State Health Policy Leadership: Navigating Rough Seas  

An eager ensign inquired why his naval captain asked for his red shirt every time he went in battle. 

“Ah,” the captain said. “That is so if I am struck, my people do not see me bleed.” 

The ensign was impressed by the captain’s courage. The next day, it was his duty to announce to the captain that an enormous enemy flotilla had been spotted in one direction, a band of rapacious pirates in another, and that dark storm clouds loomed on the horizon. 

“Ensign,” the captain sighed. “Fetch me my red shirt….and my brown pants.” 

With the new current federal administration and the recent passage of HR1/OBBA, the work of state health policy leaders has indeed become harder — if not downright intimidating.   More than fashion, however, leaders will need both principles and strategies to navigate dangerous waters. 

Storms and Attacks 

It is important to appreciate the scale of the challenges states will face in the coming years in ensuring opportunities for healthy lives for all. With its barrage of executive orders, grant and contract revocations, staffing cuts and agency reorganizations, the Trump Administration has abrogated significant responsibilities for the health and safety of populations and left it to states to determine what services to continue and how to do so. Some gaps will not be filled. States, for instance, simply do not have the capacity to do the work of the 2,400 employees  of the Centers for Disease Control and Prevention who were let go this year or replace $4 billion in CDC funding reductions proposed in in the administration’s 2026 budget.  

Not to be outdone by the Administration, Congress added Medicaid and SNAP funding and coverage cuts to states’ challenges with the passage of HR1 in July.  

In total, the Congressional Budget Office estimates states will see a 14% reduction in federal support for Medicaid in the next 10 years as a result of HR1, with an almost threefold variation in impact by state (See KFF Figure). At the same time, tighter Medicaid eligibility requirements, the expiration of COVID-era Affordable Care Act exchange subsidies, and more restrictive exchange enrollment rules are estimated to increase the number of uninsured people in the country by at least 16 million over the same period (a 60% increase over 2024 levels), perhaps more if rising premiums cause many healthy people to leave the exchanges.  

O Captain! My Captain! 

In Milbank’s state health policy leadership programs, we talk a lot with program participants about the distinction between technical leadership challenges — that require subject matter expertise and professional skills, like budgeting and analysis — and adaptive leadership challenges, which depend upon on systems-level thinking, vision building, shifting value sets, and strategic planning. 

If there ever was an adaptive leadership challenge, it is the one state health officials will face in the coming years.  

The potential harms to the health of state populations are enormous. Life expectancy in the country, which is significantly lower than that of peer nations, has barely rebounded from steep COVID-era declines. Differences in health status by demographic characteristics and geography persist. Yet federal funding has been eliminated for maternal and child health, violence prevention, chronic conditions, and opioid abuse prevention and treatment, which help to address the drivers of these poor outcomes. And Medicaid coverage, which has likewise been shown to improve mortality, will shrink. 

More is being asked of the small groups of public sector officials, with fewer resources. Beyond uniform changes, how might their leadership proceed? Here are a few principles to consider:  

Muster the team. “Give me six hours to chop down a tree and I will spend the first four sharpening the axe,” Abraham Lincoln reportedly said. The blade to sharpen here is the team of supporters and allies that must be gathered to take on the challenge. This is leadership work. Some team members will be from across government and others in the community. What will unite them is the threat they sense to things they hold dear.

Populations not providers. This is the first significant retrenchment in state health and human services programming since the Great Recession of 2008. The Affordable Care Act and even the COVID pandemic years were periods of significantly increased public funding for health care. That spending has engendered a delivery system that depends on this money. Officials in the coming months and years will be besieged by health care providers threatening employee layoffs and facility closures if their funding is not maintained or increased.  

Providers’ interests, however, are not the same as those of people receiving services and the state’s job is not to keep them doing what they have been doing  Policy is fundamentally about prioritizing resource allocations, and programs should be funded based on evidence of what will address the identified needs, not the claims of well-connected lobbyists, providers defending their revenue streams, or even individual patient’s stories.   

Finally, government should not skimp on oversight of the programs and the providers that deliver them. Health care comprises 20% or more of most local economies, and constitutes two of the top three government expenditure categories. As they do for their banks and insurers, states should conduct their own analyses to assess the financial health of health providers and adequacy of payments, and not rely on anecdotes and unsubstantiated claims.  

Processes that Inspire Trust…Implemented with Craft. Public trust in government is cratering but good leadership can reestablish it. Transparency, humility, persistence, accountability and consistency, it turns out, are not only good practices for building healthy relationships but also for trustworthy deliberative processes. Leaders must model these attributes in their work, and embrace strategy as well. What evidence-based analysis — articulated with authority — will make the case for prioritizing a particular need and response? How can strategic communications and efforts to include the voices of affected groups — who often lack access to the tables where these discussions occur — balance the scales of power and build public support?    

Learn from Others. States are often convinced of their particularity. More work, fewer resources, and a weakened federal partnership intensify the instinct for state officials to muddle through on their own. One of the lessons from COVID — a time of similar stress on states — however was that these occasions are when collaboration and solidarity with colleagues, particularly in the same geographic region, are most needed to identify innovative practices and share services.  

Perspectives and Hope. Regardless of the uniforms they wear —  red, blue, or even brown — leaders must remind their colleagues of both the threats and the opportunities presented; that governments and communities have weathered periods of retrenchment and conflict before — whether it was the Reagan-era privatization of public services, Bill Clinton’s pledge to “end welfare as we know it,” or the 2008 recession that increased the number of people needing public services just as tax collections decreased. Yes, it will be rough, but we have seen storms before.  

Perhaps most importantly, leaders must create a sense of purpose and hope — for both the organizations they lead and the people they serve. They must communicate that the work they are directing is important; that improvement is possible; and hard things are worth doing well. 

The hundreds of government staff who apply to the Milbank Memorial Fund’s leadership programs remind us at the Fund that there is meaning in public service beyond mere status or salary. It’s found in the work of stewarding limited resources and making difficult choices to help all people to thrive. One can make a difference. 

These current and future leaders also give us hope. Through flawed yet functioning governments that work to provide security, services and opportunities, individuals and families in local communities — regardless of the national storms of polarization, posturing, and pusillanimity — will indeed work to make things better for themselves and one another.