Federal funding cuts in health care will jeopardize patient outcomes and ultimately raise costs

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The current administration has articulated a goal of improving the nation’s health, often framed as a desire to “Make America Healthy Again,” emphasizing the importance of prevention. However, this stated objective appears to be in conflict with proposed and actual reductions in funding for public health initiatives, medical research and Medicaid — a critical health care program that provides coverage to millions of low-income Americans, including families, older adults and individuals with disabilities. Cuts to these areas are likely to result in worse health outcomes and increased health care costs in both the short and long term.

Federal funding matters in both preventive and reactive health care

Medicaid plays a vital role not only in ensuring access to necessary medical treatment but also in supporting prevention efforts at multiple levels. It helps fund primary prevention to keep people healthy and secondary prevention strategies crucial for managing chronic diseases and avoiding costly complications, especially among vulnerable populations. Attempts to provide short-term fiscal relief now threaten both pillars of the approach.

Lucienne Marie Ide, MD, PhD
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Primary prevention emphasizes wellness through diet, exercise, screenings and lifestyle interventions designed to keep chronic disease from ever taking root. Programs like the Diabetes Prevention Program exemplify this model, generating a 58% reduction in Type 2 diabetes risk through lifestyle changes alone. Despite decades of supporting data and measurable outcomes, the 30-year-old program’s recent loss of funding may essentially dissolve the continuous study and availability of this program to at-risk individuals.

Secondary prevention — the ability to diagnose and manage chronic conditions successfully, before complications escalate — is equally as important, since over 129 million Americans already have at least one chronic condition. The health care industry can’t afford to focus only on preventing disease while neglecting those who already live with it. Investing in prevention and effective chronic condition management can lead to substantial savings, as high costs associated with chronic diseases are often driven by treating complications rather than the initial diagnosis. For instance, managing diabetes has modest costs, but treating a complication like kidney failure can exceed $54,000 per person annually.

Threatened programs provide benefits from lifesaving care to scientific innovations

The key programs, organizations and studies now at risk deliver much more than care for vulnerable populations. Currently threatened programs and initiatives include the following:

1. Medicaid

Medicaid, jointly funded by federal and state governments, provides health care to more than 70 million Americans. However, current policies, like those introduced under proposed federal budget cuts, aim to scale back Medicaid spending by up to $880 billion over the next decade. If the full plan comes to fruition, we will see lack of health care coverage, reduced access to care, worsening health outcomes and financial strains on states.

Different states will be affected in different ways, but we can anticipate that all states will feel economic impacts, including job losses in the health care sector, closure of rural clinics and hospitals, and increased costs of care to the uninsured.

States that recently broadened Medicaid coverage, such as North Carolina and South Dakota — along with many others that expanded earlier under the Affordable Care Act — could face serious financial pressure if federal funding is pulled back. Without that support, the cost burden would shift heavily to the states and put their coverage gains at risk. In certain cases, it could even trigger automatic rollbacks. Some states, like Arizona, Illinois, Indiana and Montana, have trigger laws in place, which would force a reduction or end their expansion programs, leading to a disproportionate loss of coverage and undoing years of accessibility progress.

2. Public health and wellness advancements

The budget cuts also extend to wellness-focused entities like the Agency for Healthcare Research and Quality (AHRQ), which strives to enhance preventive care delivery by developing and providing tools, resources and materials to support health care organizations. The AHRQ’s leaders report being told during a March meeting with Department of Government Efficiency officials that the entity’s budget would be cut by 80% to 90%.

The move could impact programs like AHRQ’s Prevention and Chronic Care Program, which includes a widely used self-management support component that helps people with chronic conditions manage their daily health. Eliminating or shrinking AHRQ programs that have demonstrated both patient and financial benefit requires consideration as to whether that impact can be sustained with less support and overhead. Self-management support in primary care has been shown to improve health outcomes for people with chronic diseases while also boosting both patient and provider satisfaction. Programs to reduce hospital-acquired conditions have shown a $19.8 billion reduction in costs from 2010 to 2014.

Further, if foundational funding is reduced, the ability of health care providers to implement innovative solutions, like remote patient monitoring, to improve chronic disease management is severely hampered. Rural health centers or smaller systems with large Medicaid populations would face immense financial challenges. Organizations with diminished Medicaid reimbursement might struggle to operate at current levels, let alone find the resources to invest in and implement innovative tools for proactive care.
Digital innovation is at risk due to the same cuts impacting traditional care. These tools cannot effectively bridge the gap if the financial stability needed to adopt and operate them is eroded.

3. Medical research

Medical research stands as a silent casualty of shrinking federal budgets. Cutting-edge studies are being forced to halt promising projects due to funding directives. Limiting research slows innovation and effectively robs providers of future tools and treatments that could have saved or dramatically improved lives. In addition, reduced funding for public health and wellness programs threatens to worsen health outcomes for the current generation.

Even more concerning, deep cuts to medical research could have lasting effects on future generations. A prime example is the Nurses’ Health Study (NHS), which began in 1976 and is one of the longest-running prospective cohort studies. NHS has been instrumental in identifying risk factors for major chronic diseases like diabetes and cardiovascular disease, and in establishing the link between lifestyle, diet, and conditions such as heart attack and stroke. This research is ongoing, and decades of biological samples, data and yet-to-be-discovered insights are at risk if funding is withdrawn.

When preventive care disappears, emergency rooms fill up

When funding for health care programs shrinks, patients bear the brunt of the impact. Studies show that reductions in chronic care management and preventive measures lead to more emergency visits. Emergency rooms across the U.S. already handle roughly 144 million visits annually, accounting for about $76 billion in health care costs, with one in five adults making at least one visit per year. Without access to preventive care and primary care, many individuals are forced to use the emergency room as their primary care provider.

A lack of support in these areas is dangerous. What may seem like cost-saving measures will push health care costs upward as poorly managed conditions turn into medical emergencies. Over time, this effect actually widens the gap between short-term savings and long-term expenses.

Health care professionals have a vital role to play in amplifying these issues. It’s critical for the industry to advocate for sustainable funding, leverage technology in innovative ways and commit to making evidence-based care a reality for all patients. Investing now in health means avoiding unnecessary complications and costs later. Because in the end, cutting funding for early interventions doesn’t eliminate problems — it only ensures they grow, with consequences measured in both dollars and lives.

Lucienne Marie Ide, M.D., PH.D., is the founder and CEO of Rimidi, a digital health company that supports health care providers in the delivery of remote patient monitoring and chronic disease management with electronic health record-integrated software, services and connected devices. She brings her diverse experiences in medicine, science, venture capital and technology to bear in leading Rimidi’s strategy and vision, motivated by the belief that we can do so much better as individuals, in industry and in society. After completing her internship in obstetrics and gynecology at University of Pittsburgh Medical Center, she left clinical medicine to join the ranks of health care entrepreneurs who are trying to revolutionize an industry.