Health Care Matters | May 2, 2025
Health Policy Tracker: Trump’s First 100 Days
As we reach the 100-day milestone of the Trump administration, it's a natural moment to take stock of just how dramatically the health care landscape has transformed. We've been tracking health care policy developments in this newsletter each week, but when we step back and compare today's reality to where things stood in January, the scale of change becomes truly remarkable. In just over three months, we've witnessed a wholesale restructuring of federal health agencies, dramatic policy reversals, and the emergence of new priorities that have left stakeholders across the health care ecosystem scrambling to adapt.
Major Health Care Transformations Since January:
Massive Workforce Reduction: HHS is on track to have 20,000 fewer employees than it had 100 days ago, with significant cuts at FDA (3,500), CDC (2,400), and NIH (1,200), while half of HHS regional offices have been closed.
New Leadership and Direction: Robert F. Kennedy Jr. leads HHS with his "Make America Healthy Again" initiative, establishing a commission to investigate the root causes of America's chronic disease crisis and creating a new Administration for a Healthy America within HHS.
Budget and Contract Reductions: HHS has announced a 35% reduction in contract spending with 334 contracts already terminated, while competing Republican budget frameworks propose varying levels of Medicaid cuts.
Executive Order Blitz: President Trump quickly revoked 78 Biden-era health care orders and signed new directives on drug pricing and price transparency, signaling further changes to come in both areas.
What to Watch:
Chronic Disease Initiative: The Make America Healthy Again Commission's first assessment findings on childhood chronic illnesses, due in the coming days
Staffing Impacts: Potential consequences of health care agency understaffing, as highlighted by the administration's struggle to respond effectively to a measles outbreak
Drug Pricing Changes: Implementation details for Trump's revamped Medicare drug price negotiation program and potential impact of forthcoming industry-specific tariffs
Legal Challenges: Outcomes of over 50 lawsuits filed against health care-related executive orders, including a federal judge's block on NIH research funding cuts
Additional Budget Cuts: Potential impacts of proposed cuts to the Indian Health Service, which could see a 30% reduction from its 2025 base allocation
Connecticut Healthcare Cost Growth Benchmark Program Falls Short
Connecticut's Cost Growth Benchmark program, established by Governor Ned Lamont and later codified by the General Assembly in 2022, has failed to limit health care cost growth. According to a report from the Connecticut Office of Health Strategy (OHS), although the benchmark was set at 2.9% for 2023, actual health care costs grew by 7.8%, the highest increase since the program began. The report reveals statewide health care spending grew by $38 billion, with Medicare showing the largest increase at 13.7%, followed by commercial insurance at 6.2%, and Medicaid at 2.2%. The biggest factor was non-claims spending, particularly in Medicare and Medicare Advantage programs. Read more here and here.
Why It Matters
Connecticut's experience offers important lessons for other states implementing similar benchmark programs. The dramatic spike in Medicare Advantage costs, particularly when UnitedHealth care changed its OptumCare contract from fee-for-service to percent-of-premium, raises important questions about value-based care models, as the data shows a concerning correlation between the switch to such models and increased costs in Medicare Advantage. The significant contribution of hospital outpatient spending (growing 41% between 2018-2023) and retail pharmacy costs (especially GLP-1 drugs) points to systemic challenges requiring multi-faceted policy approaches. As states nationwide grapple with health care affordability, Connecticut's struggles demonstrate that setting targets alone is insufficient without addressing underlying market dynamics, provider consolidation, and pharmaceutical pricing. Watch for more aggressive regulatory interventions that move beyond benchmarking to directly influence health care market structures and payment models.
Ways and Means Republican Members Share Letter to CMMI
In a letter to CMS Administrator Mehmet Oz and CMMI Director Abraham Sutton, Ways and Means Committee Chairman Jason Smith and Republican members express their interest in the priorities of the Center for Medicare and Medicaid Innovation (CMMI) under the current administration. They call for CMMI to focus on three priorities: developing payment models that generate meaningful program savings, improving care for vulnerable beneficiaries in rural and underserved communities, and increasing transparency and stakeholder input in model development. The authors specifically criticize the previous administration's shift toward health equity at the expense of cost savings, noting that CMMI has increased direct spending by $5.4 billion in its first decade. Read here.
Why It Matters
This letter signals a policy shift that we're already seeing materialize with the cancellation of CMMI primary care payment models. The recent cancellations of Primary Care First (PCF) and Making Care Primary (MCP) models exemplify the broader shift in CMMI priorities highlighted in this letter. These cancellations are significant because primary care models were central to the previous administration's value-based care strategy. The timing of these cancellations, coupled with the letter from the Ways and Means Committee leadership, signal a shift in health care policy direction. CMMI has announced plans to unveil a new strategy focused on "improving the health of Americans through disease prevention via evidence-based practices, empowering individuals with information to make informed decisions, and promoting choice and competition." This reflects the Trump administration's desire to put its own stamp on value-based care, likely with more emphasis on market-based solutions and demonstrable cost savings.
Health care stakeholders should prepare for CMMI's new strategic direction in the coming months, which will likely prioritize models that can demonstrate clear financial returns over those with broader goals around health equity or care transformation without proven cost savings. The Ways and Means Committee's letter may be seen as providing political cover and congressional support for this shift in priorities.
Look for the Helpers: Transforming Suicide Prevention Through Collaborative Care
In a health care landscape often facing daunting challenges, three organizations (Concert Health, University of Pennsylvania Health System, and Kaiser Permanente) are making remarkable strides in suicide prevention through implementation of the Collaborative Care Model (CoCM). This model integrates mental health treatment into primary care settings with impressive results: more than 50% of individuals experiencing suicidal thoughts achieved reduced risk and a 25% reduction in suicide attempts and deaths was observed in one large-scale study. This approach improves health equity across diverse populations through systematic screening, support from behavioral care managers, consultation with psychiatric specialists, and measurement-based care that transforms how health care providers identify and support people during critical periods when they're already seeking health care. Read here.
What We Are Reading
Long-Term Spending of Accountable Care Organizations in the Medicare Shared Savings Program
A recent JAMA study analyzing Medicare data from 2010-2019 found that ACOs in MSSP generated meaningful reductions in health care spending, with effects increasing over time, from $142 per patient over three years to $294 over six years. This resulted in $4.1-$8.1 billion in Medicare savings, with physician-group and small ACOs achieving the largest spending reductions. Read here.
2025 Primary Care Scorecard Data Dashboard
The 2025 Milbank Memorial Fund and Physicians Foundation Primary Care Scorecard Report reveals that chronic underinvestment in primary care continues to undermine patient care, with primary care spending remaining under 5% of total health care spending in 2022 while continuing to decline across all payers. The report highlights how insufficient funding has led to a decrease in primary care clinicians with over 30% of US adults lacking a usual source of care in 2022, the highest level in a decade despite high insurance coverage rates. View the scorecard and report.
What We Are writing
Trump Executive Order Directing Development of New Drug Pricing Model
Check out Coral's newest blog post to learn about President Trump's April 15th Executive Order directing CMS to develop a new Medicare drug pricing model that could significantly expand drugs subject to lower-pricing policies and potentially revive international reference pricing approaches similar to his first administration's proposals. Read here.
Pop health podcast
Advancing Value-Based Care: Progress, Gaps, and Policy Signals
In the latest episode of the Pop Health Podcast, we explore the current state of value-based care with Emily Brower and Mara McDermott, including recent policy developments, emerging trends, federal alignment, and practical tips for tracking meaningful changes in the VBC landscape.