On July 4, 2025, the “One, Large, Lovely Invoice Act” (OBBBA) was signed into regulation. Its backers hailed it as a car for progress, whereas critics known 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. Thousands and thousands stand to lose protection, and safety-net hospitals will face new monetary instability. And rural well being programs, already stretched to the breaking level, shall be examined like by no means earlier than.
However there’s 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, however 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 take a look at, and the end result relies on how we reply.
Why U.S. Healthcare Is So Onerous to Repair
Let’s stage set. America’s healthcare system is pricey, ineffectual, and formed by counterproductive incentives. We spend almost twice as a lot as different high-income nations, but outcomes lag behind. Persistent illness administration, maternal mortality, and life expectancy all inform the identical story: excessive price, low return.
One cause 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 arduous to penetrate, missing the urge for food for change that startups take with no consideration.
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 constructions reward stability over pace and agility, making it extraordinarily troublesome to check, undertake, and scale new tech.
I’ve seen this gulf firsthand. As a essential care and pulmonary doctor, I’ve labored inside the standard system, the place skinny margins and inflexible constructions depart little area for innovation. And as an entrepreneur, I’ve piloted expertise designed to make care extra environment friendly, solely to observe hospitals battle to undertake some very sensible options.
Take into account Normal Catalyst’s latest $485 million buy of Summa Well being by means of 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 whole 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 constructions, monetary realities, and regulatory obligations make speedy adoption almost inconceivable.
OBBBA widens this hole by destabilizing the system, however it additionally opens a door.
Rural Fragility and the RHTP
Rural hospitals sit on the intersection of skinny margins, workforce shortages, and geographic obstacles. Greater than 100 rural hospitals are already prone to closure, and over 600 are thought of susceptible 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 disaster.
Not like city or suburban programs 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 programs, their affected person quantity is small, and their payer combine is disproportionately Medicaid and Medicare. The circumstances that make them fragile additionally make them structurally immune to adopting fashionable 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 subsequent 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 dimension.
Its potential lies in its function as a forcing operate, compelling fragile programs to rewire themselves for the long run. If necessity is the mom of invention, rural fragility is perhaps the mom of transformation.
By no means Let a Good Disaster Go To Waste
RHTP is important 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 programs. And by subsidizing modernization, it lowers the monetary obstacles which have stored rural programs from adopting and scaling fashionable instruments.
If deployed correctly, RHTP funds may assist rural programs lead in areas the place conventional well being has lagged:
- Digital-first care: Rural communities, the place distance makes in-person care impractical, may mannequin what virtual-first care actually appears like.
- Crew-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.
- Fashionable compliance and high quality programs: Rural suppliers can not afford armies of directors. Adopting digital compliance instruments and embedding high quality assurance into each day work, fairly than including layers of forms, may make oversight sustainable.
- Proper-sized services: Not each group wants a full-service hospital. Modular pressing care, continual illness administration, and cell clinics could serve sufferers higher at decrease price.
Success received’t be discovered by patching the outdated system. It’ll be about constructing one thing new underneath strain.
And if these interventions are deployed properly, the ROI may far outweigh the preliminary funding. Telehealth has been proven to avoid wasting sufferers $147 to $186 per go to in averted journey and misplaced productiveness, whereas distant affected person monitoring packages have delivered a 22% constructive ROI and diminished hospitalizations by hundreds of {dollars} per affected person.
These are only a fraction of the outcomes that we may see from sensible implementation.
The Paradox of Fragility
What’s most susceptible can 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 may collapse.
For many years, well being tech firms have constructed instruments that promise better entry, effectivity, and high quality. However conventional healthcare has all the time been constrained by operational drag that retains promising applied sciences caught in pilot purgatory, or perceived solely as a luxurious.
RHTP may change this dynamic by tying survival to modernization. It forces rural programs 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 may produce classes for the remainder of the nation. Find out how to activate groups otherwise. Find out how to construct high quality programs with out pointless pink tape. Find out how to make expertise the spine of supply as an alternative of an non-compulsory add-on.
The stakes are very excessive, but when executed proper, rural well being may shift from being the canary within the coal mine to the proving floor for fashions that make the whole U.S. healthcare system extra environment friendly and extra patient-centered.
The Alternative That Shapes the System
Can we cling to outdated fashions and anticipate failure, or can we embrace the instruments, workforce constructions, and supply strategies that this disaster calls for?
RHTP could signify the final greatest probability for rural America to innovate earlier than the security web tears fully. For the nation, it may very well be the blueprint for escaping a system that’s overpriced and underperforming.
As a doctor, I’ve seen how disaster redefines the potential. 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 discipline.
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 take care of all.
About Rafid Fadul, MD, Co-Founder & CEO, Zivian Well being
Rafid Fadul, MD, MBA, is an achieved digital well being govt, firm advisor, serial entrepreneur, and triple board-certified pulmonary essential care doctor. 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 can also be an adjunct professor at Johns Hopkins, educating programs in well being economics.
