Rural Health Transformation Fund: Goals and Challenges

In a recent webinar, Newsweek gathered leaders from Sanford Health, InterSystems, and Lumeris to discuss the $50 billion Rural Health Transformation Fund’s potential. The panel started with cautious optimism about the fund’s impact on rural health. States have been quick to respond, and funding has started reaching providers within the first three months.

Dr. Tim Ferris of InterSystems challenged a common misconception. He stated, “It is not about saving rural hospitals in America, full stop.” Ferris emphasized the economic challenges these hospitals face due to low reimbursements from Medicare and Medicaid. He argued the fund’s success should be judged by its improvement in access to care and information sharing, rather than its ability to prevent hospital closures.

Data highlights the challenge’s magnitude. Over 40% of rural hospitals operate at a loss, with 417 vulnerable to closure according to Chartis’ 2026 rural health report. The Rural Health Transformation Fund aims to inject $50 billion into transforming rural healthcare over five years, instead of directly covering operating losses.

Matt Hocks from Sanford Health echoed a similar sentiment, seeing the program not as a rescue package, but as an opportunity to rethink rural health care. Sanford plans to invest in technology to keep more care local and reduce the need for patients to travel long distances.

“We don’t want to build more hospital beds in our major medical centers,” Hocks stated. “We want people to stay local.”

Dr. David Carmouche of Lumeris expanded the discussion. He highlighted the importance of access, workforce, and technology, emphasizing that infrastructure must enhance patient experiences. He believes improving health outcomes relies on making care more accessible and proactive.

Hocks noted the difficulty rural hospitals face in modernizing due to limited budgets. Technology projects often take a back seat without adequate funds. This delay hinders the adoption of crucial capabilities like virtual nursing and remote expertise.

Ferris mentioned the HITECH Act’s impact on EHR adoption as an example. He believes this transformation should incorporate interoperability and scalability from the start.

Artificial Intelligence (AI) repeatedly emerged as a future pillar in rural healthcare. Carmouche envisioned AI leveraging real-time data to extend the reach of rural healthcare workers. Hocks suggested AI could improve behavioral health connections, providing immediate feedback through chatbots and other technologies.

However, Ferris reiterated that technology cannot solve rural healthcare’s financial issues alone. He underscored the need for separate discussions on payment reform alongside transformation efforts. The fund may enhance care delivery but won’t single-handedly reverse decades of economic pressure.

The panel emphasized that success should be measured by access to higher-quality local care, improved clinician information, and effective technology use, rather than merely counting open hospitals. These metrics better align with the fund’s intended impact.