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Making sense of the layoffs across HHS, and unpacking the Senate’s budget moves

April 3, 2025
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Washington Correspondent, D.C. Diagnosis Writer

Everyone please welcome our new Washington correspondent Daniel Payne. He's on X @_Daniel_Payne, on Signal at danielp.100, and his email is Daniel.Payne@statnews.com. My tip jar: John.Wilkerson@statnews.com or Signal at John_Wilkerson.07.

 

medicaid

Budget in limbo

Fear of a backlash from Medicaid cuts is one of the leading drivers behind Senate GOP efforts to lower the savings target in their budget bill to almost nothing. House Republicans, by contrast, are seeking at least $1.5 trillion in cuts.

A lot of wonky details are up in the air with long-term consequences for government spending, but the upshot is that Senate Republicans would like to set a minimum government-savings target of a few billion dollars, some of which could come from Medicaid. The House-passed budget resolution calls for at least $1.5 trillion in spending cuts, $880 billion of which would come from the committee that oversees Medicaid.

Annalyse Keller, a partner at the public relations firm Seven Letter, predicted that it will not be difficult to get Trump's support for the Senate approach.

"I do think that Trump understands the political challenges that would come with Medicaid," Keller said Monday on the podcast Control.


Drug pricing

PBM reprieve

After Trump fired two Democratic commissioners, the Federal Trade Commission had to delay a controversial lawsuit against drug middlemen, in part because there now are too few commissioners to hear the case, Ed Silverman reports.

Two Republican commissioners already had recused themselves from the lawsuit.

Although seemingly procedural, former FTC chair Lina Khan did not see it that way. The decision is "a gift to the PBMs," she wrote on the social media website X.


senate

Senate oversight of HHS layoffs

Senate health committee Chair Bill Cassidy (R-La.) scheduled an April 10 hearing on HHS layoffs, and HHS Secretary Robert F. Kennedy Jr. will testify, Lizzy Lawrence and Sarah Todd report

It's not clear whether Cassidy will use the hearing to challenge Kennedy's handling of immunization policy, to help Kennedy defend massive layoffs, or both. Kennedy has made life difficult for Cassidy by routinely testing the limits of what he can get away with on vaccine policy

Lobbyists say Cassidy should hold an oversight hearing to keep Kennedy in line. But the hearing isn't about vaccines, and Cassidy stressed that he wants to help the Trump administration tell its side of the story on Kennedy's HHS reorganization.

"This will be a good opportunity for him to set the record straight and speak to the goals, structure and benefits of the proposed reorganization," according to a Cassidy statement.



 

research

Layoffs severely impair data-driven research

The Trump administration has gutted two small federal agencies filled with researchers who study how the health care system functions and how to improve it, according to Tara Bannow and Bob Herman.

The Office of the Assistant Secretary for Planning and Evaluation had roughly 150 employees at the start of the year and now has fewer than 50. The layoffs at the Agency for Healthcare Research and Quality weren't quite as bad as DOGE had threatened, but they were still devastating. AHRQ started the year with over 300 employees, and Tuesday's cuts took out 111 of them. 

The two agencies were merged into an Office of Strategy, which is a staff division, not an operating division. That means that the research it does is tightly controlled by Kennedy, an HHS employee said.

The employee described the HHS/DOGE crew to me as "chaos agents." 

"Tell us to cut contracts, but first fire the people who could do that," the employee said. "Fire staff but get rid of our HR staff. Set up elaborate approval processes for every new public document but fire all the comms people. DOGE math makes about as much sense as dog math."

Read more from Tara and Bob on what several other former HHS employees had to say.


layoffs

Layoffs and the damage done

STAT reporters wrote several other stories about the layoffs and their implications across HHS agencies. 

Helen Branswell, Lizzy, Sarah Owermohle, and Andrew Joseph dove deep into an overview of the layoffs.

There's the account by Lizzy and Sarah Todd about how sweeping cuts pose a challenge to FDA Commissioner Marty Makary, and give him a chance to reshape the FDA.

Makary's first address to staff on Wednesday afternoon sounded a bit like an introduction to one of his books, Lizzy writes. But he said little about specific plans for his agency or about the layoffs.

Elaine Chen, Lizzy and Isabella Cueto explained how the shuttering of communications and FOIA operations runs counter to Kennedy's pledge of "radical transparency.

Usha Lee McFarling tells us that, for some reason, many employees, including top NIH officials, were offered the chance to transfer to the Indian Health Service.

Helen Branswell and Sarah Owermohle delved into broad CDC cuts that wiped out staff in tobacco control, reproductive health, injury prevention and more, reductions that former (and fired) officials say will severely weaken the agency. HHS's emergency-response unit was also hit with cuts amid the administration's efforts to merge it with CDC.

Rose Broderick tells us how the firings undermine the federal government's ability to care for vulnerable Americans.

Elizabeth Cooney wrote about the impacts on the local level, including vaccination clinics. 

Anil Oza reported that the entire staff that oversaw an annual survey to better understand infant and maternal health — that was considered the gold standard in the field — was placed on administrative leave.

Megan Molteni, Jonathan Wosen, and Jason Mast wrote about the impact on the NIH, including that directors of five institutes and at least two other members of senior leadership were placed on administrative leave or offered new assignments.


in appreciation

Out of office

It's become clear how many federal employees are, or were, reading our free newsletters, based on the bounced emails we've received over the past couple of months from employees whose email accounts have been shut down. Although they likely will not see this message, I'd like to thank them, and I hope they continue to read STAT from personal email accounts. 

My favorite out-of-office response: "HHS has terminated the NICHD office of communications. good luck."


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What we're reading

  • Use DOGE to deregulate methadone as addiction medicine, coalition urges Trump, STAT
  • Supreme Court sides with the FDA in its dispute over sweet-flavored vaping products, AP
  • A former HHS secretary's fears for America's future, STAT
  • FDA punts on major Covid-19 vaccine decision after ouster of top official, WSJ
  • The story of one woman who fell prey to the medical freedom movement, NYT

Thanks for reading! More next week,


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