On July 4, 2025, the “One, Large, Lovely Invoice Act” (OBBBA) was signed into legislation. Its backers hailed it as a automobile for progress, whereas critics referred to as it the quiet dismantling of America’s healthcare security web.
OBBBA slashes Medicaid and ACA subsidies whereas inflating the deficit with trillions in tax cuts. Tens of millions stand to lose protection, and safety-net hospitals will face new monetary instability. And rural well being techniques, already stretched to the breaking level, can be examined like by no means earlier than.
However there may be one other angle right here. There could also be a possible inflection level inside this sweeping laws.
The $50 billion Rural Well being Transformation Program (RHTP) is modest in comparison with the cuts surrounding it, nevertheless it forces rural America to do one thing our broader healthcare system has resisted for many years, and would do properly to be taught from: innovate out of necessity.
OBBBA is a stress check, and the end result is determined by how we reply.
Why U.S. healthcare is so laborious to repair
Let’s stage set. America’s healthcare system is dear, ineffectual, and formed by counterproductive incentives. We spend practically twice as a lot as different high-income nations, but outcomes lag behind. Power illness administration, maternal mortality, and life expectancy all inform the identical story: excessive price, low return.
One motive is the hole between conventional healthcare and well being tech. Well being tech has proven a willingness to innovate quickly. However conventional healthcare is official and laborious to penetrate, missing the urge for food for change that startups take as a right.
This creates a gulf the place well being tech builds the instruments, however conventional healthcare not often integrates them at scale. Hospitals typically function on 1-2% margins, leaving little room for experimentation. Their buildings reward stability over velocity and agility, making it extraordinarily troublesome to check, undertake, and scale new tech.
I’ve seen this gulf firsthand. As a important care and pulmonary doctor, I’ve labored inside the normal system, the place skinny margins and inflexible buildings go away little house for innovation. And as an entrepreneur, I’ve piloted expertise designed to make care extra environment friendly, solely to look at hospitals battle to undertake some very sensible options.
Contemplate Normal Catalyst’s recent $485 million purchase of Summa Well being by its Well being Assurance Transformation Company (HATCo). Summa is a big, nonprofit system in Ohio with hospitals, clinics, and a medical insurance arm. HATCo is popping it right into a for-profit testing floor for brand new applied sciences and care fashions.
The truth that a enterprise capital agency wanted to purchase a complete well being system simply to create a testing floor for innovation underscores the dimensions of the issue. It’s not that hospitals don’t see the worth of contemporary expertise; it’s that their working buildings, monetary realities, and regulatory obligations make speedy adoption practically not possible.
OBBBA widens this hole by destabilizing the system, nevertheless it additionally opens a door.
Rural fragility and the RHTP
Rural hospitals sit on the intersection of skinny margins, workforce shortages, and geographic limitations. Greater than 100 rural hospitals are already at risk of closure, and over 600 are thought-about weak nationwide. The whole system is fragile.
I feel the time period rural fragility is apt: a situation the place suppliers function so near the sting that even minor shocks can tip them into crisis.
In contrast to city or suburban techniques that may lean on diversification and endowments, rural suppliers lack a cushion. They typically don’t have Chief Innovation Officers, CMIOs, or capital budgets for brand new infrastructure. They depend on outdated digital techniques, their affected person quantity is small, and their payer combine is disproportionately Medicaid and Medicare. The situations that make them fragile additionally make them structurally proof against adopting trendy well being tech.
The RHTP, carved out within the OBBBA, makes an attempt to intervene at this breaking level. It dedicates $50 billion in grants and incentives over the following decade to assist rural suppliers modernize operations, undertake digital instruments, and pilot new care fashions. Whereas the greenback determine is dwarfed by the trillion-dollar Medicaid cuts surrounding it, this system forces a shift that rural suppliers can’t keep away from any longer.
Critics argue that $50 billion over a decade is a band-aid in comparison with the dimensions of Medicaid cuts. They’re proper. However this system’s significance isn’t in its uncooked measurement.
Its potential lies in its function as a forcing perform, compelling fragile techniques to rewire themselves for the longer term. If necessity is the mom of invention, rural fragility could be the mom of transformation.
