2025 Healthcare Outlook: Key Policies and Industry Trends

Almost halfway through 2025, the healthcare policy landscape is dominated by looming funding cuts that could affect all sectors of healthcare, from workforce training to medical research to access to care. Healthcare organizations around the country are also keeping an eye on emerging technologies and challenges, including workforce challenges, generative AI’s evolving role in medicine, and the growing need for mental and behavioral health treatment. 

Read on to explore the healthcare regulations, policy debates, and opportunities that are keeping government affairs teams busy in 2025. 

Healthcare Policies to Watch in 2025

Federal Cuts to Medicaid

One of the biggest issues on the minds of healthcare leaders is the potential loss of hundreds of billions of dollars in funding to Medicaid over the next 10 years under the GOP’s budget bill for fiscal year 2025. 

Tim Nanof, executive vice president for policy and government affairs at the American Nurses Association (ANA), says his organization is focused on educating nurses about the potential impact of the funding cuts, including job losses and reduced access to care for patients, and asking nurses to reach out to their elected officials.

Laura Appel, executive vice president of government relations and public policy at the Michigan Health & Hospital Association (MHA), says her organization is concerned about the cuts leading to the loss of service lines like labor and delivery or inpatient psychology in rural areas, or complete hospital closures. “When those units close, they close for everyone,” Appel says. “Cuts to care are cuts for everybody.”

Drug Pricing Disputes

The 340B Drug Pricing Program, the federal drug discount program for safety-net hospitals and clinics, is the subject of a wave of legislation at the state level, as states look to fight back against drug manufacturers who seek to restrict the availability of discounted drugs to certain pharmacies. 

At least 30 states, including Michigan, have pending bills aimed at protecting covered entities against manufacturer 340B pricing restrictions, and eight have already passed a similar bill. Drug manufacturers say those restrictions help to prevent duplicate discounting and unlawful distribution of 340B drugs to nonpatients. 

Appel says her organization is supporting Michigan Senate Bill (SB) 94, which would protect the program, in order to protect the financial security of many hospitals throughout the state.

“In rural areas, fixed costs are high for staff, equipment, and supplies,” Appel says. “Those costs exist no matter how many people come to the emergency department on any given day. Programs like 340B reduce the costs and help offset the cost of care for people who can’t afford it.”

Medical Research Funding Cuts

President Trump’s proposed 2026 budget includes a proposal to consolidate the NIH’s 27 institutes into eight, eliminating research institutes like the National Institute of Nursing Research. Nanof says the ANA strongly opposes the consolidation, noting that the NINR is the only research institution focused on nursing. “When you’re a freestanding institute, you have more autonomy. You have the ability to control the research agenda,” Nanof says.

The ANA is not alone in its opposition to the cuts. On May 6, the American Association for Cancer Research called on Congress to reject the proposed budget, saying it would have serious negative consequences, “and would destabilize our nation’s medical research enterprise in all aspects, including halting critical clinical trials, disrupting the careers of cancer researchers, and jeopardizing patient access to new treatments.”

Top Healthcare Trends and Opportunities in 2025 

Labor Shortages

Persistent workforce shortages remain a top concern across healthcare. By 2037, the National Center for Health Workforce Analysis projects a 13 percent shortage of registered nurses (RNs) in rural areas and a 5 percent shortage in metro areas. Physician shortages are expected to be even more severe: 60 percent in rural areas and 10 percent in metro areas.

Efforts to grow the healthcare workforce are hindered by two key factors: potential federal training cuts and local housing challenges. The White House’s proposed FY2026 budget would eliminate nearly all Title VIII Nursing Workforce Development Programs. In FY2024, that program provided $305.5 million in funding that supported over 24,000 nurses, students, and faculty, according to the American Association of Colleges of Nursing. With a projected national RN shortfall of 208,000 by 2037, the ANA warns this move could significantly worsen the crisis.

At the state and local level, healthcare organizations are increasingly turning to housing advocacy as a workforce strategy. In Michigan, for example, Appel’s organization is addressing pipeline challenges through tuition and loan repayment advocacy, early-career engagement, and pushing for expanded access to affordable housing. “Housing costs are high, and that puts a damper on being able to attract a workforce,” she says.

Generative AI in Healthcare

As software companies explore the use of generative AI in healthcare, regulators are beginning to respond. Oregon is considering a first-of-its-kind bill, HB 2748, that would prohibit nonhuman entities, such as AI software, from using the title "nurse" or similar designations.

The American Nurses Association supports the proposed restrictions, which align with its position that generative AI can be a helpful monitoring tool in nursing but should not replace human judgment. “How you name something and how you talk about it influences how it’s used and how it’s perceived,” says ANA’s Nanof. “We want to ensure consumers clearly understand the nurse’s role, the AI’s role, and what oversight there is.”

Mental Illness and Behavioral Health

Mental and behavioral health is a growing concern for many healthcare organizations. Appel says her organization recognizes the need to develop new models of care, since the workforce is just as strained in behavioral health as it is in other disciplines. “It’s hard work, and it’s not highly promoted,” she says. “You see billboards about the best cancer care in the state. You don’t see a billboard that says ‘If you’re mentally ill, come to us.’”

One initiative the MHA is leading aims to expand access to Peer Recovery Coaching services in hospitals with $2.5 million in grants from the Michigan general fund. The program seeks to pave the way for a future Medicaid code that would allow hospitals to get reimbursed for those services. However, Appel notes that, like almost all other aspects of healthcare policy, mental health ties back to the proposed Medicaid cuts, since Medicaid is the largest payer for behavioral health needs in Michigan. 

Stay Up-to-Date on Healthcare Policy and Trends

Under the Trump administration, the U.S. healthcare policy landscape is changing daily — and sometimes even hourly — making it more important than ever to stay up-to-date on the latest changes. 

PolicyNote delivers real-time insights into legislation and regulation that impact the healthcare industry. PolicyNote helps you anticipate changes, align your strategy, and advise stakeholders with confidence. Request a demo to learn more.