Hello, and welcome back to this week’s edition of the Gist Weekly. We immensely appreciate your continued readership and invite you to forward this email to friends and colleagues—please encourage them to subscribe too!
IN THE NEWS
What happened in healthcare recently—and what we think about it.
- Workforce cuts at the Department of Health and Human Services (HHS). Last Friday, the Associated Press reported that about 5,200 probationary employees across HHS would be fired in the coming days. Almost 1,300 of these employees worked for the Centers for Disease Control and Prevention (CDC), accounting for about 10% of CDC’s total workforce. Also laid off were many employees at the Food and Drug Administration and the National Institutes of Health. The cuts are a part of President Trump’s project to dramatically reduce the federal bureaucracy and lay off all probationary workers, who are easier to fire. The cuts came on the heels of Robert F. Kennedy Jr.’s confirmation as Secretary of HHS last week. Kennedy addressed HHS employees on Tuesday and did not speak about the workforce reduction, instead declaring that “nothing is going to be off limits” as he works to reduce chronic disease.
- The Gist: Significant cuts to the federal healthcare workforce will have significant short- and long-term effects. All cuts were targeted at probationary workers, but not all probationary workers were new to federal service, reflecting a serious loss of institutional knowledge across the agency. There is no evidence that the workforce reductions will end with the cutting of all probationary workers, with President Trump calling for a large-scale reduction to the federal workforce and Department of Government Efficiency leader Elon Musk even calling the bureaucracy “unconstitutional.” HHS employs more than 80,000 workers and is one of the largest federal government agencies by spending; further cuts could be especially challenging for the department. This volatility will likely make HHS a less appealing career destination over the long term, potentially dissuading top talent and hurting the department’s reputation as a leader in scientific innovation.
- Federal Trade Commission receives deluge of premerger notifications as new notification rules take effect. The Federal Trade Commission (FTC) received 400 merger and acquisition filings, accounting for an estimated 200 transactions, during the week ending February 7, FTC Chairman Andrew Ferguson said in a staff memo on Monday. This volume is about four times what the FTC typically receives based on historical averages. The filings came ahead of the new Hart-Scott-Rodino (HSR) form, which took effect February 10, in which merging parties must give regulators more detailed information on investors, previous transactions, potential competitive overlaps and more. Ferguson directed staff to evaluate these filings with the FTC’s and Department of Justice’s 2023 Merger Guidelines, which give regulators increased authority to challenge mergers on antitrust grounds.
- The Gist: This inundation of filings demonstrates how much merging parties want to avoid the higher time and monetary burden of the new HSR form. These HSR changes and the continued use of the 2023 Merger Guidelines may impede some M&A activity, but do not represent a remarkable shift from the heavy antitrust oversight seen since President Trump’s first term. While regulators will now have more data at their disposal with which to challenge mergers, this does not necessarily mean they will use this information to challenge mergers more aggressively. The 2023 Merger Guidelines are recommendations and are not legally binding. Trump bringing the FTC under White House purview further muddies the waters as to how the new filing rules and merger guidelines will be applied. The HSR guidelines could also still be reversed in the face of a legal challenge from the U.S. Chamber of Commerce. Continued patience will be key.
- The state of the flu response. The continued communications freeze for federal health agencies is taking its toll. CDC has not released an analysis on the flu to its Health Alert Network, nor to the World Health Organization, from which the United States withdrew in January. CDC’s flu dashboard does reflect a surge in influenza, but does not include information on how providers should protect themselves and the public. Several studies are also still missing or delayed, notably the CDC’s Morbidity and Mortality Weekly Report (MMWR), which was about to publish studies on the H5 bird flu. This pause comes in the middle of flu season, and as H5 bird flu, respiratory syncytial virus, and COVID-19 continue to circulate.
- The Gist: We are not in “quad-demic” territory yet, but a bad flu season with four different types of flu circulating is a bad time to be missing critical information. In early February, 7.7% of patients who visited clinics and hospitals and were not admitted were experiencing flulike symptoms, a notable prevalence that normally would raise alarm bells. The MMWR provides critical information to providers on how to manage specific strains; the communications freeze limits providers’ ability to provide precise care. The key to containing an outbreak is coordination among various public health authorities, which does not appear to be happening. For providers, as long as these data remain missing, it will be more challenging for them to make diagnoses and project volumes.
