In this edition of the Situation Report, we examine changes to the federal grantmaking process that introduces political oversight and ideological restrictions into the process, offer an update on the NIH’s efforts to spend its FY25 budget as well as detail a new California ballot measure that may signal efforts to invest in and protect science and research despite ongoing obstacles. Read on to learn more about ways health services researchers can navigate these policy shifts and be sure to join us for another member-only town hall happening tomorrow at noon.
In today’s issue:
- New Blog: Executive Order Signals Shift in Federal Grantmaking
- Rural Clinics Closing, Hospital Strategies Shifting in Face of Medicaid Cuts
- NIH Accelerates Awards to Use Entire FY25 Budget
- FDA Moves to Drop Expert Panel Reviews for New Drugs
- California Ballot Measure Seeks to Rebuild Scientific Research Capacity
- Advocates Decry Planned Destruction of Contraceptives Worth $10 million
- Nearly Half a Million Subscribers: AcademyHealth Content Hits Healthcare Triage
New Blog: Executive Order Signals Shift in Federal Grantmaking
A new AcademyHealth blog post breaks down the recent Executive Order on federal grantmaking, which introduces political oversight, ideological restrictions, tighter financial controls, and expanded authority to terminate grants. While the EO raises significant concerns for science-driven research, the blog post outlines practical steps and resources to help researchers adapt, including diversifying funding, strengthening communication, and staying current on policy shifts. Read the full blog here.
Rural Clinics Closing, Hospital Strategies Shifting in Face of Medicaid Cuts
An increasing number of rural health clinics are closing as health systems prepare for Medicaid cuts amidst inflation and workforce challenges. Decisions such as the consolidation of rural clinics in Virginia and impending closures in Nebraska, Maine, and Minnesota illustrate a pattern in which health systems must adjust to financial pressures exacerbated by the reconciliation bill. This legislation, with its nearly $1 trillion reduction in federal Medicaid spending starting in 2027, threatens to deepen the health care access crisis in rural areas, where hospitals are already struggling with workforce issues. Approximately 200 rural hospitals have either terminated inpatient services or closed in the past two decades alone, dramatically surpassing openings or expansions.
According to the nonpartisan Congressional Budget Office, an estimated 10 million Americans will consequentially lose their health care coverage in the next decade. While the legislature includes a $50 billion rural health transformation fund, policymakers have described this initiative as inadequate, especially in the context of the expected $137 billion decrease in federal Medicaid spending in the next decade. Moreover, experts such as Carrie Cochran-McClain, chief policy officer of the National Rural Health Association, have raised urgent questions about the sustainability of health care services in these communities, questioning how the legislature will impact reimbursement challenges.
To offset financial vulnerabilities exacerbated by the legislature, health systems are considering service consolidations, leveraging technology, and potential mergers. This mirrors the pressures seen during the COVID-19 pandemic and forces the sector to innovate amidst constraints, according to hospital leaders, who expressed deep concern for patient care, access, and outcomes. Health services researchers can support health industry representatives who will be returning to Washington this month as Congress debates the renewal of billions of dollars in insurance subsidies.
NIH Accelerates Awards to Use Entire FY25 Budget
For the first time this year, it appears that the NIH will be able to spend the entirety of its $47 billion budget before the deadline on September 30th. This news comes after a flurry of grantmaking activity in August to make up for the significant obstacles faced in first half of 2025, including pauses in grant proposal evaluations, agency-wide layoffs, and new requirements for political appointee review. While the agency is nearing the pace of last year’s funding, a STAT report highlights that the agency will fund far fewer projects this year, regardless of if they spend the rest of their allocated budget. The number of R01 and R21 grants issued has dropped from 5,633 to 3,758 new projects. The decrease in the number of these awards that are critical to universities and medical centers is attributed to a new OMB mandate earlier this year that required a multi-year funding model. As such, more projects are being funded for multiple years up-front rather than being issued annually over several years. For health services researchers, the NIH’s commitment to fully spending its FY25 budget demonstrates hope that, even in a newly constrained funding environment, there is continued investment in critical health research. However, the new multi-year funding model creates an even more competitive funding environment that necessitates researchers engage in more strategic planning and collaboration to make a robust case to secure funding.
