Leaders in healthcare sit in a unique space, with a keen understanding of the complex funding mechanisms that support healthcare delivery and education.
At a time of heightened economic and political uncertainty, hospital and health system leaders are leveling up advocacy efforts to make clear to elected officials the repercussions cuts to Medicaid, research funding and rising tariffs could have on healthcare operations and patient access.
In late March, finance leaders from health systems across the country — including Charlotte, N.C.-based Advocate Health; St. Louis-based Mercy Health; and Sacramento, Calif.-based Sutter Health — met with lawmakers in Washington, D.C., warning them that proposed cuts to Medicaid would reduce access to care for millions of patients and trigger hospital service cuts or closures, particularly in rural areas.
Around the same time, Kaufman Hall urged hospital leaders against taking a “wait-and-see” approach. Doing so could lead to major financial losses, analysts said. Instead, Kaufman Hall advised hospital leaders to develop scenario plans for a range of policy outcomes, educate internal stakeholders and clearly communicate concerns on high-risk proposals to local, state and federal officials.
On April 10, House Republicans passed the Senate’s fiscal 2025 budget resolution, which directs lawmakers to identify $880 billion in healthcare spending cuts – a figure many stakeholders say will disproportionately affect Medicaid. While nonbinding, the resolution sets the stage for a legislative package that could significantly reshape the program.
For many healthcare leaders, this moment is urgent: They must leverage their industry expertise to clearly communicate to external stakeholders the dire consequences such cuts would have.
“Legislative advocacy is the most important step hospital leaders can take right now,” the Washington State Hospital Association said in a statement to Becker’s April 9. “Medicaid is a safety net for the most vulnerable members of our community, and cuts are likely to lead to service reductions that impact all patients — not just patients who rely on Medicaid. Getting needed healthcare might require a longer wait time or require further travel. There are likely to be patients who are unable to overcome the barriers presented by these cuts. We and our members are sharing this information with members of our congressional delegation.”
Healthcare groups are also holding a united front advocating against proposed cuts to federal grant funding for medical research projects. In February, the National Institutes of Health shared plans to cap reimbursements for indirect research costs at 15%. A federal judge has since issued a permanent injunction to block the policy from taking effect, siding with research institutions and attorneys general who argued the cuts would significantly slow medical progress and limit access to groundbreaking treatments.
On April 8, 10 national organizations — including the Association of American Medical Colleges, which represents more than 450 teaching hospitals — said they’ve teamed up to develop a new funding model for indirect costs and submit it to the federal government. The move represents a strategic effort to avoid a prolonged legal battle and instead engage policymakers in a solution that protects critical research infrastructure while addressing federal budget concerns.
Meanwhile, health system leaders are urging the Trump administration to exempt medical supplies and pharmaceuticals from tariffs. Pharmaceuticals are currently subject to a universal 10% tariff, and federal officials have signaled additional levies on drug imports may be implemented in the next few months. Leaders have warned tariffs could lead to more drug shortages, particularly for commonly prescribed generic drugs, and cost increases for providers and patients.
“We are hopeful that measures will be taken to exempt vital medical supplies and equipment and ensure the impacts on health care are minimized,” Providence CEO Erik Wexler previously said in a statement to Becker’s. “The healthcare supply chain is fragile. We saw this during the pandemic when masks, ventilators and other products were in dangerously short supply. We welcome measures that help diversify and secure the U.S. health care supply chain, including more domestic manufacturing. It’s also important to note potential cuts to Medicaid on top of tariffs will cripple health systems across the country which could create a national emergency in terms of access to healthcare.”
Funding for graduate medical education, or GME, is also at a critical juncture, as hospitals brace for broader healthcare spending cuts and ongoing financial strain. For decades, teaching hospitals and medical associations have urged Congress to lift the federal cap on Medicare-supported residency positions, which has remained essentially unchanged since 1997. Although Congress has authorized 1,200 new residency slots since 2021, many health systems continue to train residents far beyond what Medicare reimburses – a significant expense.
In 2024 alone, at least four health systems announced plans to reduce or eliminate residency programs in part due to rising costs and stagnant federal support. The financial pressure has prompted more healthcare leaders to be intentional and transparent with lawmakers about the complexity and cost of training the next generation of physicians.
“There are pre-existing programs, especially in financially strapped places, where cuts to reimbursement could sink programs,” said Lindsay Mazotti, MD, chief medical officer of medical education and science at Sutter Health. “That’s a real threat and it’s concerning.”
Dr. Mazotti said she’s seen physician educators grow more purposeful in recent years about engaging in GME advocacy.
“Part of the role – and this is much clearer to me than it used to be – of those who get to oversee and work in graduate medical education is to advocate for graduate medical education,” she said.