By no means let an excellent disaster go to waste
RHTP is critical due to the commitments it forces. This system ties funding to transformation, requiring rural hospitals to improve digital infrastructure and allow interoperability, telehealth, and compliance techniques. And by subsidizing modernization, it lowers the monetary limitations which have saved rural techniques from adopting and scaling trendy instruments.
If deployed properly, RHTP funds might assist rural techniques lead in areas the place conventional well being has lagged:
- Digital-first care: Rural communities, the place distance makes in-person care impractical, might mannequin what virtual-first care actually appears like.
- Staff-based care because the norm: There are already nice examples of team-based care in main medical facilities, however rural settings might want to lean on this mannequin as doctor shortages have hit them the toughest.
- Trendy compliance and high quality techniques: Rural suppliers can not afford armies of directors. Adopting digital compliance instruments and embedding high quality assurance into day by day work, fairly than including layers of paperwork, might make oversight sustainable.
- Proper-sized services: Not each group wants a full-service hospital. Modular pressing care, power illness administration, and cell clinics might serve sufferers higher at decrease price.
Success gained’t be discovered by patching the outdated system. It’ll be about constructing one thing new underneath stress.
And if these interventions are deployed properly, the ROI might far outweigh the preliminary funding. Telehealth has been proven to avoid wasting sufferers $147 to $186 per visit in prevented journey and misplaced productiveness, whereas distant affected person monitoring applications have delivered a 22% positive ROI and diminished hospitalizations by 1000’s of {dollars} per affected person.
These are only a fraction of the outcomes that we might see from sensible implementation.
The paradox of fragility
What’s most weak will also be most transformative. Rural fragility is actual, however once more, necessity is the mom of invention. Rural suppliers can’t delay adoption. In the event that they don’t reinvent themselves, they’ll collapse.
For many years, well being tech firms have constructed instruments that promise better entry, effectivity, and high quality. However conventional healthcare has at all times been constrained by operational drag that retains promising applied sciences caught in pilot purgatory, or perceived solely as a luxurious.
RHTP might change this dynamic by tying survival to modernization. It forces rural techniques to open the door that has separated them from the well being tech innovators. So the query is: will conventional healthcare undertake the mindset of fast iteration and user-centered design that well being tech has embraced for years?
If RHTP succeeds, it might produce classes for the remainder of the nation. activate groups otherwise. construct high quality techniques with out pointless pink tape. make expertise the spine of supply as an alternative of an non-compulsory add-on.
The stakes are very excessive, but when achieved proper, rural well being might shift from being the canary within the coal mine to the proving floor for fashions that make your entire U.S. healthcare system extra environment friendly and extra patient-centered.
The selection that shapes the system
Clinging to our outdated fashions is equal to ready for failure. We have to embrace the instruments, group buildings, and supply fashions that this ongoing disaster calls for.
RHTP might signify the final greatest likelihood for rural America to innovate earlier than the security web tears utterly. For the nation, it might be the blueprint for escaping a system that’s overpriced and underperforming.
As a doctor, I’ve seen how disaster redefines the doable. And as an entrepreneur, I consider necessity could cause transformation. However most significantly, as somebody who has labored alongside sufferers, suppliers, and innovators, I do know the ingenuity and resilience on this area.
We’ve been given no alternative however to innovate, and it must occur quickly. Regardless of the difficulties we’re going through, I stay hopeful that we are going to seize this second to construct a system that delivers on the promise of healthcare: accessible and compassionate look after all.
Picture: Peshkova, Getty Photographs
Rafid Fadul, MD, MBA, is an completed digital well being govt, firm advisor, serial entrepreneur, and triple board-certified pulmonary important care doctor. An early adopter of telemedicine, Dr. Fadul was the founding Chief Medical Officer at Wheel Well being and continues to function an advisor for a number of well being tech firms and on the Board of Administrators for Ureteral Stent Firm, BestLife Holdings, and MedWish Worldwide.
Dr. Fadul is at the moment the co-founder/CEO of Zivian Health, a well being tech platform that gives end-to-end options for healthcare compliance, workforce administration, and scientific high quality. Dr. Fadul can be an adjunct professor at Johns Hopkins, educating programs in well being economics. He has printed extensively in scientific medication, well being economics, and digital well being, and has introduced nationally and internationally on the way forward for healthcare and the function of expertise in shaping it.
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