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April 3, 2025 – Last week, the US Department of Health and Human Services (HHS) announced that it will undergo a major restructuring and plans to eliminate 10,000 employees on top of 10,000 HHS employees who have already departed (20,000 total), thereby reducing the workforce from approximately 82,000 to 62,000. While HHS released a fact sheet highlighting its general restructuring plans, there is much that we still do not know about what the final HHS “product” will look like. To help me lay out some of the as-yet-unanswered questions, I’m bringing in my colleague Parashar Patel.
Firings have begun, with thousands of termination notices going out this week. While there have been numerous reports about where many of the staffing cuts were made, we are still taking stock of the extent of the terminations.
The fact sheet, released before the firings began, had provided a high-level overview of 7,400 of the 10,000 positions to be eliminated:
Thus, at the time of the announcement, 2,600 staff cuts were still unaccounted for, meaning they could have occurred anywhere else across HHS. HHS made it clear that cuts would exclude critical staff such as FDA inspectors, infectious disease specialists, and those working on the Medicare and Medicaid programs. Politico initially reported that the 300 CMS employees cut would include 30 people at the Office of Minority Health and 200 at the Office of Program Operations and Local Engagement. The latter “works with providers and health plans that serve Medicare recipients to ensure they’re in compliance with CMS requirements and helps manage case work for Medicare Advantage and Affordable Care Act marketplace patients.”
On the same day that it announced its restructuring, HHS also stated in a notice to a federal union that the reduction in force (RIF) “is primarily aimed at administrative positions including human resources, information technology, procurement, and finance. The RIF will also target roles in high-cost regions and employees in programmatic areas that have been determined to be redundant or duplicative with other functions in HHS or across the federal government.”
Further, HHS also announced that it would consolidate the department’s 28 divisions (includes agencies such as CMS and FDA, and HHS offices such as the Office of the Assistant Secretary of Legislation) into 15, cut five of the 10 regional offices, and centralize core administrative functions.
Thus, we had assumed that some of the staff who were to be let go may have perceived overlapping administrative or human resources functions and may be deemed no longer necessary if they are currently working in one of the offices or agencies that is being restructured (discussed more below). Further, we had assumed that some of the people working in the 5 regional offices that will be closed, especially those in “high-cost areas,” also would lose their jobs.
However, we are now learning that the cuts went above and beyond what many had anticipated, with whole offices and divisions eliminated. Since the announcement and fact sheet were not specific about who would get fired, many employees (or their managers) had little to no clue that their job was in jeopardy right up until they received the RIF notice.
All in all, 10,000 is a lot of people, and it may take a while to sort out who exactly lost their jobs and what impact that will have on HHS programs and activities.
HHS announced the following major structural changes to HHS:
To state the obvious, many of these changes are easier said than done. At HHS there are two overarching types of entities: staff divisions that operate under the umbrella of the secretary’ office, and operating divisions or agencies that operate programs and services. The new offices that HHS plans to create include both. For example, the Administration for a Healthy America combines one staff division (OASH) with two entire operating divisions (HRSA and SAMHSA), and two subdivisions with two other operating divisions (ATSDR is currently part of CDC, and NIOSH is currently part of NIH).
Why does this distinction between staff divisions and operating divisions matter? It matters because the HHS secretary has significant control over deciding specific budgets and tasks for staff divisions, while Congress appropriates funding for operational divisions. Combining whole operating divisions or even parts of them may pose challenges in terms of combining different funding streams, appropriately spending appropriated funds, and ensuring that all mandated congressional requests are fulfilled. While combining different funding streams may be administratively challenging, it will no doubt give the secretary’s office greater control over spending. Similarly, combining legislative, human resources, and other support functions will give the secretary’s office greater control over legislative strategy, communications, and personnel decisions within the newly restructured operating divisions. In short, the secretary will have a greater ability to control the vision and direction of HHS policies and initiative.
Who Sits Where, and Who Doesn’t Have a Chair?
In combining different offices and agencies, HHS will have to figure out what roles the remaining staff will have. For example, will staff currently working at HRSA or SAMHSA have similar roles in the new Administration for a Healthy America, or will they have completely different responsibilities and be asked to work on different programs? Will staff currently in supervisory and other leadership roles maintain those positions, or will they be promoted or demoted? To use a corporate analogy, mergers and acquisitions (hostile or otherwise) typically result in RIFs because of overlapping responsibilities and functions. We would expect the number of leadership positions to be reduced substantially.
If one were to compare staff divisions and operating divisions to onions with many layers, then HHS has stated that it wants to peel apart the layers, slice and dice some of them, then put portions of the onions back together into something completely different (let’s say an omelet). However, HHS has not yet said what layers will go into the new creation or what else HHS will add to the omelet (besides eggs). Things could get messy as HHS tries to compile the ingredients and start actually cooking.
Timing
HHS has just announced that it plans to make the omelet, but it has yet to start cutting the onions, cracking the eggs, and combining these and other ingredients. How long will that take? While HHS has eliminated staff positions fairly quickly, it has not provided a timeframe for creating the new HHS entities. Speed simply may not be possible, and going too quickly could result in a bad omelet. Parashar and I, having worked at CMS and HHS, respectively, can tell you that it can take a lot of time to create new government offices or agencies, not just from an administrative and human resources perspective, but also because it requires carefully mapping out each new organizational structure and deciding who will fill key roles. While we can’t put a timeframe on that, it could be months before the Administration for a Healthy America, the Office of the Assistant Secretary of Enforcement, and the Office of Strategy are formed and start functioning smoothly.
And if it takes months for the omelet to cook, what happens to existing programs, policies, and initiatives? Will the staff in the various office and agencies still carry out their current responsibilities (if the offices are still intact after the RIF), or will they stop working on some activities and focus on the restructuring effort? If programs and services are paused, how will that impact the individuals and organizations that rely on them? Will statutorily required activities be paused or terminated? If so, what are the implications for external organizations and people that rely on these legally required services?
These are just some of the many questions that we have as the HHS restructuring begins. But two very important questions that we haven’t yet posed are what the omelet will taste like at the end and whether it will be worth the effort it took to make. In other words, will the restructuring achieve HHS Secretary Robert F. Kennedy Jr.’s articulated goals of making the department more efficient, reducing costs, and being best equipped to Make America Health Again? Rather than jumping to conclusions before we sit down for breakfast, we advise waiting to see (and taste).
Until next week, this is Jeffrey (and Parashar) saying, enjoy reading regs with your eggs.
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Until next week, this is Jeffrey (and Parashar) saying, enjoy reading regs with your eggs.
