Breaking Down Trump’s $50 Billion Rural Health Fund

Dan Gorenstein (DG): Hey, it’s Dan. We’re bringing you a special bonus episode today that digs into some big health policy news that you might’ve missed over the holidays.

News clip: The Trump administration is making a major announcement about health care in rural communities.

News clip: The Trump administration is splitting $50 billion for rural health care up among the states.

DG: Just before the New Year, federal health officials announced the first round of funding from the $50 billion Rural Health Transformation Program.

CMS Administrator Mehmet Oz: This is a massively important day for many Americans living in rural America.

DG: There’s bipartisan excitement about rural health finally getting some attention and investment from Washington.

But there are also concerns that this fund will be ineffective and partisan.

Last Tuesday, January 6, Tradeoffs co-hosted a virtual event with the Leonard Davis Institute of Health Economics at the University of Pennsylvania. 

I moderated a conversation with some of the country’s top experts on rural health care. 

We explored how states will spend this new money, the evidence behind their policy plans, and whether this will actually improve the health of rural Americans.

Today, we’re sharing this deep dive into rural health care with you.

From the studio at the Leonard Davis Institute at the University of Pennsylvania, I’m Dan Gorenstein. This is Tradeoffs.

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DG: The conversation you’re about to hear was recorded live and has been edited lightly for length, clarity and sound quality.

DG: Hi. Thank you all for being here today. My name is Dan Gorenstein. I’m the founder and executive editor of Tradeoffs. If you’re new to trade offs, we’re a nonprofit news organization that covers healthcare’s toughest choices. We produce a weekly podcast called Tradeoffs, which you can get wherever you find your podcasts. There have been a lot of Fast and Furious changes in healthcare over the last year, as you well know, and it can be hard to make sense of all of this. That’s why we’ve partnered with our friends at the Leonard Davis Institute of Health Economics at the University of Pennsylvania for a series of conversations that we call Decoding the Moment.

Rachel Werner (RW): And hi, I’m Rachel Werner. I’m the executive director of LDI. LDI is Penn’s hub for research on healthcare delivery, health policy, and population health.

We bring together more than 500 researchers who are national experts and thought leaders on health and healthcare. We’re excited to come together with trade offs, to create a place where you all can better understand what’s happening in Washington and what it may mean for the future.

DG: Just before New Year’s, the Trump administration announced how much money each state would get from the $50 billion Rural Health Transformation Program. This pot of money was created by Congress last year and the administration invited states to propose how they would use it to improve outcomes, grow the rural healthcare workforce, and drive innovation.

Federal officials have been clear that this money is meant to transform rural healthcare, not fill in funding gaps. States were given just 52 days to pull together their applications for this new money.

RW: Half of the money is being split equally across states. Each state will get at least $100 million a year over the next five years. The rest of the money will be awarded based on a series of factors, including how rural a state is, what states propose to do with the money, and whether the states adopt policies aligned with the administration’s Make America Healthy Again priorities.

Large rural states like Texas, Alaska, California and Montana got the most money in 2026, but some small states like new Jersey, Rhode Island and Connecticut got significantly more per rural resident.

DG: While supporting rural health has bipartisan support. I mean, every state, right has some rural corner. There has been a lot of scrutiny over this fund. Democrats and many health policy experts argue that this temporary $50 billion infusion pales in comparison to the some $1 trillion in cuts to Medicaid and Obamacare, also passed by Congress last year.

Critics also worry about a lack of transparency and whether blue states will get less money because they oppose Trump administration policies. Today, we want to help you push past the partisanship, put this new money for rural health in context, examine the evidence, and consider what’s next now that the money is starting to flow.

We’ve asked for your questions in advance, and more than 80 of you have submitted them with your registration. Thank you so much for that. That is super cool. Please talk up the other folks in the chat. We hope that part of what we can do through these events is help you all connect with each other and learn from each other. To instigate that, please jump into the chat. Now introduce yourself and maybe what you are hoping to learn today.

While you do that, I’m going to turn it back over to you, Rachel, to kick off this really important, timely conversation with three big numbers that you’ve put together.

RW: Great. Thanks, Dan. So the first number is 80%, which is the percentage of rural America that is designated as medically underserved. And so that means it’s a shortage. The area has a shortage of primary care, has high infant mortality rates, poverty rates or high elderly population. As a result of this, most rural Americans faced significant obstacles in accessing healthcare, contributing to worse health and shorter life expectancies among rural populations compared to those in urban areas.

The second number is 44%, or the proportion of rural hospitals operating at a financial loss. Rural hospitals have relatively fixed high, high fixed costs such as staffing and emergency room 24 over seven, but they have low patient volumes, so the cost per patient is high. And because of that, and because they care for older adults and poorer patients, rural hospitals have fewer commercially insured patients, relying instead on lower payments from Medicare and Medicaid.

In addition, the states that have not expanded Medicaid are disproportionately rural, and so those ten states have higher rates of uninsured patients and more uncompensated care, which further weakens rural hospitals financial margins.

These hospital finances are important because weak finances can lead to hospital closure, and when a hospital shuts its doors, rural Americans lose access not only to emergency care, but also to essential services like maternity care and cancer treatment.

Even before Medicaid changes that are coming, which I will talk about next, rural healthcare has been struggling. And the third number is 1.8 million. That’s the number of rural Americans expected to lose Medicaid coverage for the over the next decade under H.R.1.

So H.R. one, which is also known as a one big beautiful Bill act, is changing Medicaid by imposing work requirements and requiring more frequent eligibility determinations. Both of those are going to make it harder for people to get on Medicaid and stay on Medicaid. The resulting loss of Medicaid coverage will impact both individuals and the health care system. For individuals, becoming uninsured leads to foregone care, missed medications, medical debt, and even higher mortality rates.

