What CFOs Can Do If HHS Layoffs Prevail

Funding for healthcare technology and medical research are on the table.

The Trump administration has proposed downsizing the Health and Human Services Department, and CFOs need to be prepared for the potential effects to their health system.

Downsizing HHS particularly through the technology department and the Agency for Healthcare Research and Quality (AHRQ), could negatively affect healthcare. The impact could stretch from the technology infrastructure supporting electronic health records (EHRs) to the pace and quality of medical research. CFOs will need to adopt proactive strategies to minimize these impacts for their health systems.

Cybersecurity, Safety & CMS

Health systems look to HHS for guidance through items such as the HITECH Act. HHS also oversees certification of electronic health records for health systems. Under the Biden administration the HHS technology department saw a revamp and push towards supporting greater artificial intelligence adoption and innovation. With potential workforce cuts here, AI innovation and guidance could be impeded.

Politico reported that the Trump administration has already “wiped the department’s strategic AI document from the web and dismiss[ed] newly hired senior staff in charge of data, technology, and AI policy.”

Without the work that HHS does to enhance cybersecurity measurements, health systems could be more at risk. With cybersecurity risks ballooning in recent years, the potential for a cyber incident could grow even bigger. With the increasing push for interoperability across health networks, delays in technological advancements could also impede the seamless exchange of patient information, undermining hospital workflows, increasing administrative costs, and jeopardizing patient outcomes. This is where data integrity comes into question. As HHS potentially scales back its technology workforce, there may be fewer resources available to support data analysis, quality control, and compliance with federal regulations.

HHS also plays a crucial role in medical device safety through the FDA, as well as the cybersecurity measurements for these devices. Workforce reductions here could affect patient safety when it comes to these devices.

Implications for CMS may also come into play. With looming Medicaid cuts, reimbursement and governance in this sector will likely also be hurt. This could affect reimbursement for health systems, stressing health system finances even more.

For CFOs: these disruptions could lead to increased costs for managing internal IT teams, addressing data quality issues, ensuring medical device safety, and following up on Medicaid reimbursement

Research and Innovation Slowdown

Another area primed for workforce disruption is medical research and innovation due to staffing cuts at the Agency for Healthcare Research and Quality (AHRQ.) AHRQ plays a key role in supporting healthcare research, providing funding for innovative medical studies, and improving evidence-based practices. With fewer resources at this agency, research grants could slow down, and fewer studies might be funded, impacting the development of new treatments and technologies.

This could limit opportunities for hospitals to engage in clinical trials, access cutting-edge technology, or improve patient outcomes based on the latest evidence. The reduction in research funding could also spell trouble for areas like personalized medicine, chronic disease management, and health disparities.

For CFOs: Without access to medical advancements and cutting-edge treatments to drive patient volumes and new service lines, this may translate into lower revenue growth for health systems.

The CFO Guide

1. Invest in IT Infrastructure and Talent: CFOs should examine investments to strengthen their internal IT teams or partner with third-party IT service providers to ensure continuity in EHR management. By allocating a budget for proactive IT infrastructure upgrades, including cybersecurity measures, and data analytics tools, CFOs can minimize downtime and protect against potential breaches. Also, training internal IT staff to handle emerging technologies could reduce the health system’s dependence on external agencies.
    
2. Leverage Alternative Research Partnerships: CFOs can look for alternative funding sources for research and innovation. They can also increase their focus on developing in-house research programs and collaborating with clinical trial sponsors to ensure the continued flow of medical innovation.
    
3. Optimize Operational Efficiencies: CFOs can also focus on improving operational efficiencies across their organization including streamlining processes, reducing waste, and finding cost-effective solutions to maintain high-quality patient care.
    
4. Bonus strategy: CFOs can also get involved in policy discussions with their local representatives. By adding their voice to the pushback against actions that harm public healthcare, CFOs can help safeguard their organizations.