The scramble by states to file their Rural Health Transformation Program grant proposals is over and the first-year state awards have been announced. But the breakneck pace of RHTP has scarcely slowed. States now must refine their proposals, distribute funding and begin spending it by the end of FY26 or risk losing the money they worked so hard to get.
Overall, the grant money was spread more evenly than some had anticipated; all 50 states received something in the program’s first year. Amounts ranged from a low of $147 million (New Jersey) to a high of $281 million (Texas). For some states, this could be the largest single federal healthcare grant they’ve ever received.
The money arrives at a critical time for rural health providers. Rural healthcare is in crisis. Since 2005, nearly 200 rural hospitals have completely or partially closed and more than 400 others (over 20%) are at risk of closing. And many are eliminating critical services, such as maternity care and general surgery, to save money. For example, between 2014 and 2023, 424 rural hospitals stopped offering chemotherapy services, forcing cancer patients to travel farther to be treated.
And it’s not only hospitals. Rural areas also face a shortage of post-acute care and long-term care services. Studies show that rural residents also have limited access to alternatives to nursing home care such as assisted living care facilities and adult day care centers.
The financial pressures will only increase this year as cuts to Medicaid and the Affordable Care Act are expected to cost rural healthcare providers an estimated $137 billion. RHTP was created out of concern about the impact of these cuts.
Is $50 billion over five years enough to end the rural healthcare crisis or even offset the federal spending cuts? No – but it’s what states have to work with. And the pressure is on them to maximize the impact of their RHTP grants. Here’s how they can do it.
Strategic approach will be key
RHTP was created with the following goals:
- Improving rural health overall
- Increasing access to care and improving collaboration among rural provider organizations
- Developing the rural healthcare workforce
- Creating innovative care delivery models
- Fostering the use of innovative technologies
The overall objective is to make rural healthcare more modern, efficient and accessible and to stabilize its financial model so that it is no longer in a perpetual crisis. Accomplishing that will take planning as well as strategic investment.
For example, states must be mindful of the risks of using RHTP money to create initiatives that will require ongoing spending beyond the lifespan of the program. There is no guarantee that the federal government will renew RHTP or provide any additional funding for rural healthcare, so states would be wise to avoid incurring ongoing financial obligations.
In addition, states should invest in programs that will deliver long-term improvements and improved technology deployment and processes rather than one-time boosts whose benefits will disappear when the money stops.
Investing in technology is imperative
Historically, rural healthcare providers have lagged urban and suburban systems in new technology adoption simply because they haven’t had as much money. RHTP gives them the opportunity to invest in technology that allows them to maximize their reach and efficiency and ultimately improve outcomes for rural patients.
The best way to accomplish this is to invest in tech that allows for greater collaboration and interoperability among rural healthcare organizations, including hospitals, skilled nursing facilities, rural health clinics and even large systems in nearby metro areas. This not only allows the organizations to pool data, resources and expertise that they couldn’t afford on their own, but to achieve a combined impact greater than they could accomplish individually.
Connectivity, interoperability and improved EHRs will allow under-resourced rural providers to better coordinate efforts across patients’ care journey, including critical transitions from acute care to post-acute care.
Workforce development a top priority
Another critical priority is developing the rural healthcare workforce. In addition to closed hospitals, rural America faces a shortage of healthcare workers. Nearly 70% of rural counties are designated as Health Professional Shortage Areas, meaning they have insufficient healthcare providers to meet the needs of their residents. More than half of all U.S. rural counties lack an obstetrician and, in 2022, 7.8% of counties did not have a primary care physician.
Rural areas do not have as many programs to train healthcare workers. The workers who do live in these areas often leave the field when facilities close or they relocate to more stable and better-paying jobs in metro regions.
Building a stable rural workforce will require new training programs, facilities, scholarships and other support, but RHTP can also pay for technology that gives those workers state-of-the-art tools that allow them to be as effective as possible, regardless of the setting. The right tools can go a long way toward overcoming the historical disadvantages that have hampered rural healthcare. Equally importantly, technology allows healthcare workers to deliver better care at the bedside by streamlining workflows and creating efficiencies that alleviate burden and save time.
Conclusion
Spending large sums of money in haste often leads to waste, which is something RHTP recipients need to be mindful of. The accelerated program timeline could lead to rushed decisions. In order to receive funding through years two to five of RHTP, states will need to be deliberate in spending year one awards.
It will take careful planning, collaboration and choosing the right partners to chart a path that promotes success. States and other recipients should pair up with vendors with proven records of building the networks that increase connectivity and collaboration in order to improve care and heighten efficiency.
Photo: AlexLMX, Getty Images
Steve Holt is Vice President of Government Affairs at PointClickCare. He is a licensed attorney and graduate of Indiana University Robert H. McKinney School of Law as well as DePauw University.
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