Among those who lose coverage. For health care systems, the higher uninsured rates are a big financial hit, reducing operating margins for hospitals, for primary care providers, and for specialists. The Medicaid changes under H.R.1 are likely to exacerbate a rural health crisis that has been years in the making.

DG: Rachel, thank you so much for those numbers. Really appreciate it. Now I’m going to ask our three panelists who are going to impress and dazzle you all over the course of this hour, to come onto video and come off of mute and introduce themselves and tell you a little bit about them. Kevin, let’s start with you, please.

Kevin Bennett (KB): Thank you. My name is Kevin Bennett. I am a professor here at the University of South Carolina School of Medicine and rural health fellow with the Commonwealth Fund.

DG: Paula.

Paula Chatterjee (PC): Hi, everyone. Thank you so much for being here. My name is Paula Chatterjee. I am an assistant professor at the University of Pennsylvania and a senior fellow at the Leonard Davis Institute. I’m a clinician and a health policy researcher who focuses on the health care safety net.

DG: Sarah Jane.

Sarah Jane Tribble (SJT): Hi, everyone. It’s good to see some friendly sources and people in the chat. It’s good to see you guys. I’m Sarah Jane tribble. I’m the chief rural health correspondent with KFF Health News here in D.C.

DG: Great. Thanks so much. And again, these folks have been covering this issue from different perspectives for quite some time, and you are in store for some really great information. We’ve had a couple of background calls, prep calls for this. And I know I’m buzzed and jazzed by what these panelists have to say. It’s pretty awesome.

Okay. So let’s just get going quickly here. We’re going to go around the horn lightning style to kick things off. You each had some time to dig into the awards from the federal government. What’s one word or phrase you would use to describe what you’ve seen so far? Sarah Jane, let’s start with you.

SJT: Yeah. Actually, I’m going to say wow. Because I was on the press call on December 29th and the timeframe that the states are dealing with that have already dealt with that, the Office of Rural Health Transformation that’s been created have been dealing with. It’s all just so very fast.

And what we heard on the press call was that, you know, these applications will be put in place, the states are going to start working, and then there’s going to be a review, you know, for the 2027 month by the end of the year. So states really just have months to put these plans in place, get them started and rolling. So wow.

DG: Great. Paula.

PC: I think my word is mismatch. And this is based on the fact that I’ve spent the past few weeks trying to dive into these state allocations. We were trying to even do some work before that on predicting where allocations would go, because we had a good amount of information about sort of where and how the money was going to be disbursed.

And, you know, perhaps I’m a one trick pony as a clinician, but my interest is, is money getting to where people have health needs and where, you know, the mortality crisis in rural America is most salient. And I now have evidence and I think we have growing evidence that perhaps it’s not going to get there. And so that’s why I think my initial assessment can be summarized by mismatch.

DG: Right. Is money getting to where it needs to go? Seems like a great question. Hopefully we’ll have a lot of time to discuss that over the next hour. Kevin. One word.

KB: Well, I have a lot of words for it, but the primarily, I would say cautious. You know, this is a transformation fund program. But as you said, 50 some days to pull it together. And there are a lot of parameters around this program that make it hard to kind of stick your neck out and be truly innovative, because if it doesn’t work, then future funding is in jeopardy.

There’s a lot of great things in these proposals, but I think if we really wanted to transform, they would have gone a lot further. And I would imagine folks wanted to go further, but wanted to stick within the parameters of the program to keep it going.

DG: So great. I’m hearing collectively through the three of you from your three words, I’m hearing a healthy dose of skepticism is sort of how it sounds going in, Sarah Jane, let’s go a layer deeper. You’ve been tracking this process for months now, talking to people all around the country. A lot of folks in the audience, including Aaron Purvin, want to know what this money is going to now that the awards are out. Right? What trends, I guess, Sarah Jane, are you seeing, in terms of what the Trump administration chose to fund here?

SJT: Yeah, first of all, I would just say that the the law itself created by Congress was very prescriptive. Right. So the law itself stated that every state would get an equal amount of money. So you’re seeing the first 100 million every state got this year just given to all 50 states, which for some folks, that was a surprise because it had to have an approved application.

So first of all, all 50 states got $100 million and then they got a certain allotment for their ruralness, and then they got a certain allotment for basically discretionary funding that the administration reviewed the applications and said, yeah, this is a good idea.

Now we have, KFF Health News has collected a lot of the applications and posted them online. So we have those applications. But we also know though is that the states had to work with CMS. These are competitive grants. So we don’t know what’s in the end in these grants. But the CMS did put out some, you know, one pagers on what the states are doing. And and as far as like trends that we’re seeing, workforce was very prescriptive. We saw a lot of states come forth with workforce ideas.

We all know that rural areas have a shortage of workforce and have had for a long time. We saw a lot of technology. Of course, this was a transformation program, and states were encouraged to think outside the box. So we’re seeing, you know, AI, robotics and certain states, we’re seeing proposals for hub and spoke plans and telehealth portals and things like that.

Big companies that I’ve written about before, like On-med, you know, have been lobbying states to get their telehealth booths out there. So tech workforce. And then the other thing that I was sort of surprised by that I started to notice after the announcement came out and Doctor Oz mentioned short term insurance plans or insurance plans in the press call.

I think there’s a bit of competition set up here. They they want competition in the marketplace. They want certificate of needs to disappear, and they want, you know, insurance plans that are more open for the market and, and things like that. Scopes of practice expanded. So I’ll leave it there. But those were sort of, sort of the surprises that I saw are the trends.

DG: Yeah. And I appreciate that. And I mean, around this competition, well, excuse me, before we get to the competition, let me look at this. So the whole point of these awards is to transform rural health. And I’d like our panelists to give us an evidence check.

