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HEALTHCARE & GOVERNMENT
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HHS Shoe Drops in San Francisco |
Over 300 Department of Health and Human Services employees, formerly officed in the San Francisco Nancy Pelosi Federal Building, have received termination notices. Many of these employees were blindsided by the abruptness of their layoff after they discovered their termination when their building access badges stopped working. The layoffs affected staff managing critical programs such as Medicare, Medicaid, and the Administration for Children and Families. In announcing the restructuring, Robert Kennedy, Jr. blasted HHS for failing to improve Americans' lifespans and not doing enough to drive down chronic disease and cancer rates. "All of that money," Kennedy said of the department's $1.7 trillion yearly budget, "has failed to improve the health of Americans." (https://abc7news.com/post/white-house-close-san-francisco-health-human-services-office-hundreds-impacted-pelosi-federal-building/16115831/)
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Layoffs are Underway at US Health Agencies - Including CMS, NIH, CDC & FDA |
Employees across the massive U.S. Health and Human Services Department began receiving notices of dismissal on April 1st in an overhaul ultimately expected to lay off up to 10,000 people. The notices came just days after President Trump moved to strip workers of their collective bargaining rights at HHS and other agencies throughout the government. Health Secretary Robert F. Kennedy Jr. recently announced a plan to remake the department, which, through its agencies, is responsible for tracking health trends and disease outbreaks, conducting and funding medical research, and monitoring the safety of food and medicine, as well as for administering health insurance programs for nearly half of the country. The plan would consolidate agencies that oversee billions of dollars for addiction services and community health centers under a new office called the Administration for a Healthy America. The layoffs are expected to shrink HHS to 62,000 positions, lopping off nearly a quarter of its staff - 10,000 jobs through layoffs and another 10,000 workers who took early retirement and voluntary separation offers. Kennedy criticized the department he oversees as an inefficient "sprawling bureaucracy" in a recent video announcing the restructuring. He said the department's $1.7 trillion yearly budget "has failed to improve the health of Americans." The department provided a breakdown of some of the cuts: 3,500 jobs at the FDA; 2,400 jobs at the CDC; 1,200 at NIH; 300 at CMS.
Beyond layoffs at federal health agencies, cuts are beginning to happen at state and local health departments as a result of a recent HHS move to pull back more than $11 billion in COVID-19-related money. Local and state health officials are still assessing the impact, but some health departments have already identified hundreds of jobs that stand to be eliminated because of lost money, "some of them overnight, some of them are already gone," said Lori Tremmel Freeman, chief executive of the National Association of County and City Health Officials. (https://apnews.com/article/health-human-services-layoffs-restructuring-rfk-jr-ec4d7731695e4204970c7eab953b2289) MEANWHILE, 23 states and the District of Columbia have filed a lawsuit against HHS over the Trump administration's abrupt cancellation of billions in public health grants to state health departments. The suit, filed April 1 in the U.S. District Court for the District of Rhode Island, alleges HHS' discontinuation of more than $11 billion in funding to state health departments violates federal law and jeopardizes public health. (https://www.beckershospitalreview.com/hospital-management-administration/states-sue-hhs-over-12b-in-canceled-health-funds-4-updates/)
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California State Senator Proposes Creating State's Own NIH |
San Francisco's Senator Scott Wiener (D) wants the world's fifth-largest economy to create its own National Institutes of Health and vaccine program - a bill introduced recently in the California Senate would create a new state agency to fund the scientific research being slashed by Elon Musk's Department of Government Efficiency as well as bolster the vaccine access being questioned by HHS Secretary Robert F. Kennedy Jr. Weiner's proposal would create a new state agency - the California Institute for Scientific Research - that would provide grants and loans in several areas being targeted for cuts by Trump and Musk, including research in biomedicine, climate change, weather and drug safety. It also directs California's existing prescription drug manufacturing and procurement program, called CalRx, to start working on vaccine access.
