A proposal by the Trump administration to reduce the size of grants for institutions conducting medical research would have far-reaching effects, and not just for elite universities and the coastal states where many are located.

Also at risk could be grants from the National Institutes of Health to numerous hospitals that conduct clinical research on major diseases, and to state universities across the country. North Carolina, Missouri and Pennsylvania could face disproportionate losses, because of the concentration of medical research in those states.

In the 2024 fiscal year, the N.I.H. spent at least $32 billion on nearly 60,000 grants, including medical research in areas like cancer, genetics and infectious disease. Of that, $23 billion went to “direct” research costs, such as microscopes and researchers’ salaries, according to an Upshot analysis of N.I.H. grant data.

The other $9 billion went to the institutions’ overhead, or “indirect costs,” which can include laboratory upkeep, utility bills, administrative staff and access to hazardous materials disposal, all of which research institutions say is essential to making research possible.

The N.I.H. proposal, which has been put on hold by a federal court, aims to reduce funding for those indirect costs to a set 15 percent rate that the administration says would save about $4 billion a year. The Upshot analysis estimates that a 15 percent rate would have reduced funding for the grants that received N.I.H. support in 2024 by at least $5 billion. The White House said the savings would be reinvested in more research, but the rate cuts would open up sizable budget holes in most projects at research institutions.

It is not clear whether those organizations can fill the gaps with other funding sources or by shifting how they apply for grants. Instead, many officials at universities and hospitals have said that they may have to pull back on medical or scientific research.

“It’s not an overstatement to say that a slash this drastic in total research funding slows research,” said Heather Pierce, senior director for science policy at the Association of American Medical Colleges, which has sued along with other education and hospital associations to block the policy. And slower scientific progress, she said, would affect anyone who depends on the development of new treatments, medical interventions and diagnostic tools.

We estimate that virtually all universities and hospitals would see fewer funds on similar projects in the future. The 10 institutions that receive the most money from N.I.H. stand to lose more than $100 million per year on average.

To understand how the change would work, let’s look at one grant for about $600,000 sent last year to the University of Alabama at Birmingham to study whether exercise can improve memory for people with epilepsy.

The calculation above, which we have repeated for every grant paid last year, is a bit simplified. In reality, the researchers would lose even more money than we’ve shown, because of the way indirect funding is calculated (see our methodology at the bottom of this article).

Our analysis also makes some other conservative assumptions given the policy’s uncertainty. We assume, for instance, that the new 15 percent rate is a flat rate that all grantees would receive, and not a maximum rate (a distinction left unclear in the N.I.H. guidance). We also assume that the change applies not just to institutions of higher education, but also to all kinds of grantees, including hospitals.

In a statement, the White House indicated it would reserve any savings for additional research grants. “Contrary to the hysteria, redirecting billions of allocated N.I.H. spending away from administrative bloat means there will be more money and resources available for legitimate scientific research, not less,” said Kush Desai, a White House spokesman.

The N.I.H. announcement, however, coincides with the Trump administration’s moves to cut spending across the government, and with the N.I.H.’s withholding of funding for grants — their direct and indirect costs alike — in apparent conflict with separate court orders.

The N.I.H. guidance document includes a number of conflicting statements and statistics the Upshot could not reconcile. The N.I.H. also declined to answer questions about the policy and about its public-facing data tracking grant spending.

The N.I.H. since 1950 has provided these overhead funds in a formulaic way, and since 1965, the government has used a rate individually calculated for each institution. Federal officials review cost summaries, floor plans and other information to determine that rate. That number can be higher for institutions in more expensive parts of the country, or for those that use more energy-intensive equipment. The proposal from the Trump administration would set aside those differences in standardizing the rate at 15 percent for every grantee.

The lists below estimate what would have happened to the 10 universities and hospitals that received the most N.I.H. grant money in the 2024 fiscal year, if the formula change had been in effect then.

If courts allow the change to move forward, some of its consequences are hard to predict.

Advocates for the policy change note that these organizations receive numerous other federal subsidies. Most universities and research hospitals are nonprofits that pay no federal taxes, for example. The N.I.H. announcement also noted that these same institutions often accept grants from charitable foundations that offer much lower overhead rates than the federal government, a signal that universities and hospitals willingly pursue research opportunities with less supplemental funding.

Because the indirect payments are based on broad formulas and not specific line items, critics say institutions may be diverting these federal dollars into unaccountable funds to pay for programs that taxpayers can’t see, such as the kinds of diversity, equity and inclusion programs targeted by the Trump administration.

“That’s how you get things like the ability of administrators to use larger overhead pools of money to build out D.E.I. bureaucracies, or to fund Ph.D. programs in the humanities,” said Jay Greene, a senior research fellow in the Center for Education Policy at the Heritage Foundation, a conservative research group. Mr. Greene was the coauthor of a 2022 article urging the N.I.H. to cut or eliminate indirect grant funding. But he did not have specific examples to cite of research funds being spent in this way.

Researchers say the indirect funds have a branding problem, but are a necessary component of research.

“The term ‘indirect costs’ or the alternative term ‘overhead’ sounds dangerously close to ‘slush fund’ to some people,” said Jeremy Berg, who was the director of the National Institute of General Medical Sciences at the N.I.H. from 2003 to 2011. “There are real costs somebody has to pay for, and heating and cooling university laboratory buildings is a real cost.”

Some grant recipients already receive low overhead payments, but a large majority of them currently receive more than 15 percent, meaning they will need to make budgetary changes to absorb the loss. Among the 2024 grants that we analyzed, institutions that received more than $1 million in N.I.H. support got an average of 40 cents of indirect funding for every dollar of direct funding.

Universities and hospitals may adjust their overall budgets to keep supporting medical research by cutting back on other things they do. Some might be able to raise money from donors to fill the shortfalls, though most universities are already raising as much philanthropic money as they can.

But many research institutions have said they would adjust by simply doing less medical research, because they would not be able to afford to do as much with less government help.

Universities and hospitals might also shift the kinds of research they do, avoiding areas that require more lab space, regulatory compliance or high-tech equipment, and focusing on types of research that will require them to provide less overhead funding themselves. That may mean disproportionate reductions in complex areas of research like genetics.

Those effects may be spread unevenly across the research landscape, as some organizations find a way to adjust, while others abandon medical research altogether.

We’ve compiled a list of institutions that received at least $1 million in N.I.H. funding in the 2024 fiscal year, along with our estimates of how much less they would have gotten under the new policy. Most of these institutions are universities or hospitals, but there are also some private companies and nonprofit research groups. Our numbers tend to be underestimates of the cuts.