Really, how likely are these policies or interventions going to be transformative. Let’s start with these workforce initiatives. Policy makers have been trying to get more medical workers into rural areas for decades. This is a long standing endemic problem, Paula. Do we have evidence that shows us what actually works for this?

PC: Great question. As you said, Dan, the rural workforce constellation of challenges has been formidable for decades. And I’ll say we’ve got a reasonable body of evidence to give us sort of moderate confidence about what works. And then like there’s a bucket of mixed, less effective stuff. So in terms of this, like moderate, like maybe it might work.

Rural pipeline programs have some strong evidence. We know that if you recruit folks specifically in the healthcare workforce who come from rural backgrounds, or if you provide people with extended rural training, that that is consistently associated with sort of higher rural retention in the workforce.

And that’s really what we want, right? We want a sustainable workforce that stays in the place. Some education focused strategies, right? Like if you integrate rural placements, rural training pathways in clinical medicine, where I trained, we had, you know, Indian Health Service rotations that folks would go on.

And then several of my good friends ended up practicing in the in the Indian Health Service for their career choice, sort of offering these training opportunities that really like formidable times can also be important and help with workforce challenges, I’ll say that. What is less effective? What we have mixed evidence about is some of these like regulatory incentives, right. These like return of service requirements that can sometimes drive initial recruitment of a workforce, but they often fail to sustain retention after people’s obligations under those programs end.

And standalone financial incentives of like, hey, we will pay you this much extra money to come work in this place. The evidence for that, I would say, is like weak and inconsistent, especially if you don’t combine those types of initiatives with community resources, with educational resources.

It’s a little bit hard to tell. I’ll say that. You know, there’s a recent paper that came out by, Justin Makowski, Jacob Wallace and Kim and in Health Affairs that I find myself coming back to a lot. And this is a program that is like a this is a paper that’s like a 50 year evaluation of the HPSA program. Right. The Health Professional Shortage Area program. This program was designed to get at this workforce challenge in rural communities from a variety of different levers. Right. Loan forgiveness, higher Medicare reimbursements. Like there’s a bunch of different stuff that comes under the program.

They do this 50 year retrospective on the program, which, by the way, costs like $1 billion a year to administer, and they find no significant changes in mortality or physician density. This is dating back from 1970 to 2018. Right. Like that’s a long time for us to be able to say, hey, like this is a great effort, but perhaps not achieving the outcomes that we had hoped.

DG: And not to put you too much on the spot, Paula or any of the other panelists. But when it comes to the workforce policies that we’re seeing in what has been approved by the administration, are we seeing evidence based, uh, ideas here? Are we seeing ideas that, you know, like, like these, these payments that seem to have less evidence that they’re that effective?

What what what’s how innovative have we seen? How how convincing, how much? I apologize for stuttering over this question. It’s after the holidays. I guess what I’m really trying to ask here is, are we seeing things that in these awards that suggest we could see a boon into the workforce?

SJT: Let me just jump in and just give a couple of examples that I saw in the the one pagers that HHS sent out and that were in some of the applications.

Delaware has proposed a four year medical school, which is sort of exciting. I don’t think they have one. Illinois wants to expand and establish new training and certification programs, like doulas and other kind of folks who are on the ground working community workers. And that is something that I think and Paula can check me on.

This research has shown has been beneficial. So there are some ideas out there. If you start going through what the states are proposing that are thoughtful and I do think there’s probably evidence that some of these would work. But I’m no researcher, but I just wanted to throw out a couple of things I’m seeing in those white pages.

DG: Kevin, thoughts on this?

KB: Yeah, I think from what I’ve seen, there are, again, cautious, going back to my word, a lot of the workforce proposals in these are tried and true methods, pipeline development, incentive programs, loan repayment, all of those sorts of things. Training in rural, getting from rural, all these things that we know can be effective.

But they’re not the answer, as we know, because, as Paula indicated. You know, we still have a long ways to go as far as keeping workforce there. And I always go back to, you know, let’s follow the money when I teach this course to undergrads who know nothing about healthcare, I’m like, you gotta follow the money with this.

And when you have, just take medical students, for example, they have a tremendous debt burden when they graduate. It’s really difficult for rural kids who tend to be less resources, to carry that debt. And then you want them to work in rural where they might earn less. And as a the way our payment system is set up is very volume based, fee for service, and without tremendous or very innovative ways of changing the payment system, I think we’re always going to have this issue of trying to get rural folks to practice in rural.

I think there’s a tremendous number of providers across provider types that want to practice in rural, that want to serve in rural and go back home. But the finances just don’t work out.

There are payment models in some of these programs, these proposals, um, for alternative payment or value based purchasing. But really, you know, I have colleagues who have worked on this and talked about, you know, we need capacity payments. We need a bolus of money to rural primary care, for example, just to keep your doors open and just maintain services and then payment on top of that. Without that kind of change, I think we’re always going to struggle with recruitment and retention.

DG: But just I want to I want to move on here. But I just one quick follow up question. Just a gut check question for me, Kevin, you live in South Carolina. Do you think, what’s your gut? Will this focus of the on rural health transformation will result in putting a dent in the workforce problem, or not really much we’re talking at really at the margins or actually actually a small dent.

KB: Yeah, I think it depends on how you define workforce. You know, I think the hardest issue is physicians. And, you know, in our state, we have a lot of trouble with OB GYNs and access to that. I don’t think that’s uncommon anywhere.

I think these types of programs could make a large dent and improvement with workforce such as community health workers, doulas that I think Sarah Jane or Paula mentioned earlier. Kind of these wraparound provider types that do tremendous work that improve outcomes and deliver great care, um, to supplement what physicians are able or unable to do because of location and payment. And I think that’s the key is how do we pay for in this type of environment. And value based could get us to that point and that would be very valuable. But it’s going to be it’s going to take some time.

