Faced with growing challenges, rural hospitals across Northern California are finding innovative ways to do more with less. Rural hospitals are not a “nice to have” — they are essential to the strength, stability, and survival of California’s entire health care system. When a rural hospital closes, the ripple effects are immediate and far-reaching:
- Patients suffer, and communities with aging populations and limited transportation options experience worse outcomes.
- Urban hospitals feel the strain as patients from shuttered rural facilities are forced to utilize already overburdened emergency departments.
- Without care closer to home, patients often forgo care until it becomes a crisis — and this increases costs for the whole health care system.
For rural hospitals struggling to get by, a promised Rural Health Care Transformation Fund offers slim hope for a lifeline.
Included in the One Big Beautiful Bill Act is a one-time $50 billion grant aimed at helping rural hospitals nationwide improve rural health care. The catch: Those dollars are not exclusive to hospitals or health care providers, and up to 10% of the funds will be set aside for state management costs. Half of the overall funding will be divided equally among states, while the other half will be distributed based on Centers for Medicare & Medicaid Services’ (CMS’) discretion. Further compounding these challenges is that hospitals may not apply directly; the governor’s office is responsible for developing a statewide proposal. For more details about this process, see the article below.
If California’s application for the equally distributed portion is approved, the state could see up to $500 million in funding, $50 million of which would be used for state administrative costs. (California is unlikely to receive discretionary funding.) Any funding received would support efforts to build technology infrastructure, recruit additional health care professionals, and improve rural access and outcomes.
But whether California hospitals will see any of those funds, or how much, remains to be seen. When the application portal opens in September, it will kick off a frenzy of activity ahead of CMS’ Dec. 31, 2025, deadline to approve or deny applications. More details can be found in an infographic on the program and a recorded webinar hosted last week.
Hospital Council will continue to provide updates in Council Connect as they become available. In the challenging times ahead, every dollar matters — and your associations stand ready to fight for every penny.