Stress Check: OBBBA, Rural Fragility, and Innovation

On July 4, 2025, the “One, Massive, Lovely Invoice Act” (OBBBA) was signed into regulation. Its backers hailed it as a automobile for progress, 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. Tens of millions 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 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, 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 result is dependent upon how we reply.

Why U.S. healthcare is so onerous to repair

Let’s degree set. America’s healthcare system is pricey, 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 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 onerous 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 usually function on 1-2% margins, leaving little room for experimentation. Their buildings reward stability over velocity 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 normal system, the place skinny margins and inflexible buildings depart little house for innovation. And as an entrepreneur, I’ve piloted know-how designed to make care extra environment friendly, solely to observe hospitals battle to undertake some very sensible options.

Think about Common Catalyst’s current $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 health insurance arm. HATCo is popping it right into a for-profit testing floor for brand spanking 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 size of the issue. It’s not that hospitals don’t see the worth of contemporary know-how; it’s that their working buildings, monetary realities, and regulatory obligations make speedy adoption practically unimaginable. 

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 liable to closure, and over 600 are thought-about weak nationwide. The complete system is fragile.

I believe 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 usually don’t have Chief Innovation Officers, CMIOs, or capital budgets for brand spanking new infrastructure. They depend on outdated digital programs, 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 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 size 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 programs to rewire themselves for the longer term. If necessity is the mom of invention, rural fragility is likely to be the mom of transformation.

By no means let a superb 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 programs. And by subsidizing modernization, it lowers the monetary obstacles which have stored rural programs from adopting and scaling fashionable instruments.

If deployed properly, RHTP funds might 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, might mannequin what virtual-first care actually seems to be 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.
• Fashionable compliance and high quality programs: Rural suppliers can’t afford armies of directors. Adopting digital compliance instruments and embedding high quality assurance into each day work, reasonably than including layers of forms, might make oversight sustainable.
• Proper-sized amenities: Not each group wants a full-service hospital. Modular pressing care, power illness administration, and cellular clinics might serve sufferers higher at decrease price.

Success received’t be discovered by patching the previous system. It’ll be about constructing one thing new beneath stress.

And if these interventions are deployed properly, the ROI might far outweigh the preliminary funding. Telehealth has been proven to save lots of sufferers $147 to $186 per go to in averted journey and misplaced productiveness, whereas distant affected person monitoring applications have delivered a 22% optimistic ROI and diminished hospitalizations by hundreds of {dollars} per affected person.

These are only a fraction of the outcomes that we might see from good implementation.

The paradox of fragility

What’s most weak may 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 may collapse.

For many years, well being tech firms have constructed instruments that promise larger 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 might 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 might produce classes for the remainder of the nation. How one can activate groups otherwise. How one can construct high quality programs with out pointless crimson tape. How one can make know-how the spine of supply as an alternative of an optionally available add-on.

The stakes are very excessive, but when finished proper, rural well being might 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 selection that shapes the system

Clinging to our previous fashions is equal to ready for failure. We have to embrace the instruments, crew buildings, and supply fashions that this ongoing disaster calls for.

RHTP might signify the final finest likelihood for rural America to innovate earlier than the security internet tears utterly. 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 attainable. And as an entrepreneur, I consider necessity may 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 selection however to innovate, and it must occur quickly. Regardless of the difficulties we’re going through, I stay hopeful that we’ll seize this second to construct a system that delivers on the promise of healthcare: accessible and compassionate take care of all.

Picture: Peshkova, Getty Pictures

This submit seems by means of the MedCity Influencers program. Anybody can publish their perspective on enterprise and innovation in healthcare on MedCity Information by means of MedCity Influencers. Click on right here to learn the way.