DG: Very good. Thank you. Appreciate this. So again, still in this kind of like cone of evidence checking, I’d like to talk about some of these pro-competition policies that Sarah Jane mentioned a couple of minutes ago.

The administration gave states bonus points if they said they would eliminate certificate of need laws, which require health care providers to prove to state regulators that new services or facilities are needed before they can open up shop. They also wanted states to make it easier for providers to practice in multiple states, and for nurse practitioners and physician associates, for example, to do more care without a supervising physician.

What does the literature say about whether we should expect about whether we should expect from these policy changes? Anything substantial here, Paula?

PC: Oh, great question. I think maybe I’ll, I’m a simple girl. Maybe I’ll step back for a second and just say, like, what do we mean when we say competition? Right?

So when we say that we’re trying to harness competition, I think conceptually what we’re trying to say is we want patients to have a choice, and we want them to have the real ability to act on that choice. And we want markets to have enough participation to generate competition for quality. I think that’s what we mean.

And I get that the crux of this argument about competition is that a lot of rural markets have only one hospital or a very thin provider supply, meaning that, like true competition, rarely exists. I think where I start to think about competition in rural markets a little bit differently is that it’s more of a geographic monopoly than like a competitive market issue, right?

So like for example, insurance carriers, oftentimes not always, but will avoid rural markets because of risk, low enrollment, reducing competitive choices for patients and like raising premiums when you only have a few insurers operating in those markets. So trying to address these like structural challenges of geography with like traditional market based incentives, is sort of how I’m trying to reconcile those two things in my head. So let me just provide that like little bit of context before diving into some of these specifics.

I get that there are policies in the RHTP that are trying to like, unleash new actors into new markets, and that’s where I see sort of certificate of need laws fitting in. Right. So like CON laws, these require healthcare providers to get state approval before they can build new facilities or expand certain services.

And the goal really is to try to limit excess capacity. These were policies that were developed back in the 60s and 70s, and a lot of states still have them in place. And what I’ll say is we actually have a like a good amount of evidence on, you know, what it means to have a CON law, what happens when a CON law is repealed, CON c-o-n, whatever, whatever. I’m maybe not totally in my element on my acronyms.

But, I think my so my overall sense here about like the I’m going to focus on like the causal inference literature on these laws is that in some situations, having these laws in place can reduce the supply of certain types of healthcare facilities. Certain types of healthcare services. I’ll say that the evidence for this is primarily for technologies and like entry of like imaging modalities into different markets or, um, ambulatory surgical centers. That’s really where we see some of these, like access changes associated with these laws.

To my knowledge, it hasn’t been studied for things like do these laws inhibit the entry of primary care providers? Do they inhibit the entry of substance use care? Do they inhibit the entry of maternity care? Those are the things that, like we know rural populations really need access to.

So whether like this very narrow literature generalizes to what rural populations have a really high population need for, I’m not sure. I will say that the effects of these, you know, certificate of need laws on patient stuff, right, like quality and mortality is a little bit more ambiguous. Right? Like overall there’s a great NBER working paper that just came out last year by Chris Whaley and some folks at Rand that looks at, you know, changes in overall mortality associated with like having these laws and not having these laws. And it’s a difference in differences study. And they find no change in overall mortality.

They might find some changes in like some disease specific outcomes. But it’s a little hard to tell for me. So I guess my like TLDR for you, Dan is like is like CON laws maybe affect access for certain clinical technologies. And perhaps for some like surgical procedures.

Whether those access challenges extend to other domains of clinical medicine, I don’t know. And whether these laws will fundamentally like whether repealing certificate of need laws are going to like, really help patient quality and really help patient outcomes. We don’t have strong evidence to suggest that it does.

DG: Right. And and one other thing, you know, obviously we’re just we’re talking about workforce. It seems like part of the idea, what the Trump administration is trying to incentivize here is to make to grow workforce, right? By addressing scope of practice, making it easier for, certain providers who are not physicians to provide care.

That seems like a really laudable goal. Is there any reason to think that that’s going to, are we seeing, maybe to you, Sarah Jane, are we seeing a serious effort here on the part of states and what has been funded to, like, really try to go after this? I mean, because we know historically physicians have been really hostile to this, sort of this sort of move.

SJT: I don’t have the data on how many of these applications included scope of practice changes. I did see a pharmacist, for example, saying that, you know, he was excited that that scope of practice was being expanded.

And my sense is, you know, that open competition, it’s been a debated topic in many states Just going back to the CON for a moment, Dr. Oz did say on the call that 36% of states participated in the con laws in their applications.

And when you look at, I think Ryan posted the briefs that CMS put out. They have those state policy action items so you can see which states participated very quickly on that. To answer your question, though, I do think that, you know, the idea of transformation that came with this, this law kind of opened the gates for states to do all of these experiments. So states have been thinking about it. If their legislatures, legislators have been debating it, then this maybe gave them the boost that they wanted to have.

DG: Kevin anything you want to add here?

KB: Yeah, I mean, especially on that last point, I would agree. I know here in South Carolina, scope of practice has been a hot topic, and I feel like this is going to supercharge that honestly. And a phrase that I’ve heard at our state house before is unrestrained supply, you know, and I think a lot of this, you know, you talk about competition, but if you kind of broadly look at these free market concepts that a lot of folks subscribe to in healthcare, if we can restrain the supply of providers, provider types, practice con technologies.

You know, the theory is that these restraints, these regulations are holding it back, and then you remove those and they’ll enter the rural market. As you know, both the other panelists suggested there’s not a lot of great evidence for some of that. There’s a lot more larger issues that are restraining that integration into rural communities. But at least that’s I think that’s the thinking with some of this, like, let’s open the market wide open and have anybody that wants to participate in their way do that. And let’s see what happens.

DG: This larger push for some sort of deregulation.

KB: Exactly.

