In this edition of AcademyHealth’s Situation Report, we examine how the ongoing federal shutdown is compounding financial and operational strain across the U.S. health system. Hospitals in Virginia are managing both Medicaid reductions and delayed payments, pediatric providers are adjusting to shifting vaccine policies that increase administrative burdens, and changes in CDC leadership have raised new questions about national public health coordination. Together, these pressures underscore the need for evidence-based solutions—and the vital role of health services researchers in guiding policy and practice during periods of disruption.
In today’s issue:
- Virginia Medicaid Reductions Threaten Hospital Operations Amid Shutdown Concerns
- Financial Pressures Mount: Pediatricians Struggle Under Changing Federal Vaccine Policies
- Former CDC Director Reflects on Dismissal
- Pharmaceutical Tariffs Threaten Higher Costs – Policies Exist for State Action
- CDC Adopts COVID-19 & Chickenpox Vaccine Recommendations from Newly Appointed Advisory Committee on Immunization Practices
- Share Your Story of Federal Disruption
Virginia Medicaid Reductions Threaten Hospital Operations Amid Shutdown Concerns
Virginia hospitals are facing financial pressures on two fronts: long-term Medicaid cuts and short-term funding delays due to the federal shutdown. While Medicaid coverage remains in place for now, hospitals that serve low-income and uninsured patients are contending with the expiration of key federal payments and support programs that could go into effect as soon as 2027. Rural hospitals and clinics are preparing for the changes from the federal Reconciliation Bill, which could strip coverage from over 600,000 residents. Though the immediate impact is limited, continued uncertainty is making it harder for providers to plan and budget, especially as they continue to recover from the financial strain of the pandemic.
These shifts disproportionately affect low-income and rural populations, making this a critical moment to explore equity implications in access, outcomes, and system responsiveness. Health service researchers are uniquely positioned to evaluate the ripple effects of such disruptions and provide actionable insights that support more resilient, equitable health systems.
Financial Pressures Mount: Pediatricians Struggle Under Changing Federal Vaccine Policies
Vaccine policy under the Trump administration is making the process of offering vaccines even more burdensome for pediatricians than it was previously. Although recent comments by Health Secretary Robert F. Kennedy Jr. suggested pediatricians are incentivized to administer vaccines due to the high percentage of their revenues that they account for, evidence shows that pediatricians are faced with large up-front costs to purchase vaccines, which can be risky in terms of return on investment. Even for vaccines paid for by the federal government through the Vaccines for Children Program, pediatricians still take on the costs of storage and administration.
Moreover, changes in public attitudes towards vaccines, fueled by changing and inconsistent federal vaccine recommendations, are causing subsequent inconsistencies in vaccine demand and increases in provider workloads. For example, families are increasingly requesting personalized vaccination schedules for their children, which can create the need for several additional appointments to already stretched provider calendars. Some pediatricians predict their peers may stop offering certain vaccines or leave the workforce all together due to additional hurdles to providing preventative care.
Health services researchers play an important role in informing policymakers and the public alike about both the health and economic benefits of routine childhood vaccination. Longer pediatric visits, shrinking choice in vaccine formulas, and rising rates in vaccine-preventable diseases can all exacerbate challenges pediatricians face in keeping their doors open to help children stay healthy and safe.
Former CDC Director Reflects on Dismissal
In a recent interview, former Centers for Disease Control (CDC) Director Susan Monarez reflected on her tenure and abrupt dismissal, highlighting the ongoing tension between political oversight and scientific decision-making. Monarez's tenure was marked by her steadfast commitment to evidence-based decision-making, as she declined to approve vaccine recommendations without full scientific review as requested by Secretary Kennedy. Monarez noted great concern regarding decreasing public trust in public health and its impact on public health professionals and CDC personnel, who survived a shooting at the CDC and have been accused of being too influenced by the pharmaceutical industry by Secretary Kennedy.
Amidst the growing politicization of health agencies and the decrease in evidence-based decision-making amongst federal health leaders, at least ten states are forming independent health alliances as they no longer find federal health agencies trustworthy. An increasingly decentralized public health system poses risks of fragmented health strategies that could lead to inconsistencies in how public health challenges are addressed across the country. Consequentially, states who do not implement some form of system or guideline outside of the federal government could be at higher risk of public health emergencies in the event of another pandemic. The situation emphasizes the necessity for collaborative efforts across states to ensure cohesive and effective public health responses, especially amidst concerns among observers about the role of evidence in recent federal health decisions. Health services researchers could help address this gap by working across states, potentially with the thousands of public health workers, such as Monarez, who have been fired under the current administration, to coordinate public health efforts using data and evidence.
