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HHS official says meetings with small hospital CEOs highlighted ‘perverse incentives’ driving administrative costs
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Summary
Robert F. Kennedy Jr., identifying himself as “secretary for health and human services,” said a recent meeting with small nonprofit hospital CEOs showed incentives that push money into administration rather than patient care and urged rule changes the administration says could save “hundreds and hundreds of billions” annually.
Robert F. Kennedy Jr., identifying himself as “your secretary for health and human services,” said a meeting with hospital chief executives from rural and urban small nonprofit hospitals highlighted systemic incentives that, he said, direct resources toward administrative costs rather than patient care.
"The real fulcrum of of the meeting and what I really learned from it is about the perverse incentives that discourage these hospitals from treating patients and force them to spend the bulk of their resources on administrative costs," Kennedy said, adding that participants discussed "very specific ways to save hundreds and hundreds of billions of dollars annually" through what he described as "small common sense rule changes."
Kennedy said the gathering included CEOs from "rural and urban areas" and emphasized the hospitals were "smaller nonprofit hospitals" he called exemplary in patient treatment. He characterized shifting administrative burdens away from clinical care as "1 of the objectives of this administration," and described the proposals as an opportunity "to change the nature of health care very, very quickly."
The remarks were presented in a short recorded statement that the transcript identifies as "Produced by the U.S. Department of Health and Human Services." The transcript does not list the participating CEOs by name, provide specifics about the rule changes discussed, nor offer a timetable or formal policy text for the changes Kennedy referenced.
Kennedy framed the issue primarily as structural and regulatory: he said the incentives currently affecting small nonprofit hospitals discourage direct patient care and increase administrative spending. He did not enumerate which federal rules or payment mechanisms he had in mind, nor did the transcript include any concrete regulatory language, cost models, or an implementation plan.
The claim that the rule changes could save "hundreds and hundreds of billions of dollars annually" appears in Kennedy's statement; the transcript does not provide supporting data, source documents, or a breakdown of how that figure was calculated. The statement also does not record any questions from reporters, formal proposals presented to a rulemaking body, or an announced next step for publishing specific proposed rule changes.
Kennedy's remarks placed the suggested reforms in the frame of improving patient care and reducing administrative burdens for smaller nonprofit hospitals, but the transcript contains no record of votes, interagency memoranda, or legally binding actions arising from the meeting.
The U.S. Department of Health and Human Services is identified in the recording as the producer of the statement. The transcript does not specify a date, location, or list of attendees beyond Kennedy's general references to hospital CEOs.
