Stress test: OBBBA, rural vulnerability and innovation

On July 4, 2025, the One Big, Beautiful Act (OBBBA) was signed into law. Its supporters hail it as a vehicle for growth, while critics say it quietly dismantles America's health care safety net.

OBBBA slashes Medicaid and Affordable Care Act subsidies while expanding the deficit with trillions of dollars in tax cuts. Millions will lose insurance and safety net hospitals will face new financial instability. Already overburdened rural health systems will face unprecedented challenges.

But here's another angle. There could be a potential inflection point with this sweeping legislation.

The $50 billion Rural Health Transformation Plan (RHTP) is small compared to surrounding cuts, but it forces rural America to do something our broader health care system has resisted for decades, and is worth learning from: innovate out of necessity.

OBBBA is a stress test and the outcome depends on how we respond.

Why American health care is so difficult to fix

Let's set the levels. The U.S. health care system is expensive, inefficient, and burdened by counterproductive incentives. We spend nearly twice as much as other high-income countries but lag in outcomes. Chronic disease management, maternal mortality and life expectancy all tell the same story: high costs, low returns.

One reason is the gap between traditional healthcare and health technology. Healthtech has shown a willingness to innovate quickly. But traditional healthcare organizations are bureaucratic, difficult to penetrate, and lack the willingness to change that startups take for granted.

This has created a divide in the tools health technology is building, but traditional healthcare rarely integrates them at scale. Hospitals typically operate on profit margins of 1-2%, leaving little room for experimentation. Their structures favor stability over speed and agility, making it extremely difficult to test, adopt, and scale new technologies.

I saw this bay first hand. As a critical care and pulmonary physician, I have worked within traditional systems where margins are thin, structures are rigid, and there is little room for innovation. As an entrepreneur, I experimented with technology designed to make care more efficient, only to see hospitals struggle to adopt some very practical solutions.

Take General Catalyst's recent $485 million acquisition of Summa Health through its Health Assurance Transformation Corporation (HATCo). Summa is a large nonprofit system in Ohio with hospitals, clinics and health insurance divisions. HATCo is turning it into a for-profit testing ground for new technologies and care models.

In fact, venture capital firms need Buy an entire health system Simply creating a testing ground for innovation highlights the scale of the problem. This is not to say that hospitals do not see the value of modern technology; It’s that their operating structures, financial realities, and regulatory obligations make rapid adoption nearly impossible.

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

Rural vulnerability and RHTP

Rural hospitals are at the intersection of razor-thin margins, labor shortages, and geographic barriers. More than 100 rural hospitals across the country are at risk of closing, and more than 600 of them are considered vulnerable. The entire system is fragile.

I think the term rural vulnerability That's appropriate: In this case, providers are operating so close to the edge that even a minor shock could tip them into crisis.

Unlike urban or suburban systems that can rely on diversity and endowment, rural providers lack buffers. They often don’t have a chief innovation officer, CMIO, or capital budget for new infrastructure. They rely on outdated digital systems, their patient volumes are small, and their payer mix is ​​disproportionately Medicaid and Medicare. The conditions that make them vulnerable also make them structurally resistant to the adoption of modern medical technologies.

The RHTP developed in OBBBA attempts to intervene at this critical point. It is investing $50 billion in grants and incentives over the next decade to help rural providers modernize operations, adopt digital tools and pilot new care models. While the dollar figures pale in comparison to the trillions of dollars in Medicaid cuts surrounding them, the program forces a shift that rural health care providers can no longer avoid.

Critics argue that $50 billion over ten years is a stopgap measure compared with the scale of Medicaid cuts. They are right. But the plan's importance lies not in its raw size.

Its potential lies in its role as a forcing function, forcing fragile systems to be rewired for the future. If necessity is the mother of invention, then rural vulnerability may be the mother of change.

Never waste a good crisis

RHTP is important because it enforces promises. The plan ties funding to transformation, requiring rural hospitals to upgrade digital infrastructure and implement interoperability, telemedicine and compliance systems. By subsidizing modernization, it lowers financial barriers that prevent rural systems from adopting and scaling modern tools.

If deployed correctly, RHTP funds can help rural systems lead in areas where traditional health lags behind:

• virtual first aid: Rural communities where distance makes in-person care impractical can simulate the reality of virtual priority care.
• Team-based care becomes the norm: Major medical centers already have good examples of team-based care, but rural areas need to rely on this model because physician shortages hit them hardest.
• Modern compliance and quality systems: Rural service providers cannot afford large administrative staff. Adopting digital compliance tools and embedding quality assurance into daily work, rather than adding to bureaucracy, can make oversight sustainable.
• The facility is a good size: Not every community needs a full-service hospital. Modular urgent care, chronic disease management and mobile clinics can provide better services to patients at lower costs.

Success will not be achieved by patching old systems. It will be about creating something new under pressure.

If these interventions are deployed correctly, the return on investment can far exceed the initial investment. Telemedicine has been shown to save patients $147 to $186 per visit, avoiding travel and lost productivity, while remote patient monitoring programs have achieved a 22% return on investment and reduced hospitalization costs by thousands of dollars per patient.

These are just a few of the results we can see from smart implementations.

The paradox of vulnerability

The most fragile things can also be the most transformative. Rural fragility is real, but again, necessity is the mother of invention. Rural service providers cannot delay adoption. If they don't reinvent themselves, they will collapse.

For decades, health tech companies have developed tools that promised greater access, efficiency, and quality. But traditional healthcare has always been constrained by operational headwinds, leaving promising technologies trapped in pilot purgatory or viewed as mere luxuries.

RHTP can change this dynamic by linking survival with modernization. It forces rural systems to open doors that separate them from medical technology innovators. So the question is: Will traditional healthcare adopt the same rapid iteration and user-centered design philosophy that medtech has embraced for years?

If the RHTP is successful, it could provide lessons for the rest of the country. How to activate teams in different ways. How to build 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 transform from a canary in the coal mine to a testing ground for models that make the entire U.S. health care system more efficient and patient-centered.

Choices that shape your system

Holding on to our old patterns is tantamount to waiting to fail. We need to adopt the tools, team structures and delivery models required by this ongoing crisis.

RHTP may be rural America’s last best chance to innovate before the safety net completely tears apart. For the country, it could be a blueprint for escaping an overpriced and underperforming system.

As a physician, I see firsthand how crises can redefine possibilities. As an entrepreneur, I believe that necessity can bring about change. But most importantly, as someone who works with patients, providers, and innovators, I know the ingenuity and resilience of this field.

We have no choice but to innovate, and we need to do it quickly. Despite the difficulties we face, I remain hopeful that we can seize this moment and build a system that delivers on the promise of health care: accessible and compassionate care for all.

Photo: Peshkova, Getty Images

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