Stress test: OBBBA, rural fragility and innovation

On July 4, 2025, the “One, Big, Beautiful Bill Act” (OBBBA) was signed into law. Its supporters hailed it as a vehicle for growth, while its critics called it a quiet dismantling of America’s health care safety net.

OBBBA cuts Medicaid and ACA subsidies while inflating the deficit with trillions in tax cuts. Millions of people are at risk of losing coverage, and safety-net hospitals will face further financial instability. And rural health systems, already strained, will be strained like never before.

But there is another angle here. There could be a potential inflection point in this sweeping legislation.

The $50 billion Rural Health Transformation Program (RHTP) is modest compared to the budget cuts surrounding it, but it requires rural America to do something that our health care system as a whole has resisted for decades and would do well to learn from: innovate out of necessity.

OBBBA is a resistance test whose outcome depends on how we react.

Why U.S. healthcare is so hard to fix

Let’s set the standard. The U.S. health care system is expensive, inefficient, and driven by counterproductive incentives. We spend almost twice as much as other high-income countries, but results lag behind. Chronic disease management, maternal mortality and life expectancy all tell the same story: high cost, low return.

One reason is the gap between traditional healthcare and health technology. Health technologies have shown a desire to innovate quickly. But traditional healthcare is bureaucratic and difficult to break into, and lacks the appetite for change that startups take for granted.

This creates a chasm where health tech builds the tools, but traditional healthcare rarely integrates them at scale. Hospitals often operate on margins of 1-2%, leaving little room for experimentation. Their structures reward stability over speed and agility, making it extremely difficult to test, adopt, and scale new technologies.

I saw this abyss with my own eyes. As a critical care physician and pulmonologist, I have worked within the traditional system, where thin margins and rigid structures leave little room for innovation. And as an entrepreneur, I’ve piloted technology designed to make care more efficient, but I’ve seen hospitals struggle to adopt very practical solutions.

Consider General Catalyst’s recent $485 million purchase of Summa Health through its Health Assurance Transformation Corporation (HATCo). Summa is a large nonprofit system located in Ohio with hospitals, clinics and a health insurance arm. HATCo makes it a for-profit testing ground for new technologies and new models of care.

The fact that a venture capital firm had to buy an entire health system Simply creating a testing ground for innovation highlights the scale of the problem. It’s not that hospitals don’t see the value of modern technology; it’s that their operational structures, financial realities, and regulatory obligations make rapid adoption nearly impossible.

The OBBBA widens this gap by destabilizing the system, but it also opens a door.

Rural fragility and RHTP

Rural hospitals sit at the intersection of low margins, workforce shortages and geographic barriers. More than 100 rural hospitals are already at risk of closing, and more than 600 are considered vulnerable nationwide. The whole system is fragile.

I think the term rural fragility is appropriate: a situation in which providers operate so close to the edge that even minor shocks can plunge them into crisis.

Unlike urban or suburban systems which can rely on diversification and endowments, rural providers lack a margin of safety. They often don’t have chief innovation officers, CMIOs, or capital budgets for new infrastructure. They rely on outdated digital systems, their patient volume is low, and their payer split is disproportionate between Medicaid and Medicare. The conditions that make them fragile also make them structurally resistant to the adoption of modern health technologies.

The RHTP, divided within the OBBBA, attempts to intervene at this breaking point. It dedicates $50 billion in grants and incentives over the next decade to help rural providers modernize their operations, adopt digital tools and test new models of care. Even though the dollar amount is dwarfed by multibillion-dollar cuts to Medicaid, the program imposes a change that rural providers can no longer avoid.

Critics say $50 billion over a decade is just a Band-Aid compared to the scale of the Medicaid budget cuts. They are right. But the importance of the program does not lie in its raw size.

Its potential lies in its role as a force, forcing fragile systems to rewire themselves for the future. If necessity is the mother of invention, rural fragility could be the mother of transformation.

Never let a good crisis go to waste

RHTP is important because of the commitments it imposes. The program ties funding to transformation, requiring rural hospitals to upgrade their digital infrastructure and enable interoperability, telehealth and compliance systems. And by subsidizing modernization, it lowers the financial barriers that prevent rural systems from adopting and developing modern tools.

If deployed wisely, RHTP funds could help rural systems lead in areas where traditional health lags:

• Virtual First Aid: Rural communities, where distance makes in-person care impractical, could model what virtual first aid actually looks like.
• Team care as the norm: There are already excellent examples of team-based care in large medical centers, but rural settings will need to build on this model as the physician shortage hits them hardest.
• Modern compliance and quality systems: Rural providers cannot afford armies of administrators. Adopting digital compliance tools and integrating quality assurance into daily work, rather than adding layers of bureaucracy, could make monitoring sustainable.
• Right-sized installations: Not every community needs a full-service hospital. Modular urgent care, chronic disease management and mobile clinics can better serve patients at lower costs.

Success will not be achieved by patching the old system. It will be about building something new under pressure.

And if these interventions are deployed well, the return on investment could far exceed the initial investment. Telehealth has been shown to save patients between $147 and $186 per visit in avoided travel and lost productivity, while remote patient monitoring programs have generated a 22% positive ROI and reduced hospitalizations by thousands of dollars per patient.

These are just a fraction of the results we could see with smart implementation.

The paradox of fragility

What is most vulnerable can also be most transformative. Rural fragility is real, but once again, necessity is the mother of invention. Rural providers cannot delay adoption. If they don’t reinvent themselves, they will collapse.

For decades, health technology companies have created tools that promise increased access, efficiency and quality. But traditional healthcare has always been limited by operational constraints that keep promising technologies stuck in pilot purgatory or seen only as a luxury.

RHTP could change this dynamic by linking survival to modernization. This requires rural systems to open the door that separates them from health technology innovators. So the question is: will traditional healthcare adopt the mindset of rapid iteration and user-centered design that healthcare technology has adopted for years?

If the RHTP succeeds, it could produce lessons for the rest of the country. How to activate teams differently. How to create quality systems without unnecessary red tape. How to make technology the backbone of delivery rather than an optional add-on.

The stakes are very high, but if done right, rural health could move from being a canary in the coal mine to a testing ground for models that would make the entire U.S. health care system more efficient and more patient-centered.

The choice that shapes the system

Clinging to our old patterns is tantamount to expecting failure. We must adopt the tools, team structures and delivery models that this current crisis demands.

The RHTP could represent the last chance for rural America to innovate before the safety net is completely torn apart. For the nation, this could be a way out of an overly expensive and underperforming system.

As a doctor, I have seen how crisis redefines what is possible. And as an entrepreneur, I believe necessity can bring about transformation. But more importantly, as someone who has worked alongside patients, providers, and innovators, I know the ingenuity and resilience in this field.

We have no choice but to innovate, and it must happen soon. Despite the challenges we face, I am hopeful that we will seize this opportunity to build a system that delivers on the promise of health care: accessible, compassionate care for all.

Photo: Peshkova, Getty Images

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