Watch the full webinar, “Can the Rural Health Transformation Fund Deliver on its Promise?” above.

When Newsweek convened leaders from Sanford Health, InterSystems and Lumeris to discuss the $50 billion Rural Health Transformation Fund, the conversation began where many discussions about rural health do: with cautious optimism. Three months into implementation, panelists described states moving quickly, applications pouring in and early funding reaching providers.

But the discussion took a sharper turn when Dr. Tim Ferris, vice president of healthcare practice at InterSystems, challenged what he sees as the biggest misconception surrounding the initiative.

“It is not about saving rural hospitals in America, full stop,” Ferris said. “The underlying economic issues that are causing so many of them to close… are driven by the fact that their two primary payers, Medicare and Medicaid, pay less than it costs to hospitalize a person.”

Rather than judging the Rural Health Transformation Fund (RHTF) by whether it prevents every rural hospital closure, Ferris argued it should be measured by whether it improves access to care, information sharing and care delivery despite those financial realities. In his view, the program addresses a different problem than the structural reimbursement issues threatening rural providers.

Current data underscores the scale of that challenge. More than 40 percent of rural hospitals are operating at a loss, 417 are considered vulnerable to closure and more than 200 have closed or eliminated inpatient services since 2010, according to Chartis’ 2026 rural health report. At the same time, the RHTF is intended to inject $50 billion over five years into rural health care transformation rather than directly replacing lost operating revenue.

The distinction resonated throughout the panel.

Matt Hocks, executive vice president and chief operating officer at Sioux Falls, South Dakota-based Sanford Health, agreed that he does not see the program primarily as a hospital rescue package.

“I don’t see it as necessarily saving rural hospitals,” Hocks said. “But I do think it allows us to think about rural care differently.”

For Sanford, that means investing in technology that allows more care to remain in local communities instead of sending patients hours away to tertiary medical centers.

“We don’t want to build more hospital beds in our major medical centers,” Hocks said. “We want people to stay local.” Technology, virtual care and stronger support for clinicians working in rural facilities, he argued, make that possible.

Dr. David Carmouche, chief medical and commercial officer at Lumeris, broadened the discussion even further. Access, workforce and technology, he argued, are inseparable.

“Patients don’t experience infrastructure,” Carmouche said. “They experience how infrastructure gets leveraged.” The goal, he said, is ultimately to improve health outcomes by making care more available, higher quality and more proactive.

That emphasis on infrastructure became one of the dominant themes of the webinar.

Hocks noted that many rural hospitals simply have not been able to modernize because razor-thin operating margins force technology projects to remain on the back burner.

“Usually technology is the last thing we address,” he said. “We let it run until it breaks and then we fix it.” That approach, he warned, limits the adoption of virtual nursing, remote expertise, cybersecurity improvements and other capabilities needed to support today’s workforce.

Ferris compared the opportunity to the HITECH Act, which accelerated EHR adoption nationwide.

“The fact is, it digitized health care in America,” he said. “There’s an opportunity here to do the same sort of thing for rural health care.” This time, however, he argued that interoperability, scalability and reducing “data friction” must be built in from the beginning rather than added later.

Artificial intelligence surfaced repeatedly as the next layer built on top of that digital foundation.

Carmouche described a future in which comprehensive, real-time patient data allows AI to monitor patients between visits, identify those beginning to deteriorate and extend the reach of an already constrained primary care workforce.

“The access to real-time data and the computing power of AI… allows us to envision a world where we could deliver care with the same workforce to many, many more people,” he said.

Hocks pointed to behavioral health as one example where those capabilities could have immediate impact.

“The missing link is really that ability to connect with those patients,” he said. “Chatbot technology, AI, trying to understand where our patients are at and how we can meet them there.”

Even as the panel focused on technology, none of the speakers suggested it alone would solve rural health care’s financial challenges.

Ferris repeatedly returned to the underlying reimbursement issue, arguing that transformation efforts and payment reform are separate conversations that can both be true at the same time. The Rural Health Transformation Fund may improve how care is delivered, but it cannot by itself reverse decades of economic pressure facing rural providers.

That perspective arrives at a particularly consequential moment. National debate continues over the interaction between the RHTF and broader federal Medicaid policy, with analysts arguing the transformation fund can support innovation but is unlikely to fully offset longer-term reimbursement pressures facing many rural hospitals.

The fund’s success should not be measured solely by the number of hospitals that remain open, the panelists agreed. Instead, the more meaningful question may be whether patients can receive higher-quality care closer to home, whether clinicians have better information when they need it, and whether technology helps a limited rural workforce serve more people more effectively.

Those are different metrics than hospital survival. But as Ferris argued, they may be the metrics the Rural Health Transformation Fund was designed to improve in the first place.

Click here to register for Newsweek’s next interactive health care webinar on Monday, August 17: “What Does it Take to Lead in the Value-Based Care Economy?: A Fireside Chat With Optum Health CEO Krista Nelson.”