By now, you’ve likely heard of the Department of Government Efficiency, aka DOGE, which despite the “D,” is not an official governmental department (to become one would require an act of Congress) but rather an advisory body—one that’s wielding unprecedented power at the behest of President Donald Trump, who created it with the ostensible goal of eliminating wasteful spending throughout the federal government.
Led by Elon Musk, by some estimates the richest person on Earth, the DOGE team has been working quickly to access internal databases and slash personnel at government agencies ranging from the Federal Aviation Administration to the IRS.
Departments connected to healthcare are no exception.
DOGE has targeted Medicaid and Affordable Care Act (ACA) spending, staffing, and health research funding, raising concerns and causing confusion among industry leaders who spoke to Healthcare Brew.
“[There’s a] massive amount of uncertainty where this is heading. How do we prepare? What are the impacts going to be?” Ryan Lilly, SVP and managing director of healthcare at public relations agency MWW Health, said. “Healthcare is very interconnected…if you pull one lever here, the pressure comes out somewhere else.”
Medicaid, ACA. In early February, DOGE gained access to the Centers for Medicare and Medicaid Services (CMS) payment and contracting systems, the Wall Street Journal reported. On Feb. 19, Trump endorsed a Feb. 13 Republican-led budget that had proposed $880 billion in cuts on programs under the House Energy and Commerce Committee, which includes Medicaid.
The biggest proposed cuts would fall on Medicaid and the Children’s Health Insurance Programs, or CHIP, which cover a combined 79.3 million lower-income and children as well as pregnant people, older adults, and some people living with disabilities under 65. This makes up 23.3% of the US population.
The new administration also cut funding for the Affordable Care Act Navigator program, which helps people enroll in Medicaid, from $98 million to $10 million. Meanwhile, several top health officials have publicly resigned since Inauguration Day following NIH budget cuts.
Republicans have previously proposed adding work requirements to the Medicaid program, which means that, similar to food benefits, beneficiaries would have to prove they’re working or volunteering a certain number of hours per month, or are otherwise enrolled in school, caring for a child under six, disabled, experiencing homelessness, or pregnant. But health research firm KFF reported earlier this month that 92% of Medicaid members are either already working or not working because of school, caregiving, illness, or a disability.
Navigate the healthcare industry
Healthcare Brew covers pharmaceutical developments, health startups, the latest tech, and how it impacts hospitals and providers to keep administrators and providers informed.
Provider pressure. Uninsured people are more likely to postpone or avoid care, or experience medical debt. A 2021 cross-sectional study in JAMA Health Forum found that they’re also more likely to rely on emergency rooms, which can put pressure on hospital efficiency and finances.
Jessica McGlory, the founder of hospice provider Guaranteed, told Healthcare Brew that her company depends on the Medicaid population, and that there are “far-reaching implications if Medicaid is no longer available to the people who need it.”
Many of the company’s patients are older adults who rely on Medicare. But she said that if patients are uninsured and don’t access the care they need early, they can end up sicker or receive late diagnoses for diseases and need more care toward the end of their life, putting pressure on providers.
“One of our fastest-growing components of our business is actually on the Medicaid side,” she said.
Defining waste. The Department of Health and Human Services has a $1.7 trillion budget, and Lilly believes that some portion of that could be more carefully spent.
“Undoubtedly, there is waste and fraud” at CMS, he said, but added that much of it is improper payments due to documentation issues.
“If we can plug some of those holes and save money there, I think that’s a good thing,” he said.
But he is concerned about transparency surrounding the cuts.
“So much of this comes down to who is defining waste and fraud, and I think it becomes very subjective. What really has value? And is it immediate value, or is it long-term value?” he said.
When asked for comment, CMS directed Healthcare Brew to an online statement saying the department is “taking a thoughtful approach to see where there may be opportunities for more effective and efficient use of resources in line with meeting the goals of President Trump.”