California's local public health departments already order thousands of doses of different vaccines every year through a central state procurement system called myCAvax, and it funds millions of dollars of research through the state's public colleges and universities. But as Wiener's office points out, much of the research being done at California institutions is federally funded, and if that money goes away, his bill will provide a way to backfill it. The proposal envisions grants targeted primarily to the research being cut at the federal level and disbursed to California-based companies, schools and nonprofits or out-of-state researchers collaborating with California scientists. And if federal support for vaccine production also wanes, the bill would direct CalRx to contract with manufacturers to purchase or produce its own label of vaccines, the way it's currently doing to support naloxone access in combating opioid overdoses. (https://www.politico.com/news/2025/03/27/california-democrat-states-nih-00252794
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Congress Passes Spending Bill with Key Healthcare Extenders |
On March 14, 2025, Congress passed a spending package to fund the government through the end of September 2025. President Trump signed the bill into law the following day. The spending bill includes extenders for several telehealth flexibilities and add-on payments that were set to expire March 31, 2025, specifically:
- The spending bill extended Medicare payments for certain designated low-volume hospitals, quality measure endorsements, input and selection, and outreach and assistance for low-income programs until September 30, 2025. It also extended funding for Medicare-dependent hospitals, ambulance services, and the work geographic index floor until October 1, 2025.
- The bill provided a number of telehealth-related extensions through September 30, 2025, including extensions for the removal geographic requirements, expansion of originating sites for telehealth services, expansion of practitioners eligible to furnish telehealth services, and extension of telehealth services for federally qualified health centers and rural health clinics. The in-person requirements under Medicare for mental health services furnished through telehealth and telecommunications technology were also delayed through October 1, 2025.
- The bill extends through September 30th, the telehealth measures which allow for audio-only telehealth services and similarly lengthens the timeline for telehealth to count as a "face-to-face encounter" before recertification for hospice care can be issued.
- The scheduled Medicaid DSH reductions, which were set to begin on April 1, 2025, will be delayed until September 30, 2025. And, Congress also extended the acute hospital care at home waiver authorities through September 30th. (https://kslawemail.com/128/12223/pages/article-1.asp?sid=c5c19fd4-d57a-4415-89ed-eea735d0c444)
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Hospital Finance, Supply Leaders Predict 15% Increase in Tariff-Related Costs |
In a survey of 200 healthcare industry experts, 82% said they expect tariff-related import expenses to increase hospital and health system costs by 15% in the next six months. Black Book Market Research, a healthcare research and analysis firm, conducted the survey in late January - about a month before the U.S. enacted 25% tariffs on products from Canada and Mexico and a 10% tariff on items from China. China is the world's largest producer of active pharmaceutical ingredients, and the U.S. heavily relies on this supply, according to an FDA report. Due to the tariffs on Chinese imports, nearly 70% of survey respondents predicted at least a 10% increase in pharmaceutical costs. The survey respondents spanned hospital finance and supply chain executives, payers, patients, health market customers, pharmaceutical and medical equipment manufacturers, and physicians and ancillary practice administrators. (https://www.beckershospitalreview.com/supply-chain/hospital-finance-supply-leaders-predict-15-increase-in-tariff-related-costs/)
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CYBERCRIME & HEALTHCARE
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Hackers Have Hit 78% of U.S. HCOs, with the Average Cost of a Breach Soaring to $11M per Incident |
According to a March 28 report from Black Book Market Research, cyberattacks have hit 78% of U.S. healthcare organizations, with the average cost of a breach soaring to $11 million per incident, largely due to ransomware attacks Black Book, a technology survey organization, released findings from its first-quarter 2025 Global Healthcare Cybersecurity Survey, which gathered responses from more than 1,200 healthcare administrators worldwide. (https://www.beckershospitalreview.com/cybersecurity/healthcare-data-breaches-now-average-11m-per-incident-report/)
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FBI Probes Oracle Hack Tied to Healthcare Extortion |
