve been doing this. I mean, we’ve basically made cancer from a death sentence into a chronic disease. We can prevent HIV. We found a vaccine for COVID in less than two years.

Can HHS be better? Of course. Is it probably redundant in a lot of ways? Sure it is. But is there a reason to just break it all and make it impossible to put back together? I honestly don’t know what that would be.

DG: When we come back, Julie answers your questions about what these cuts may mean for health policy and care in America.

MIDROLL

DG: Welcome back. We’re talking with KFF Health News Chief Washington Correspondent Julie Rovner about the recent announcement of major cuts and reorganization at the federal Department of Health and Human Services. HHS has a budget of about $1.7 trillion, before this administration, about 82,000 employees.

Julie, we asked our listeners for their questions, and I want to talk through a few of them with you. Let’s start with hospitals.

Carlos: Hey folks at Tradeoffs. My name is Carlos Enrique. I am in New York. Will federal agencies be less able to support local providers because of these personnel changes? And should we expect hospitals and clinics to have to cut their own personnel due to lack of support at the federal level? Any answers, any insight would be so appreciated.

DG: Hospitals obviously rely on HHS for much of their revenue through Medicare and Medicaid, as well as regulations they have to follow. Julie, what should hospitals and other health care providers be watching for or worried about as this all starts?

JR: Well, some hospitals are thinking, gee, maybe there’ll be less enforcement of some of these rules and maybe we can get away with more than we have before. You know, if you cut half of the regional offices, that’s where a lot of these inspections take place. So there’s this sort of perverse, might not be great for the patients, but might be okay for the hospitals.

As I mentioned, the department is clawing back money that’s either been already promised or, in some cases, already granted. Some family planning clinics, community health centers, some of these clinics are likely to see cuts fairly soon.

Hospitals might take a little bit longer. But again, it looks like the Centers for Medicare and Medicaid Services is going to get cut less than some of the other agencies at HHS. I think that may be part of the president’s promise not to touch Medicare. We don’t know what Congress is going to do to Medicaid. A lot of these things are sort of still to be seen.

DG: We had multiple questions about how these changes will affect research at HHS.

Shooshan: Hi, this is Shooshan Danagoolian. I am an associate professor of economics at Wayne State University in Detroit. Will the federal government continue collecting, analyzing, and disseminating information about quality of care, disparities in care, and trends in care?

DG: One of the changes Secretary Kennedy wants to make is to combine HHS’ two main research agencies — the Office of the Assistant Secretary for Planning and Evaluation and the Agency for Healthcare Research and Quality — into a new Office of Strategy, as you know, Julie. What role do these agencies play in health policy research, and what are you watching for as HHS reorganizes these two particular offices?

JR: Well, they do very different things. ASPE, the Assistant Secretary for Planning and Evaluation, evaluates how federal programs are working, how HHS programs are working. That’s literally its job. AHRQ, on the other hand, was created in the 1990s to look specifically at the quality of care that’s given in the community. In fact, it’s the only federal agency that looks at patient safety and the quality of care. Those are big, big issues.

Could you put them in the same office? I suppose you could. They’re both doing quote unquote research, but they’re doing different kinds of research. I know that I’ve been getting a lot of emails from people at AHRQ who are very worried about the future. Again, a small agency, but with a big impact and that was created really in the wake of discovering that we spend tons and tons of money on health care that doesn’t help anybody. 

This is the type of thing that the federal government can do. And again, it was created with bipartisan support. Will there be an AHRQ at the end of all of this? We don’t know yet.

DG: And so if the missions of these two offices end up being watered down, at the highest level, what’s going to be lost?

JR: Well, the ability to look ahead and to look behind. Like who’s getting care, what kind of care they’re getting, how much it costs — those are all really important if you’re going to try to have some kind of a logical health care system that doesn’t spend tons and tons and tons of money that it doesn’t need to spend, that they say is their goal, remember?

DG: The last listener question I want to get to is about the impact this may have on states.

Willie: Hi I’m Willie from Massachusetts. And my question is, will this restructuring at HHS set back progress in building better cross-agency data systems that states need for coordinating care and improving outcomes? Could a leaner HHS mean slower or less responsive support for states? Thank you.

DG: Julie, states, of course, rely on HHS for a lot, from data to grants to implementing innovative new policies. Do you think these cuts will hurt states? 

JR: Well, we haven’t seen what Congress may or may not do with Medicaid. That would be obviously the biggest and most immediate impact. But they’re clawing back money that was promised to states. Last week, there was $11 billion in funding for local health departments while they’re fighting a measles epidemic. So we are already starting to see this. 

Based on this reorganization, I think a lot of the closing and consolidating of regional offices is going to make it more difficult for states to interact with the federal government. It’s going to affect things like inspections of hospitals and nursing homes and other facilities. It is distressing.

DG: Final question. It’s from me. One of the first things you told me when I first became a health care reporter, this was back in 2012, and I met you down in Washington, D.C., you made a point that lots of people in health care really do care about the public’s welfare. Do you still feel that way?

JR: I do, even more so. I talk to a lot of students, medical students, undergrad students. My heart is warmed by the number of people who are interested in health policy and want to make the nation’s health system better. And I would like to think that deep down, RFK Jr wants to do that, too. This is a calling. And it’s not just a calling for medical professionals. It’s a calling for everybody who works in health care.

Health care is a mess. It’s been a mess. We don’t have much of a system. We fight over it. There’s a lot of money. There’s a lot of waste. I find it endlessly interesting, which is why I’ve done it for 40 years, but we have to come out the other side because we’re not going to have any choice but to come out the other side.

DG: Because health care, at the end of the day, touches each and every one of us. Julie, I just want to thank you for taking the time to talk to us on Tradeoffs. As I said to our producer, Ryan Levi, your breadth of knowledge, your passion, your care is truly a national treasure.

JR: Thank you.

DG: You can hear more of Julie’s reporting every Thursday on her podcast  “What the Health” from KFF Health News.

And we’ll have more here on Tradeoffs next week on the far-reaching impact that RFK Jr. has had on the country’s immunization programs, and some of the other major policy and budget decisions from his first two months on the job.

You can subscribe and find all of our coverage at tradeoffs.org.

I’m Dan Gorenstein, this is Tradeoffs.