DG: Okay. Final thing. Final thing on this evidence, is states pushing forward on MAHA friendly policies, things like reinstituting the presidential fitness test in schools, putting additional restrictions on SNAP, formerly food stamps, to push people toward healthier food choices like banning people from buying soda. Or if you’re from Chicago, like me, what we’d call pop. Increasing nutrition education for clinicians. Question for you, Kevin and Paula. What’s the research say about the likelihood of these policies improving rural health? Kevin.

KB: Yeah, I think that, evidence is mixed. I know you know that, yeah. Okay. We all know eating better is helpful, right? But, you know, when you look at folks who are on SNAP, for example, you know, these are folks who are on the margins financially and resource wise.

They’re in communities that are food deserts for a lot of cases. Dollar General might be their grocery store, and they don’t sell fresh fruit and veggies usually. So it’s difficult to say, oh, we’ll just change this, we’ll tweak this SNAP regulation. We’ll change you know, some nutrition counseling and education. And then all of a sudden people will eat more healthy and then they’ll become healthier.

You know, that’s a small part of it. They are much, much larger issues at play that are holding people’s health back. You know, they’re the allostatic load of stress. If you’re worried about making your rent is much more impactful on health than if you’re drinking a soda every day for lunch, right? Stress leads to poor health behaviors smoking, drinking, etcetera. If you’re working two jobs, you know you don’t have time to go to the grocery store and make a healthy meal, you’re going to grab McDonald’s or Subway or something that’s cheap and easy to try to feed your family. So I think, you know, it’s not that any of these things are bad necessarily. I just don’t think it’ll make a noticeable change in outcomes that we really want to see.

DG: I mean, the whole idea. Right. We keep going to this word transformational. It’s not going to be transformational, but also not necessarily harmful. Maybe at the margin a positive.

KB: Right. I think I think the only harm is if we focus too much on these sorts of things that are just chipping away at the edges, instead of focusing on some of the more root issues. I’d rather us spend more time on how do we get transportation to rural communities so they can achieve healthcare access? The fitness test, we know, we know, you know, and we already use tests. We’re just going back to one that I think is kind of nostalgic. I still have my presidential fitness patches somewhere in my, you know.

DG: Congratulations.

KB: I mean, you know.

DG: I’m sure you’re proud.

KB: But. But, you know, does that mean that I, you know, don’t occasionally drink a mountain dew? Of course it does. You know. So, but, you know, like I said, it’s if we focused on the true root causes and the true root issues, I think we’d get a much further along and move the needle much further.

DG: And, Paula, can you just speak quickly to the nutrition education?

PC: Sure.

DG: You were pretty funny about this during the prep call.

PC: Well, I was reflecting on my own clinical education, and I remember receiving, you know, some nutrition education. I mean, granted, it’s like not to the extent that I learned anatomy, for example, but like I do remember, receiving education about, sort of recommended dietary intake guidelines for fruits and vegetables.

Like, I learned about micronutrient deficiencies and how they’re more common in patients who, you know, undergo bariatric surgery or are struggling with alcohol use disorder. Right. Like, I feel like my nutritional education was also kind of weaved in throughout my understanding of physiology and pathophysiology. Right.

I learned how diet and exercise can affect outcomes across clinical conditions. And I don’t know, I learned how to have conversations with people about the food they eat. Right. That’s so a part of nutrition education that I think is part of just standard medical education, right? You talk to people about the food they eat, the food that they enjoy, and how they set healthy goals for their intake. Right.

I will say that as I read through, this New York Times article this morning about RFK Jr’s upcoming changes to the nutritional guidelines, I did not learn about some of those things. Right. I did not learn about consuming more red meat. I did not learn about consuming more saturated fats like full fat dairy.

I did learn about some of the harms of ultra processed foods and stuff and learned about the harms of alcohol use. But I will say like the evidence on that is even evolving recently and like not to not to be the annoying person who returns to science and myopia.

But I feel like more broadly, I think that the mission of improving nutritional education for physicians is, of course, a good one. Right? Like, I want to be able to counsel patients better on how food and exercise and lifestyle. And, you know, that dimension of, you know, care affects their health. Like, I want to be better at that.

I’ll say that like nutritional epidemiology is like a uniquely hard field of study, right? Like it’s there’s measurement error in how we talk to people about food. Like there’s confounding and healthy user biases. These change these causal effects are long. Like if I ate butter in my teenage years, how is that affecting my cardiovascular risk? These are just it’s a hard scientific area of inquiry.

And so I think that I want to believe in a goal of like precision nutritional education. Heck yeah. Like I would love to benefit from that education and like pass that on to patients. I’m not sure we’re there yet in terms of like where the science currently stands.

DG: Paula and Kevin. What I don’t need you to respond to this, but just what I’m hearing you guys say as it pertains to these SNAP policies to nutrition education for physicians, some of these things sort of sound good and make intuitive sense, but their impact is in question. And their ability to actually be, again, transformational is highly in doubt where there are sort of larger questions that would benefit from greater scrutiny. And this is a little bit of a distraction, is what I kind of hear you guys saying a little bit about these.

I want to zoom out here for a second and say that, I’ve been a health care reporter for about 15 years, and this is one of the first times in my career that I’ve seen such a spotlight and an opportunity and for investment in rural health.

I know in many states officials had listening sessions. They asked for evidence based programs that they should include in their applications to the federal government. At the same time, as we said earlier, states just had 52 days to put these things together. So, like, how thoughtful can you be in 52 days, right? It’s a total sprint.

Kevin, you were really on the ground in South Carolina, and it’s really, really we’re psyched that you’re here because it gives, I think, folks in the audience a chance to understand what a bird’s eye view of this process looked like as how whether it how thoughtful it was. I really love for you to tell us a story.

Share with us an anecdote of an idea that you pitched to the state leaders to help us understand how interested or capable folks, at least in South Carolina, were, about being able to incorporate evidence based solutions into their proposals.

