On July 4, 2025, the “One, Large, Stunning Invoice Act” (OBBBA) was signed into regulation. Its backers hailed it as a automobile for development, whereas critics referred to as it the quiet dismantling of America’s healthcare security internet.
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 techniques, already stretched to the breaking level, can 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, but it surely forces Rural America to do one thing our broader healthcare system has resisted for many years, and would do effectively to be taught from: innovate out of necessity.
OBBBA is a stress take a look at, and the end result depends upon how we reply.
Why U.S. Healthcare Is So Arduous to Repair
Let’s degree 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. Persistent illness administration, maternal mortality, and life expectancy all inform the identical story: excessive value, 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 onerous to penetrate, missing the urge for food for change that startups take without any consideration.
This creates a gulf the place well being tech builds the instruments, however conventional healthcare not often integrates them at scale. Hospitals usually function on 1-2% margins, leaving little room for experimentation. Their constructions reward stability over pace and agility, making it extraordinarily tough to check, undertake, and scale new tech.
I’ve seen this gulf firsthand. As a crucial care and pulmonary doctor, I’ve labored inside the standard system, the place skinny margins and inflexible constructions depart little house for innovation. And as an entrepreneur, I’ve piloted expertise designed to make care extra environment friendly, solely to observe hospitals wrestle to undertake some very sensible options.
Take into account Normal Catalyst’s recent $485 million purchase of Summa Well being by way of its Well being Assurance Transformation Company (HATCo). Summa is a big, nonprofit system in Ohio with hospitals, clinics, and a medical health 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 practically not possible.
OBBBA widens this hole by destabilizing the system, but it surely 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 at risk of 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 crisis.
In contrast to city or suburban techniques that may lean on diversification and endowments, rural suppliers lack a cushion. They usually 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 circumstances that make them fragile additionally make them structurally immune to 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 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 measurement.
Its potential lies in its position as a forcing perform, compelling fragile techniques to rewire themselves for the long run. If necessity is the mom of invention, rural fragility may be 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 techniques. And by subsidizing modernization, it lowers the monetary obstacles which have stored rural techniques from adopting and scaling trendy instruments.
If deployed properly, RHTP funds may 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, may mannequin what virtual-first care actually seems 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.
- Trendy compliance and high quality techniques: Rural suppliers can not afford armies of directors. Adopting digital compliance instruments and embedding high quality assurance into each day work, quite than including layers of forms, may make oversight sustainable.
- Proper-sized services: Not each neighborhood wants a full-service hospital. Modular pressing care, power illness administration, and cell clinics could serve sufferers higher at decrease value.
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 effectively, the ROI may far outweigh the preliminary funding. Telehealth has been proven to save lots of sufferers $147 to $186 per visit in averted journey and misplaced productiveness, whereas distant affected person monitoring applications have delivered a 22% positive ROI and decreased 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 corporations have constructed instruments that promise larger 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 may 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 may produce classes for the remainder of the nation. Tips on how to activate groups in another way. Tips on how to construct high quality techniques with out pointless crimson tape. Tips on how to make expertise the spine of supply as a substitute of an elective add-on.
The stakes are very excessive, but when achieved proper, rural well being may shift from being the canary within the coal mine to the proving floor for fashions that make your complete U.S. healthcare system extra environment friendly and extra patient-centered.
The Selection That Shapes the System
Will we cling to outdated fashions and anticipate failure, or can we embrace the instruments, crew constructions, and supply strategies that this disaster calls for?
RHTP could symbolize the final finest likelihood for rural America to innovate earlier than the protection internet tears fully. For the nation, it could possibly 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 imagine 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 subject.
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 Health
Rafid Fadul, MD, MBA, is an achieved digital well being government, firm advisor, serial entrepreneur, and triple board-certified pulmonary crucial 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 corporations and on the Board of Administrators for Ureteral Stent Firm, BestLife Holdings, and MedWish Worldwide. Dr. Fadul can be an adjunct professor at Johns Hopkins, educating programs in well being economics.
