Hospitals Cut Staff After Healthcare Bill
Hospitals around the U.S. are making cuts to staff and services after passage of the "big beautiful bill" — with some facilities reducing programs or closing departments entirely. The cuts are becoming a focal point for Democrats ahead of midterm elections. Patients face potentially longer wait times and reduced access to care, particularly in rural areas.
The "big beautiful bill," officially known as the One Big Beautiful Bill Act (OBBBA), was signed into law on July 4, 2025. The legislation, passed through the budget reconciliation process, allows for significant changes to federal spending and taxation. Key provisions include an estimated $900 billion to $1 trillion reduction in federal Medicaid spending over the next decade and alterations to the Affordable Care Act (ACA) marketplaces. The Congressional Budget Office (CBO) projected that the law's health provisions will lead to 11.8 million people losing their health insurance coverage by 2034. The bill introduces new work and community engagement requirements for some Medicaid recipients and increases the frequency of eligibility checks, which is expected to contribute to the coverage losses. In response to the anticipated funding cuts, specific hospitals have already begun to react. In Georgia, St. Mary's Sacred Heart Hospital closed its obstetric ward in October 2025, with a spokesperson stating the Medicaid cuts "solidified our decision." Similarly, Providence Seaside Hospital in Oregon also shuttered its obstetric ward in October, citing a "historic reset" influenced by the legislation. Layoffs have been announced across the country. Alameda Health System in California is laying off 296 employees, projecting an annual loss of over $100 million due to the act. Vanderbilt University Medical Center in Tennessee announced up to 650 layoffs, while UC San Diego Health eliminated over 200 positions. Children's National Hospital in Washington, D.C., laid off 70 non-clinical staff, linking the cuts to the Medicaid reductions in the OBBBA. In Colorado, Arkansas Valley Regional Medical Center is cutting about 5% of its staff, citing the bill's impact on rural providers. The legislation does include a $50 billion Rural Health Transformation Program to be distributed over five years to help offset the cuts. However, critics argue this amount is insufficient to counter the projected $155 billion decrease in federal Medicaid spending in rural areas alone. Urban safety-net hospitals are also expected to be significantly impacted. An analysis by the Harvard T.H. Chan School of Public Health found that 85% of the hospitals most vulnerable to the Medicaid cuts are in urban areas. These hospitals were not included in the rural relief funding. Hospital associations have warned that the funding reductions will lead to increased uncompensated care costs as more patients become uninsured. This financial pressure is expected to result in longer wait times, further service line reductions, and potentially more facility closures.