KB: Yeah. And I think every state’s process was different. You know, in our state, there was a public comment period where people could submit ideas, proposals, concepts to us. Our Health and Human Services department was the run kind of managing this proposal for the governor’s office. I want to say they said there were six to 700 submissions given to them for that.

They had several stakeholder meetings, in-person meetings with folks like the state Office of Rural Health, myself, my center for Rural and Primary Health Care, AHEC and others, where we had 15 minutes to pitch ideas and concepts to them.

So they gathered a lot of info. But I think South Carolina and several other states are sort of like this too. Took a different approach with their program and their proposal in the sense of they didn’t really propose structured, evidence based programs per se. They proposed a framework by which they would have people once again submit to them proposals within that framework.

We expect those to be sometime in January, where we will pitch specific ideas that fit within this framework within the RHTP, evidence based programs across workforce and technology and networks and things like that to implement the overall program. So in our state, it feels like it’s a little bit more distributed. You know, they want broad participation with programs and organizations across the state.

They want them to do what they’re already doing, expand what they’re doing. Those sorts of things. I’m sure that universities and workforce will submit. Healthcare organizations will submit. But it’s a bit of a contrast to other states that proposed very specific programs. They’re going to do A, B, and C, which are evidence based programs. We’re going to fund that. We’re going to do it instead of kind of waiting for it to come in. Not sure which one will be better. Maybe somewhere in the middle.

I think there’s pros and cons to both approaches, and it’s going to be really interesting to see how this plays out in South Carolina, because, you know, they could open up these calls and get another 6 to 700 proposals and have to wade through that fund it.

And I think Sarah Jane mentioned August. They start the process again for year two. So, how quickly can they turn it around? Maybe they can turn it around more quickly because they’re distributed out. Maybe we’ll find more evidence that way. My only concern is how coordinated all those efforts are going to be. How active is the state going to be in getting these folks together, collaborating with each other, working together? That’s going to be the challenge. But I think is very possible.

DG: And, Kevin, I’m not asking you to throw, South Carolina state officials under the bus here, I’m asking you to share your take on what you witnessed.

How much in this process. Right. Like I hear you saying that in South Carolina, the officials running the process were curious or at least curious in the sense that they were putting out giving, giving folks opportunity to pitch ideas.

In your state. How much were people excited about specifically about evidence based ideas versus ideas that sound good but lack the evidence? Because we all know everybody on this call and everybody in the audience knows in healthcare, there’s a lot of good sounding things that lack meaningful evidence.

KB: Yeah. And that was specific to what they asked for. They wanted evidence based programs. And we were able to I think we submitted nine or ten different evidence based programs of things we’re already doing, like our collaborative health communities.

And, you know, I don’t know what everybody else submitted. I didn’t read all six or 700 of them, obviously. I don’t know how anybody could have in that time period. It’s very challenging. But that is what they specifically asked for were evidence based programs that are already up and running that needed to be expanded so that could be quickly implemented. And then sustainability was a big piece. How can this be sustained after this five year period.

DG: Which is something that the administration’s really sort of looking for as well? Right. That’s something that they want. They’re looking for sustainability.

KB: Right. And those are all great things. And like I said, this distributed approach, you know, we might be able to achieve that because these are things that are already happening and organizations that are already existing.

And you’re not having to build new infrastructure as you go. It’s just, you know, it’ll be interesting to see this next cycle of proposals and reward. Subawards, that they’re calling them. How many of those are truly evidence based, and how many of them are kind of, you know, aspirational based, based on some evidence or, you know, two or three degrees separation from that? We’re going to have all of that, I’m sure.

DG: Sarah Jane, I just want to we haven’t heard from you in a couple of minutes here. I just want to, like, throw this to you for a quick second here. If you if you have a sense on how interested states seem to be when it comes to pushing evidence based ideas rather than good sounding ideas.

SJT: Well, look, the proposal, the application, the NOFO, it asks for evidence based ideas. So states are very interested in it, and that’s what they put in their applications across the board. You saw them citing that because that’s what was asked for from the administration.

And I think a lot of people on this call listening. And I just want to acknowledge that, you know, when this was announced, it wasn’t announced with the Office of Rural Health at HRSA. And I think a lot of states have been dealing with the Health Resources and Services Administration through a series of grants that often require, you know, these states and the grantees to prove that they’re showing results.

HRSA was not involved in this. Instead, they set up a new Office of Rural Health Transformation and brought some people over from other agencies and brought some new people in. And the people who created this NOFO who created this application were very serious about getting results. And they want those results in five years, and they want them to be evidence based. So I just want to place that on the table.

And then also note that the Office of Rural Health Transformation is just getting up and running. They’re hiring program officers. I want to know how many they’re hiring, but they seem to be very engaged in making sure that the states have somebody to talk to at the federal level.

So as they go through this process, they have people to ask questions to and to make sure that they’re actually providing and resulting, you know, outcomes here.

So I think as as we watch this program roll out in the coming months, and if you’re a reporter on this call listening, please call your state. See what their scope of work is. I think that it’s going to be important for all of us to keep asking, you know, how is the state working with the federal government and making sure they’re, you know, bringing outcomes here for the rural residents? And I think it seems that they are setting up parameters to do that, and I just wanted to put that out there.

DG: Thanks very much, Sarah Jane. Really appreciate that context. Very helpful. Paula, you know, we only have 16 minutes left, there’s so many questions. I wish we had like an hour and a half. I’m not sure if our audience feels the same way, but this conversation has been amazing. I’m just going to ask all of you guys for all of us, to include myself, to be, as truncated here as possible because I want to get to as many of these questions as we can.

Paula, you and Rachel Werner have put together some work to quantify how well this program is set up to meet rural health needs. And I want to use your analysis to answer some of the questions that we’ve gotten from the audience.

