HHS Restructuring Overhauls Federal Health Landscape

# HHS POLICY PULSE: JUNE 2025 EDITION

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Welcome to HHS Policy Pulse, your quick briefing on the latest from the Department of Health and Human Services. I'm your host, and today we're diving into the significant changes reshaping America's healthcare landscape.

Breaking this week: HHS has announced immediate steps to address drug pricing concerns. This comes amidst a sweeping reorganization that's dramatically transforming the department.

Since April, HHS has been implementing a major reduction in force, consolidating its 28 divisions into just 15 as part of the Administration's efficiency push. The restructuring plan includes creating a new "Administration for a Healthy America" to coordinate health resources for low-income Americans.

The workforce reduction is substantial - approximately 10,000 employees are being cut, bringing HHS from 82,000 to 62,000 staff members. Key agencies facing cuts include the FDA losing 3,500 employees, the CDC losing 2,400, and the NIH losing 1,200.

HHS Secretary assured stakeholders, "These changes will make HHS more responsive and efficient, while ensuring Medicare, Medicaid, and other essential health services remain intact."

On the regulatory front, HHS is implementing President Trump's "10-to-1" deregulation initiative, eliminating at least ten existing regulations for every new one introduced. A public comment period opened May 13th and runs through July 14th, giving stakeholders the chance to recommend which regulations should be targeted.

The department has also changed its approach to rulemaking, limiting circumstances requiring public comment periods before finalizing rules. This includes waiving notice-and-comment procedures for matters related to grants, benefits, and contracts.

For healthcare providers and patients, these changes signal a dramatic shift in how federal health programs operate. Hospitals and clinics may see reduced regulatory burdens, but advocates worry about potential impacts on program oversight.

State health departments will need to adapt to a more streamlined federal partner with fewer staff and resources. Meanwhile, businesses in the healthcare space should prepare for a rapidly changing regulatory environment.

If you want to participate in shaping these changes, submit comments at regulations.gov/deregulation by July 14th. The FY2026 payment rules for various healthcare facilities also have similar regulatory relief requests for information due June 10th.

That's all for this edition of HHS Policy Pulse. Join us next week as we continue tracking the transformation of America's healthcare system.

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