RFK Jr.'s Massive Federal Health Workforce Cut Could Take 'Decades To Rebuild', Warns Experts: 'We Cannot Accurately Assess Whether We Are Truly Making America Healthier' - Vanguard Health Care ETF (ARCA:VHT), iShares Biotechnology ETF (NASDAQ:IBB)

Experts raise alarms about Health Secretary Robert F. Kennedy Jr‘s decision to fire tens of thousands of federal workers, disrupting critical health data collection and research efforts.

What Happened: Kennedy’s sweeping layoffs have interrupted data collection on numerous health issues, ranging from cancer rates in firefighters to mother-to-baby transmission of HIV and syphilis. The cuts have also hindered research into future pandemics and the containment of current outbreaks, such as the worst measles outbreak in decades, as reported by POLITICO on Sunday.

Ursula Bauer, a former executive at the federal Centers for Disease Control and Prevention (CDC) told Fortune, "The forced exodus of highly skilled, highly educated researchers, scientists and professionals from the federal government is really just extraordinary…It is going to take decades to rebuild."

The Department of Health and Human Services (HHS) has confirmed a workforce reduction of 20,000 to Fortune, a nearly 25% cut from 82,000 to 62,000. This involves leading experts and top professionals in their fields, resulting in an organizational gap with no clear replacement plan in place.

The cuts have temporarily blocked over $11 billion in Covid-era grants to state and county health departments, which were being used for broader public health efforts like disease tracking and addiction treatment, reported Fortune.

Jerome Adams, who was a surgeon general during Trump's first term told POLITICO, "Without robust data and surveillance systems, we cannot accurately assess whether we are truly making America healthier."

Why It Matters: These layoffs were not unexpected. In March, Kennedy was planning a major overhaul of his department, including the elimination of 10,000 jobs and the closure of regional offices. The departments affected were those that handle disease outbreaks, approve new drugs, and offer insurance for the nation's poorest citizens.

Analysts have always expressed concerns over Kennedy’s appointment as U.S. Secretary of Health and Human Services, specifically regarding potential cuts to the National Institutes of Health funding. They warned that such cuts could lead to increased "uncertainty" in the healthcare sector, potentially impacting healthcare stocks.

Experts agree that the U.S. healthcare systems need a major overhaul, but ending departments and layoffs may not be the solution. They now warn that these cuts could have long-term implications, driving people away from careers in science and drying up the pipeline of domestic and international talent. This comes at a time when China is striving to become a biomedical and biopharmaceutical superpower.

Health Care Select Sector SPDR Fund XLV lost 5.56% in the last month, while iShares Biotechnology ETF IBB lost 12.84% during the same period. Meanwhile, Vanguard Health Care ETF VHT declined 6.04%.