the Rural health transformation programme The RHTP is more than just a funding bill: it is a $50 billion lifeline for rural hospitals that are on the verge of collapse, and time is running out until they are in a position to succeed. With closures accelerating and communities already losing access to care, the countdown to fiscal year 2026 is not far away. States, providers, and technology partners acting now will define the future of rural health for decades; Those that are delayed could leave billions of dollars untapped and put people’s lives at risk.
Here’s what’s at stake:
Total Funding: $50 billion over five years (fiscal year 2026-2030).
Distribution model:
50% is divided equally between all states that apply and are approved.
50% is awarded competitively, based on application scoring criteria.
Scoring factors include:
Degree of rurality and population need.
State policies that support rural health care access and equity.
The quality and ambition of the proposed use of funds.
Application process:
States must submit a single conversion plan to the Centers for Medicare and Medicaid Services (CMS).
Plans must demonstrate statewide impact, not just benefits to one region or hospital.
Commitments include measurable results, clear timelines, budget milestones and stakeholder engagement.
Every state will apply, but priorities and competitiveness will vary. Vendors and provider partners must align with each state’s vision, Demonstrate a willingness to achieve results and proactively develop solutions within the state’s funding strategy.
Challenges as catalysts: Leveraging technology to reimagine rural health care
Although the RHTP provides opportunities, some organizations may face challenges in the proposed use of funding without appropriate systems in place:
Declining patient volumes and changing models of care: Many rural hospitals face the challenges of thin margins and inefficient operations in low-volume settings, ultimately putting entire communities at risk of losing access to care. Lower headcount does not mean lower impact if hospitals can track, engage and manage patients across the continuum, even outside the four walls. RHTP can help enhance this for organizations that are ready to leverage real-time insights into their current population to make better decisions that drive greater impact.
Rural manpower shortage: If shortages continue without intervention, doctors will remain overworked, burnout will rise and access to timely care will worsen. Organizations can benefit from AI-powered workflow and third-party care navigator support that expand clinicians’ reach and reduce administrative burden. By leveraging existing provider networks and the support of trusted partners, organizations can do more with less.
Financial instability: Many rural hospitals may remain trapped in a cycle of dependence on temporary subsidies, with closures accelerating as inpatient numbers decline. Organizations can move beyond this fragile model by leveraging data-driven insights and value-based care alignment tools that improve operational sustainability. By enhancing workflow and care coordination platforms, hospitals can shift toward outcomes-based models that reduce financial risk and enhance long-term financial solvency.
Digital Divide: Failure to address broadband gaps, cybersecurity risks, and low digital literacy will widen disparities and leave rural communities unable to participate in modern payment reform or care coordination models. Organizations can bridge this gap by navigating technology-enabled care, interoperable solutions, and cybersecurity-ready platforms. These tools allow rural providers to seamlessly integrate into value-based networks and deliver patient-centered care, even in resource-constrained settings.
Chronic disease management: Reliance on fragmented traditional systems leaves rural patients with chronic and behavioral health conditions vulnerable to gaps in care, preventable complications, and high costs. Providers can combat these risks by leveraging workflow tools that integrate physical and behavioral health data into one seamless platform, ensuring comprehensive care delivery. By supporting real-time data and navigation, organizations can scale prevention and management programs that keep patients engaged, healthy and out of crisis.
The most competitive proposals will leverage new and emerging technologies to increase real-time access embedded directly into existing workflows, and foster care coordination partnerships with coordinated and engaged networks. Service provider organizations and governments must demonstrate ROI, interoperability, and measurable results. You will need technology partners that can scale quickly, integrate into existing networks and provide a clear path for sustainable improvements.
The RHTP is an opportunity to reshape rural health care for the next generation by building sustainable health ecosystems that balance prevention, acute care, and community-based services. Even in smaller, rural areas, there is growing momentum around the adoption of AI and advanced analytics, enabling providers to deliver more efficient and accurate care. At the same time, public-private partnerships will be crucial in maximizing economies of scale and sharing best practices across regions. Together, these efforts can establish rural communities as innovation testbeds for value-based care models, generating lessons that have the potential to guide reform efforts nationwide.
For states and counties, the RHTP is a lifeline and a mandate: investing in infrastructure, workforce, and models of care that deliver lasting impact. The opportunity lies not only in stabilizing health care in rural areas, but in reimagining it for the future.
Photo: JJ Gwynne, Getty Images
Vatsala Kapoor He has more than two decades of experience in health policy and public health. She has focused most of her career on health care delivery system and payment reform initiatives at the state and federal levels, where she has served as a consultant and policy advisor. Currently, Kapoor serves as Senior Vice President of External Affairs and Partnerships at Bamboo health. Prior to his work at Bamboo Health, Kapoor served in a variety of roles at organizations, such as the Centers for Medicare and Medicaid Innovation and in the office of former Colorado Governor John Hickenlooper.
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