FDA Moves to Drop Expert Panel Reviews for New Drugs
The FDA is considering a shift from a decades-old policy of convening expert advisory panels to review drug applications. Beginning in 1972, these committees have been used to provide advice, review evidence, and vote on whether the FDA should approve various drugs, vaccines, and medical devices. George Tidmarsh, the head of the FDA’s Center for Drug Evaluation and Research, states that these committees are redundant and require significant effort for the agency that could be better allocated. Rather, the FDA plans to consult committees for broader regulatory issues affecting entire classes of drugs, rather than individual drug reviews. Critics of this move state that the removal of these committees reduces transparency to the public regarding how the FDA makes decisions and shields the agency from public scrutiny, especially since FDA actions that depart from committee votes can provoke public controversy and debate. This development comes at a time where the broader regulatory environment is increasingly making decisions uninformed by rigorous evidence. While this potential reduction in advisory committees would largely affect the drug approval process, for health services researchers it underscores the importance of increased vigilance and transparency to uphold the integrity of research, evaluation, and evidence.
California Ballot Measure Seeks to Rebuild Scientific Research Capacity
In a bill introduced Friday, California State Senator Scott Wiener and Assemblyman José Luis Solache propose $23 billion in bonds for state-dispersed grants and loans to universities, companies, and health care organizations. The lawmakers aim to replenish scientific research funding cut by the Trump administration by effectively creating a state scale institutional funder of scientific and public health research. The bill is considerably more aggressive than a similar effort proposed in Massachusetts for $400 million and dwarfs past bond measures in California, the more recent of which have had mixed success. Moreover, it would have to be passed by a supermajority of the Legislature before reaching California voters. Democrats do however have a legislative supermajority in the state, dominate the state’s electorate, and have passed similar ballot initiatives in the past, so there is reason for supporters to be optimistic.
Scientific research is a cornerstone of California’s economy. Funding from the National Institute of Health (NIH) in particular is essential to one of the state’s largest employers, the University of California system, which received the most funding out of any other NIH recipient in the country. This proposal comes up against the system’s entanglement with the Trump administration over their response to campus protests. While settling the dispute could cost the system more than $1 billion, the system’s president, James B. Milliken, sought support from the federal government. Nearly three dozen legislators wrote to Mr. Milliken expressing their support and encouraging him and other academic leaders to keep up their fight.
California’s bill and the letter from the Legislature signify support of state-lead efforts to protect science, research, and evidence despite federal actions. Health services researchers should join these efforts where possible and find hope in these efforts to continue research funding through new and innovative means.
Advocates Decry Planned Destruction of Contraceptives Worth $10 million
More than 70 reproductive health organizations have signed on to a letter asking the Trump administration to halt their plan to destroy $10 million of usable birth control products, including birth control pills, hormonal implants, shots, and IUDs. The letter, sent to Secretary of State Rubio, calls out the wastefulness of this plan, noting that many of these products do not expire until 2027-2031, and that destroying them would cost at least $167,000. The products were purchased by the United States Agency for International Development (USAID) prior to the administration’s shuttering of the agency earlier this year. Some health organizations have tried to purchase the still-usable supplies, which have been sitting in a warehouse in Belgium and were destined women and girls in five African countries, including those fleeing conflict or unable to afford care. The Trump administration has refused multiple purchase offers, while the State Department made a preliminary decision in August to destroy abortifacients in the supplies, despite experts noting that there is nothing that can induce abortion in the stockpile. Experts estimate that the destruction of these contraceptives would deny more than 1.4 million women and girls access to life-saving care.
Nearly Half a Million Subscribers: AcademyHealth Content Hits Healthcare Triage
At a time when evidence matters more than ever, AcademyHealth is helping broaden the reach of our community’s work through Healthcare Triage, the widely viewed YouTube show hosted by our CEO, Aaron Carroll. With nearly half a million subscribers, Healthcare Triage takes health services research and policy debates well beyond the HSR community, translating complex evidence into clear, engaging stories that resonate with the public.
Recently, AcademyHealth blog posts were featured on the show, connecting our members’ insights to national conversations about rural hospitals, science communication, and autism policy. This partnership gives researchers a powerful platform to amplify their work and highlight why evidence matters in people’s everyday lives.
Watch and share the episodes below—and don’t just keep them in the HSR family. They’re a great way to spread evidence-based insights to colleagues, friends, and networks outside the field:
- Rural Hospitals, Reduced Access, and the Big Beautiful Bill
- How "Follow the Science" Got Us Lost
- The Risks of a Federal Autism Registry
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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