50 Billion Ways to Transform Rural Healthcare

Today is the deadline for all 50 states to apply for their share of $50 billion in federal funding under the Rural Health Transformation Program. It’s a sort of consolation prize, to be sure, but a short-term cash infusion like this doesn’t come along every day.

It all started with a last-minute addition to the One Big Beautiful Bill Act – an olive branch for rural-state lawmakers who understood that deep Medicaid cuts would push many small, struggling hospitals into insolvency. Sens. Lisa Murkowski and Susan Collins deserve credit for their leadership, but no one was prepared for the mad dash that followed.

OBBBA was signed into law on July 4, program details were released in mid-September, and Nov. 5 was set as the application deadline. In other words, from debut to deadline, states had only a matter of weeks to formulate spending plans for one of the biggest financial windfalls that rural healthcare has ever seen.

That was never going to be a simple process. If you ask 1,000 rural stakeholders about their top priorities for investing in healthcare, you’ll get 1,000 different answers. In fact, many states did just that –– putting out a Request for Information and inviting any and all comers to share their ideas.

At Rural Healthcare Initiative (RHI), we responded to more than a dozen of those state requests, offering to share what we learned in our just-completed rural sustainability blueprint for the State of North Carolina.

No one knows where the various states will land with their RHTP applications, but Georgia at least deserves credit for publishing all of the input it received in a single spreadsheet. It’s an interesting read for anyone who wants to know what rural health transformation efforts might look like.

By my count, there were more than 160 responses to Georgia’s RFI, encompassing the full gamut of rural healthcare, from specific conditions (hemophilia, heart disease, HIV) to specific provider types (pediatricians, nurses, community health workers). Investing in behavioral health was a common theme. There were dozens of technology proposals, numerous education proposals, and several ideas for expanding sites of care. I was also happy to see that some commenters went beyond healthcare delivery to stress the need for social supports including housing and food banks.

If other states received similar input, I can understand why leaders will have a hard time prioritizing their rural health investments. Our healthcare system has numerous problems, and the RFI process showed there are plenty of passionate people offering smart, interesting solutions. When good ideas abound, the temptation is to sprinkle a little money all around – or worse, to shower money on those with the biggest constituencies or best connections.

That’s no way to transform rural healthcare immediately, of course.

Faced with a similar challenge, North Carolina decided to take a step back in 2023, asking RHI to look at the big picture and offer a data-informed blueprint for effective and sustainable healthcare models in all of its 78 rural counties. We didn’t pick winners and losers. We simply used data to answer the question: What is the highest level of healthcare that rural regions can sustain under market conditions?

Five years from now, when RHTP expires and billions of dollars dry up, that question will still be as pertinent as it is today. True transformation will only happen when states match healthcare resources with the actual needs of rural residents – and that kind of sustainable balance requires a blueprint.

Of course, the blueprint will look different from state to state, but RHI can offer a few universal design principles based on what we learned in North Carolina:

1. Know the healthcare resources that are currently available in rural communities. This seems obvious, but reliable numbers are surprisingly hard to come by. We spent weeks building a detailed inventory of beds, providers, equipment, and other resources in every rural county. There is a perception of scarcity in rural healthcare, but we found that it is not always true.

2. Use primary and secondary data. Over the course of a year, RHI analyzed 70 gigabytes of data, including 1.6 million inpatient encounters and 47.2 million outpatient encounters. That analysis gave us unprecedented insights, but we followed up with in-person listening sessions plus a statewide survey. This combination research approach helped us understand where proposed solutions might run into attitudinal barriers.

3. Don’t assume anything. We saw this again and again in Georgia’s RHTP submissions – the assumption that we need more community health workers, more mobile services, or more fill-in-the-blank. But we were sometimes surprised in our North Carolina work when we let data lead the way. For instance, most people would assume that rural counties with the highest health needs have the fewest hospital beds, but we found just the opposite to be true. Adding more beds based on faulty assumptions would have been a costly mistake.

4. Recognize the regional nature of rural life. People in rural communities are used to traveling for all kinds of goods and services, and they consistently told us that they would drive farther for healthcare that they perceive as more specialized or more advanced. Understanding this regional reality is the key to providing effective, sustainable healthcare while avoiding wasteful services that will never be self-supporting.

The Centers for Medicare and Medicaid Services will announce its RHTP funding decisions by the end of the year, and cash will start flowing in early 2026. A temporary, $50 billion program will never replace permanent cuts to Medicaid – but still, it’s exciting to think about building a rural healthcare system specifically designed for today’s realities and tomorrow’s challenges.

I only hope that states will have a realistic blueprint before they drive the first nail.