The FBI is investigating a cyberattack on Oracle's computer systems in which hackers stole patient data to extort multiple U.S. healthcare providers, Bloomberg reported March 28. Oracle notified some healthcare customers earlier this month that the breach occurred sometime after Jan. 22. According to a notice sent to clients and obtained by Bloomberg, hackers accessed company servers and copied patient data to an external location. A person familiar with the matter, who spoke on condition of anonymity, told the publication that cybercriminals attempted to demand ransom from affected medical providers. The total number of targeted providers and stolen patient records remains unknown. The breach affected older servers from EHR company Cerner, now known as Oracle Health, which Oracle acquired for $28 billion in 2022. The compromised servers had not yet been migrated to Oracle's cloud, according to the company's notice. Oracle said the attackers used stolen customer credentials to gain access and that the company became aware of the incident around Feb. 20. The company warned customers that stolen data may include patient information from electronic medical records. A person familiar with the incident said the compromised information contained recent patient records. (https://www.beckershospitalreview.com/cybersecurity/fbi-probes-oracle-hack-tied-to-healthcare-extortion-report/)
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HEALTHCARE PROVIDER TRENDS
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Health Systems Eye Microhospitals in Effort to Increase Access at Lower Cost |
Modern Healthcare reports that many health systems, including CommonSpirit Health and Intermountain Health, have invested in microhospitals, which tend to fall somewhere between urgent care centers and full-size traditional hospitals in terms of services. More microhospitals are popping up nationwide as health systems try to increase access to care without pouring money into large-scale projects. Hospital operators have touted the model as cheaper to build and requiring less capital to operate than a traditional hospital, while still providing critical services to patients in areas with care gaps. Services can also be customized based on what a market needs, operators say. (https://kffhealthnews.org/morning-breakout/health-systems-eye-microhospitals-in-effort-to-increase-access-at-lower-cost/)
HealthLeaders recently reported that roughly 100 micro- or neighborhood hospitals now dot the U.S. landscape. Health systems are partnering with micro-hospital companies to locate these facilities in competitive markets, and to meet the needs of smaller and underserved communities where access may be an issue. These types of facilities could become more popular as healthcare leaders move away from pricey expansion plans that include new hospitals and look at connected care strategies and community health hubs. (https://www.healthleadersmedia.com/innovation/micro-hospitals-spotlight-small-size-big-benefits)
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Employers Get Big Drug Discounts Through Program for Hospitals That Serve Poor Patients |
A new breed of drug middlemen is pushing an unusual cost-saving strategy that lets their employer clients tap a federal program meant for hospitals that serve the poor. The government program, known as 340B, allows hospitals that care for many uninsured and low-income patients to purchase outpatient medicines at steep discounts. Hospitals can pocket the savings, but they can also choose to pass the discounts on to patients at their pharmacies.
Companies such as Rescription, MakoRx and Liviniti are selling pharmacy-benefit plans that save employers money by funneling workers to those 340B hospital pharmacies instead of traditional drugstores. The workers get the discounted 340B price under these plans. Hospitals participate because it expands their customer base and they receive fees for dispensing prescriptions, the companies say. The companies count some of the participating hospitals among their clients, providing benefits for hospital workers. They say they are hoping to change the business of pharmacy-benefit managers, which traditionally negotiate prices for their clients with drugmakers and demand rebates to cut net costs.
The arrangements with 340B hospitals avoid rebates because the hospitals buy directly from the drugmakers at the discounted price - and through these plans they pass on that low price directly to the employers, the companies say. The PBMs make money by charging a monthly administrative fee for the employees they manage. (https://www.wsj.com/health/healthcare/prescription-drug-prices-340b-pharmacy-benefit-plans-6834cc08?st=H7zQwQ&reflink=desktopwebshare_permalink)
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AI & OTHER HEALTHY BREAKTHROUGHS
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Google Launches New Healthcare-Related Features for Search, Android & Pixel Watch |
Google has announced new products and features aimed at healthcare use cases, including improved Google Search for health queries, medical record APIs, and new health-focused "open" AI models. In Search, Google says it's using AI and ranking systems to expand "knowledge panel" answers on thousands of health-related topics, and adding support for healthcare queries in Spanish, Portuguese, and Japanese on mobile. Search already provided knowledge panel answers for ailments such as the flu or the common cold, but the update greatly expands the number of topics the knowledge panels cover, the company said. Google is also debuting a Search feature it's calling "What People Suggest" on mobile in the U.S. to highlight content from users with shared experiences relating to health conditions. For instance, if someone asks about common exercises for people dealing with arthritis, "What People Suggest" will collate reports from various forums around the web using AI.
ALSO, Google has launched new medical records APIs globally for its Health Connect platform for Android devices, which will help collect data from medical providers and let users see this data across different apps and make it easier to access the info on devices like phones, Google said.