In particular, we got some questions asking about how this money could help struggling rural hospitals. Stephen Zuckerman and Maxwell Real, sorry if I mispronounced your name Maxwell, were curious about this, among others. What did your analysis show about hospitals?

PC: Perfect. Yes. Oh, man. I think about hospitals all the time. And I guess what I’ll say is that to start, I think the RHTP is very clear in that it’s not meant to be a bailout for hospitals and their financial circumstances.

I will juxtapose that next to the rhetoric around the program, which has been quite different, saying that, you know, this program is going to offset almost all of the financial challenges that might be coming down the pike as a result of changes to the Medicaid program and other financial, you know, reforms.

So I’ll just say there’s like a de jure RHTP and then a de facto. That being said, I think if one of the goals is to improve rural health access. Like, wouldn’t it be nice if funds were targeted to places that have had greater access challenges? And so, Rachel,, a wonderful analyst, Eliza McNeill, and I started to take a peek at this.

And, you know, we basically looked at states that have lost the greatest share of their rural hospital beds from, like, you know, 2018 to 2023. This included the pandemic, which accelerated a lot of financial pressures for rural hospitals. And we tried to see sort of did funding get to those places where more rural hospital beds or a greater share of rural hospital beds were lost. And what we can say is that maybe states that have lost a greater share of their rural hospital beds get a little bit more total funding.

But when you adjust for rural population, that potential benefit goes away almost entirely. Right? So when you look at like where funding per rural resident goes, which I think is the right measure, you know, reasonable people can disagree.

Some people can say, no, I just care about how much money is going to a state, and the state gets to decide where to allocate it. It doesn’t say anywhere that it always has to go to only rural communities, right? States have some flexibility. That’s a reasonable point.

Again, I’m a simple girl and I only know one trick, which is like, where are rural people having the greatest health challenges? And for me, it makes sense to have like a person based denominator here. So if you look at where funding per rural resident is going under this program, it’s not going to states that have the highest rural mortality rates. It’s not going to states that are projected to have the greatest reductions in federal Medicaid spending. It’s not going to places that are losing the most hospital beds.

The only thing that we have found that is like weekly correlated with where money is going is a state’s administrative capacity. And I think this speaks to some of the questions that have been coming up in the chat, which is like there was such a short time frame here.

There was a lot asked of states in this very short time frame for a one shot to get at this pool of money. And unless you’re a state that has the administrative capacity to do this, it was probably really hard for you to put this together. And so we do see this like weak positive association between where money went per rural resident and sort of what the quality of a state’s administrative capacity were.

I veered a little bit from hospital beds and went too long Dan. I’m sorry.

DG: That’s okay. Paula, I just want to I just want to stick one follow up here with you. You at the top talked about mismatch. And I’m wondering like listening to your answer as you as you talk about this analysis that you and Rachel put together and your other colleagues put together, is that sort of what’s informing this, this word for you mismatch?

Are you basically saying to us like, okay, there, there’s this money, it’s out there, but it’s really it’s not being as targeted as arguably it should be. Is that basically what you’re telling us?

PC: That’s what we’re trying to tell people in the analyses that we’re doing. That’s the story. We’re saying that the Rural Health Transformation Program has these goals. It has clearly stated goals improve access, improve rural population health, right, among others. You know, let me, I’m just being parsimonious here.

So if we can benchmark those goals to what we know about what the state of the world is in rural communities, can we say that funding is aligned with need or is it not aligned with need? That’s and unfortunately, we’re seeing that in a lot of ways. It perhaps is not well aligned with the needs.

DG: Very good. Thank you. I want to move on to to Medicaid here. It’s been 49 minutes and we haven’t talked about Medicaid yet. So and we saw a lot of folks in the audience actually bring Medicaid questions up, particularly these Medicaid cuts that Congress passed at the same time that they passed the Rural Health Fund.

Just a refresher for folks. Republicans in Congress added new eligibility requirements and restricted some common levers states use to fund their Medicaid programs. All told, the Congressional Budget Office predicts that the law will cut nearly $900 billion in federal money from Medicaid over the next ten years and push some ten million Americans off of their health insurance. Brent, Tammy Louis and Christopher Mallard all want to know how much this new rural health money will be able to fill the gap left by these Medicaid cuts.

SJT: Let me just jump in here, please. It’s the best number I could find on this. 137 billion over a decade will be reduced from Medicaid spending in rural America. So 137 billion. This rural health fund is 50 billion. You can do the math on that one and how much it fills the gaps. But like Paula has said from the beginning of this conversation, this is not meant to fill that. Now, the rhetoric during the debate in July was for sure about.

DG: The rhetoric in Congress in Washington.

SJT: Right, the rhetoric in Congress in Washington, Susan Collins, Murkowski in Alaska. They all talked about their rural hospitals. And this the rhetoric was that this would help address those fears and concerns. That’s on the record. Plenty of Republicans said it, but that’s not the reality of what was written in the bill.

And the administration followed what was written in the bill. It’s the law. The law is for transformation. It very much encourages the use of technology, innovation, things that have, you know, are maybe not directly to rural hospitals.

And I don’t want to quote this number, but I’m going to indicate it because it’s in one of my stories, but I think it’s a 15. And help me out here, Paula. Kevin, if you remember it, I think it limits the amount that the the state can spend on rural hospital operations by 15%. You’re shaking your head, Paula – okay, great. I got it right. When you have it in a story, you should remember it.

But but in any case, you can read my stories. But yeah, no, there is a limit. So they’re very clear that this is not a rescue plan for rural hospitals. They’ve said it in the meetings. We’ve talked about it here. So while it was the rhetoric of Congress that’s that’s it’s not meant to fill the gaps there. Instead, it’s meant to help rural America overcome whatever deficiencies that seemed. People seem to think it has in healthcare in some way. And I think that’s that’s a big challenge. It’ll be exciting to watch what happens.