Pharmaceutical Tariffs Threaten Higher Costs – Policies Exist for State Action
As federal tariff proposals on pharmaceuticals advance, a new Health Affairs Forefront article notes that the risks of disruption are most acute in the pharmaceutical and medical device sectors. The U.S. heavily depends on imported active pharmaceutical ingredients from China and the EU; China is currently subject to a 30 percent tariff now, with the possibility of a 145 percent tariff in a few months, and the U.S. imports more than $6 billion annually in antibiotics and related pharmaceutical products from the country. Federal officials have also discussed targeting pharmaceutical imports specifically. Current analyses indicate that the drastically increased import costs on pharmaceutical and medical devices could increase to as much as $63 billion, absorbed mostly by state Medicaid programs, the Department of Veterans Affairs, safety-net hospitals, and public health departments.
Many of these agencies rely on bulk purchasing agreements and federally negotiated pricing mechanisms; if tariffs raise list prices but rebates are not scaled appropriately, states may face higher costs with no federal support. Article authors note that there are policy avenues that states can explore to mitigate these costs, such as issuing health care-focused municipal bonds to raise capital to stabilize Medicaid budgets and public health operations or build short-term stockpiles of critical medications and devices, like insulin, oncology drugs, or injectable antibiotics. States with waiver-supported reinsurance programs could expand eligibility criteria to include high-cost drugs subject to these price increases. Finally, states could enter coordinated purchasing collaboratives, leveraging economies of scale and increasing their collective negotiating power. Health services researchers can build on their expertise on these policies to assist state policymakers explore and implement appropriate options, cushioning vulnerable populations from the worst impacts of these tariffs.
CDC Adopts COVID-19 & Chickenpox Vaccine Recommendations from Newly Appointed Advisory Committee on Immunization Practices
Two weeks after a federal press conference linking Tylenol and vaccines to autism caused public confusion, the CDC updated its immunization schedule in accordance with recommendations made by the newly appointed 17-member CDC Advisory Committee on Immunization Practices (ACIP). The committee's recommendations, which the CDC formally adopted, endorses "individual-based decision-making" for COVID-19 vaccines for persons aged six months to 64 years old. Citing a risk of febrile seizures after the MMRV vaccine, the updated schedule also recommends that children under four years old be immunized for varicella (chickenpox) with a standalone shot rather than through the combined MMRV vaccine.
While the updated schedule maintains public and private insurance coverage for the COVID-19 and chickenpox vaccines, the CDC’s endorsement of ACIP’s recommendations has been interpreted by many experts as reflecting growing vaccine hesitancy. Both the COVID-19 and toddler chickenpox recommendations emphasize the potential risks of the vaccine while neglecting the benefits of immunization and the long-standing documented safety of these vaccines. According to the American Academy of Pediatrics (AAP)—whose own recommendations conflict with CDC's recommendations—ACIP “misrepresented data,” deployed “anti-vaccine” language, and disregarded research that seizures after a MMRV vaccine are rare and have limited impacts on children. Despite an updated vaccine schedule, confusion around vaccines will persist since the CDC’s guidance conflicts with recommendations from states and state coalitions (e.g., Northeast Public Health Collaborative) and from large, reputable organizations like the AAP and the American Academy of Family Physicians (AAFP), which recommends that all adults and children be immunized against COVID-19.
Voices of HSR: Share Your Story of Federal Disruption
We hear you. Over the past couple of months you sent in stories related to shifting policy and funding cuts. Your experiences detailed how the ongoing changes at the federal level impact our health services research community professionally, particularly around research that has been disrupted in a multitude of ways from stalled grant reviews to work on specific topics and populations to cut funding or missing data. Further, you told us about job losses on your team and post-doc placements that disappeared. These impacts are further experienced personally, those in our community have had painful experiences including possible housing insecurity due to finances and grief for the loss of one’s career, among others. Given the impact of the government shutdown across health agencies, we want to continue collecting and sharing the impact on the field.
We reached out to some of you who shared your stories and were willing to be contacted regarding activities, such as bringing your story to policymakers or the media. We have more upcoming activities in the works. If you have a story or experience related to the impacts of current federal changes, please consider sharing here.
Previous Editions
This is the latest in a series of Situation Report updates from AcademyHealth. You can find prior issues here.
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