Plus—what we’ve been reading.
- Taking on the health insurers—and winning. Published last week in The Wall Street Journal, this piece illustrates the story of patients who appeal denials from their health insurers. Each year, payers deny approximately 850 million claims, citing reasons such as medical necessity or experimentality of a treatment. Patients who seek to appeal face a bewildering struggle to gain access to treatments that could save their lives. Those who try to conquer this laborious process often find success, but at great personal cost.
- The Gist: More than 5 billion claims are filed annually in the United States; approximately 1 in 5 of in-network claims are rejected. Payers see prior authorizations as an effective tool to manage utilization, an increasingly important lever as many payers face higher medical-loss ratios. Patients and providers have a starkly different perspective; they see them as a burdensome administrative hurdle blocking a patient’s access to needed care. Successfully appealing a denial is really hard work—requiring compiling evidence from medical studies, navigating paperwork, and hours of phone calls—that should be simpler for patients to navigate. Few people have the capacity, patience and time to undertake this frustrating process even under the best of circumstances. Unfortunately, denials typically come when patients are at their most vulnerable and are less likely to have this additional bandwidth, which impedes access to care.
Graphic of the Week
A key insight illustrated in infographic form.
The state of trust in public health in America
In light of the recent confirmation of Secretary Kennedy to lead HHS and new survey data on trust in public health, this graphic highlights Americans’ declining positive perception of public health officials. Among respondents’ personal doctors, the CDC and their state and local public health officials, trust in all three, regardless of political identification, has decreased from June 2023 to January 2025. Respondents trusted their doctors more than public health officials, and there is less difference by political identification. In 2025, only 61% of surveyed Americans reported that they trusted the CDC. That prevalence drops to 39% among Republicans and increases to 85% among Democrats. Another important public health indicator, the percentage of kindergarteners with vaccine exemptions, also illustrates the challenging place in which public health officials find themselves. During the 2023-2024 school year, about 3.3% of kindergartners received an exemption, an increase from 2022-2023 that still does not provide a complete picture. Exemption rates vary widely by state, with 6 states having exemption rates more than double the median. These differences are a reflection of how easy it is to receive an exemption in some states rather than a clear trend. The shift also underscores how easily an outbreak could occur in some states. Alarmingly, the perceived importance of vaccines has dramatically decreased, from 94% in 2001 to 69% in 2024. We will have to wait and see what Kennedy, long considered a vaccine skeptic, does regarding vaccines, but amid immense distrust in the healthcare system, providers’ role of giving thorough, honest information to their patients is more important than ever.
This Week at Kaufman Hall
What our experts are saying about key issues in healthcare.
In his 1995 debut book The Road Ahead, Bill Gates famously observed “we always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten.”
In Kaufman Hall’s most recent Strategy Spotlight blog, Dan Clarin speaks with Rich Liekweg, CEO of Missouri-based BJC Health System, and Nick Barto, president of BJC, on what’s different about leading a health system today compared to 10 years ago. Their conversation also explores how BJC is confronting the ever-shifting headwinds in healthcare, and BJC leadership’s current thinking on how best to engage and inspire their people.
On Our Podcast
The Gist Healthcare Podcast—all the headlines in healthcare policy, business, and more, in ten minutes or less every other weekday morning.
Last Monday, we heard an encore presentation of host J. Carlisle Larsen’s conversation with Benjamin Hamar, MD, Maternity Center Director at UMass Memorial, about the hospital’s pilot hospital-at-home program that allows postpartum patients to receive care at home.
This Monday, JC speaks with Matthew Fiedler, Senior Fellow at the Brookings Institution, about the recent charge from House Republicans to the Energy and Commerce Committee to find $880 billion in federal healthcare spending cuts, much of which could ultimately be cut from Medicaid.
To stay up to date, be sure to tune in every Monday, Wednesday, and Friday morning. Subscribe on Apple, Spotify, Google, or wherever fine podcasts are available.
Thanks for reading! We’ll see you next Friday with a new edition. In the meantime, check out our Gist Weekly archive if you’d like to peruse past editions. We also have all of our recent “Graphics of the Week” available here.
Best regards,
The Gist Weekly team at Kaufman Hall
