What CFOs Can Do If HHS Layoffs Prevail
Potential layoffs within the Health and Human Services Department (HHS) under a proposed plan by the Trump administration could significantly disrupt healthcare operations, according to some experts. CFOs need to take proactive steps to prepare for these potential changes.
Downsizing HHS, particularly impacting its technology departments and the Agency for Healthcare Research and Quality (AHRQ), might negatively affect the healthcare landscape. Concerns include challenges to the technology infrastructure supporting electronic health records (EHRs) and potential slowdowns in medical research. CFOs will need strategic approaches to mitigate these impacts on their respective health systems.
Cybersecurity, Safety & CMS
Health systems often rely on HHS guidance, including the HITECH Act, for cybersecurity measures and electronic health record certifications. Under the Biden administration, the HHS technology department saw an investment in artificial intelligence adoption and innovation. Workforce reductions could impede these efforts. According to reports, the Trump administration has already taken measures, such as removing the department’s strategic AI document from the web and dismissing senior staff involved in data, technology, and AI policy.
Without HHS support, health systems could face greater cybersecurity risks. As cyber threats increase, the potential for incidents grows. Delays in technological advancements could also hinder the exchange of patient information, negatively impacting hospital workflows, increasing administrative expenses, and threatening patient outcomes. Data integrity could also be at risk. As their workforce is reduced, HHS may have fewer resources to support data analysis, quality control, and compliance with federal regulations. HHS, through the FDA, also plays a crucial role in medical device safety and cybersecurity. Workforce reductions could affect patient safety related to these devices.
Implications may also arise for the Centers for Medicare & Medicaid Services (CMS). With potential Medicaid cuts, reimbursement and governance in this sector will likely take a hit, affecting health systems’ finances.
For CFOs: These disruptions could increase the costs of managing internal IT teams, addressing data quality issues, ensuring medical device safety, and dealing with Medicaid reimbursement.
Research and Innovation Slowdown
Another area at risk is medical research and innovation due to staffing cuts at AHRQ. This agency supports healthcare research, funds medical studies, and helps improve evidence-based practices. With fewer resources, research grants could slow, hurting the development of new treatments. This could limit hospitals’ opportunities to engage in clinical trials and incorporate cutting-edge technology.
The reduction in research funding could also cause problems for areas like personalized medicine, chronic disease management, and health disparities.
For CFOs: The lack of medical advancements and treatments to drive patient volumes and new service lines could translate into lower revenue growth for health systems.
The CFO Guide
- 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 EHR management continuity, enhance cybersecurity, and improve data analytics capabilities. This may 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.
- Leverage Alternative Research Partnerships: CFOs can explore alternative funding sources for research like in-house programs or collaborations with clinical trial sponsors.
- Optimize Operational Efficiencies: CFOs can focus on streamlining processes and finding cost-effective solutions to maintain high-quality patient care.
- Bonus strategy: CFOs can advocate with local representatives to push back against actions that harm public healthcare.
Marie DeFreitas is the CFO editor for HealthLeaders.