DG: Kevin. Paula, any thoughts about, this question about, what this $50 billion can mean in the face of the serious, serious looming shortfalls that states are going to be facing?

KB: Yeah, it’s going to be a huge challenge. My colleagues at the National Rural Health Association said this program would have been great as a standalone transformational investment program and changing rural healthcare. With the cuts, you’ve got facilities that are going to be struggling to keep their doors open, and it’s really hard to think about transformation if you’re trying to keep your doors open and employees employed and patient served.

It is also I think, you know, we’re talking about Medicaid and expansion. This bill, the OB3, is very specifically targeted for, those expansion states and populations. And, you know, some states like mine, we never expanded Medicaid, and we’re not hit as hard as others.

So I think that’s going to be an interesting dynamic as well, where our hospitals are still going to suffer because of this, because that’s where those direct payment cuts are going to come into play. But how do you ask a rural hospital to, you know, change your payment program and create a new workforce and train them if they’re worried about making payroll next month? Or they might have to cut OB services because it’s expensive and reduce malpractice.

And, you know, it’s just it’s two sided. And I think we need to explicitly acknowledge that all of this that we’re talking about is a part of a political process. This is politically based legislation. It’s not necessarily health care legislation. It’s not planned out by health policy wonks to create a better healthcare system.

I think that’s the theme for just about every piece of healthcare related legislation in our country for many years. And that’s just the nature of it. So we have to I think you have to explicitly acknowledge those things, that this was a kind of a way to bring other Republicans on board to get the legislation passed. And that’s the way the game’s played.

And so now that it’s here and now that they’re awarded, what can we do with it? What can we maximize with it to try to get something out of it? Um, so stopgap and do something positive with it, at least in the environment that we’re in. And that’s that’s the best we can do.

DG: Okay. I’m going to go to this final lightning round as we look to the future. This money has been awarded in many ways. Of course. This is just the beginning of this story. I’ve asked each panelist to think about what’s next for them, specifically as they follow this fund.

And hopefully it’s going to give everybody in the audience a sense of what your next steps could be. Or maybe, Paula, we’ve got a lot of researchers in the audience, and a few of them, including Aidan Crowley and Eric Crankshaw, asked about the role of researchers and evaluation. What’s one study that you are hoping to do on this? And maybe a bonus idea for someone watching, uh, to take on.

PC: Oh, man. I think I’m-

DG: Short, Paula short!

PC: Short, short! You’re right. I’m going to stay focused. Sorry. What I will say is, I think that there’s I mean, there’s tremendous opportunity here for a lot of rigorous natural experiments, right? And for the first time in a long time, they’re going to be in rural areas, right. And our evidence on natural experiment experiments in rural areas is sparse, if at all, like focused on this very high risk population.

So I’m not going to pick a specific thing. But I think following state’s implementation of their proposals and figuring out really beautiful experiments, state border comparisons, I think that the opportunity is ripe to do rigorous research here.

I will say that we as researchers are have been bad at we, I’ll say I. I, as a researcher, have been bad at considering what are really perennial challenges in rural health research. How do I deal with small denominators? How do I embrace heterogeneity as a feature and not a bug? Right. How do I how do I incorporate these features?

And so in that sense, I feel like as a research community we have to like tool up. We have to tool up to like meet this moment that is going to present us with a lot of opportunities to potentially figure out what works, what doesn’t, why and where. So I am nervous but excited for all of it.

DG: Kevin, now that you’ve seen South Carolina’s award, how are you planning to push for this money to make sustainable change in your state? What advice would you have to others on the ground in other states? And again.

KB: Yeah I think-

DG: Short here.

KB: Short, short, yes, I think, what I would love to see is how this enables systems and structures to change or to be built to coordinate care. We’ve done some of that work already in the state. How do we create larger systems that really can change and transform rural healthcare? Every state’s going to.

DG: Just give me. Sorry, sorry to interrupt you. Just give me a one sentence specific when you say those words.

KB: Referral networks, coordinating councils, bridge organizations. How do you, you know, connect clinical services to community resources to improve patient care? And how do you, you know, feed back those informational loops to all those providers and patients?

That’s the opportunity. Some states are going to do it better than others. We need to learn from them and everybody adopt it by the end of the five year cycle. And research needs to be done to figure that out.

DG: Cool. Thank you sir. Sarah, close us out, please. What’s one story that you are following as a journalist? And what do you hope other journalists will keep an eye on?

SJT: I’ll start with the other journalists, if you are. I think that we should all be watching our states. I think that we should be talking to our state offices and don’t get focused just on one aspect, but ask those states if they’re following their plans and if they’re holding the the folks who they’re giving money to accountable for providing care to their rural residents.

And on that note, that’s what I’ll be following. I’m going to be looking at the federal government, asking them if they are talking to the states and just kind of following every aspect of this. I’m, I you know, I’ve been covering rural health for a number of years now. I grew up in rural America. I’m very interested to see if the outcomes happen. They’ve promised in five years.

DG: What a perfect place to end it. I just want to thank Kevin, Paula and Sarah Jane for your contributions. This was amazing. You’ve been very, very generous with your time and your energy. Really appreciate it very, very much. 

I hope you got something from this live, bonus edition of Tradeoffs.

If you want more reporting on this big pot of money for rural health care, you’re in luck. Our two-part podcast series on the Rural Health Transformation Program will drop January 22nd and 29th. 

We will take you inside one state’s 7-week sprint for its share of the rural health funds — and the tough choices the state made to make the most of this opportunity. 

Make sure you’re subscribed to Tradeoffs wherever you get your podcasts and subscribe to our newsletter at tradeoffs.org

I’m Dan Gorenstein. This is Tradeoffs.