MEANWHILE, Google's "Loss of Pulse Detection" feature, available exclusively on its Pixel Watch 3, has received clearance from the FDA. The feature will be enabled remotely by Google, any day on existing smartwatches in the U.S. The feature can detect when its wearer has suffered a loss of pulse - due to primary cardiac arrest, respiratory or circulatory failure, overdose, or poisoning - and automatically prompts a call to emergency services if you're unresponsive. (https://techcrunch.com/2025/03/18/google-adds-new-healthcare-related-features-in-search/)
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YC-backed Taxo Raises $5M to Slash Healthcare Admin with its AI 'Reasoning Engine' |
There are already dozens, perhaps hundreds, of startups using AI to reduce the notoriously complex administrative burdens in healthcare. One such start-up company, called Taxo, which offers an app that doctors and others use for tasks like getting prior authorizations from insurers, patient intake, and medical billing. The startup recently closed a $5 million seed round led by Y Combinator, General Catalyst, and Character Capital. Taxo says that what sets it apart is its AI "reasoning engine," which helps it build trust with doctors. At Taxo, the tech helps reduce hallucinations while increasing prior authorization approval rates to 98%, compared to an industry average of about 80%, according to the company, which built its "reasoning engine" by adding a healthcare-specific layer on top of existing models like OpenAI's and Anthropic's. It says the system is trained on hard-to-access healthcare data that makes it difficult for others to scrape overnight. (https://techcrunch.com/2025/03/28/yc-backed-taxo-raised-5m-to-slash-healthcare-admin-with-its-ai-reasoning-engine/)
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UCSF Health Creates New AI Executive Role |
San Francisco-based UCSF Health has named a new executive to monitor how AI is being used by clinicians. Jinoos Yazdany, MD, was recently appointed as the inaugural executive director of AI monitoring in clinical care. She will oversee the Impact Monitoring Platform for Clinical Care, a collaboration between the health system and UCSF School of Medicine's Division of Clinical Informatics and Digital Transformation. "As AI becomes more deeply embedded in healthcare, we must take an active approach to monitoring," she said in a news release. "IMPACC will be essential to ensuring these technologies are not only safe but also fair and truly beneficial for both patients and our health system." (https://www.beckershospitalreview.com/hospital-executive-moves/ucsf-health-creates-new-ai-executive-role/)
MEANWHILE, Los Angeles-based Cedars-Sinai expects "robust returns" from informatics projects over the coming years, executives told Becker's. The health system recently bolstered its informatics leadership, reflecting an increased focus on AI and innovation - and the role informatics plays in both - at Cedars-Sinai. (https://www.beckershospitalreview.com/innovation/robust-returns-cedars-sinais-informatics-strategy/)
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The Hologram Doctor Will See You Now |
Last year, some cancer patients in Tennessee and Mississippi were offered an alternative to videoconferencing with oncology specialists located hours away: they could see a hologram doctor, courtesy of the same special effects that have projected the Jonas Brothers and other celebrities at concerts and live events. The offer came from West Cancer Center & Research Institute, a health system that employs about 61 doctors and serves about 19,240 new patients a year across 12 locations in Tennessee, Mississippi and Arkansas. Its doctors typically spend hours on the road each week getting to the satellite clinics to see patients in more rural locations, while also relying heavily on videoconferencing for check-ins. Now, however, two of those clinics are replacing the video calls with life-size hologram-like displays, part of a cross-industry push to take videoconferencing to the next level. The setup works like this: Doctors are beamed from a small production studio in the Germantown clinic and appear in life-size boxes in designated exam rooms at the satellite clinics. The boxes are fronted with a flat, clear 4K LCD screen, and a specialized lighting setup inside gives the flat image an appearance of three-dimensionality. Patients, however, aren't being projected as holograms to the doctors. In the clinics, they communicate via camera - an intentional choice to give the patient, rather than the doctor, the more realistic experience. (https://www.wsj.com/articles/the-hologram-doctor-will-see-you-now-a68a504f?st=x4AHW9&reflink=desktopwebshare_permalink) (https://www.wsj.com/articles/googles-new-tech-means-video-calls-may-not-be-the-death-of-us-after-all-ed10140c?mod=article_inline)
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Researchers Discover New Class of Antibiotics |
The last time a new class of antibiotics reached the market was nearly three decades ago, but that could soon change, thanks to a discovery by researchers at McMaster University. A team led by researcher Gerry Wright has identified a strong candidate to challenge even some of the most drug-resistant bacteria on the planet: a new molecule called lariocidin. The findings were published in the journal Nature on March 26, 2025. The discovery of the all-new class of antibiotics responds to a critical need for new antimicrobial medicines, as bacteria and other microorganisms evolve new ways to withstand existing drugs. This phenomenon is called antimicrobial resistance and it's one of the top global public health threats, according to the World Health Organization. (https://phys.org/news/2025-03-breakthrough-moment-class-antibiotics.html) (https://www.nature.com/articles/d41586-025-00961-z)
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