Envisioning the Future of Rural Health

Nov 2, 2020Perspectives, Strategy, US Health

In our last article we explored how the underlying structure of rural health care delivery in the US is impractical and ineffective in sustainably addressing community health needs. In part II, we discuss what a rural healthcare delivery system of the future could look like, and the boundary conditions and potential impacts. We welcome your perspectives and feedback as we continue this important conversation.

by Ben Jenson, Matt Holman and Gavin Boileau

Our intention with this post is to imagine what a better future for rural health care could look like, including the key elements or building blocks most critical to making the transition. We also consider the sustainability of proposed future models and the potential impact on rural communities.


The pace of innovation in healthcare is constrained by a complex web of existing regulatory and incentive mechanisms that collectively reinforce the status quo. While these forces remain significant, we believe the disruptions created by the COVID-19 pandemic offer an unprecedented opportunity for systems-level change.

Many of the regulatory adjustments associated with COVID-19 are supportive to transforming rural healthcare, including CMS Section 1135 Waver and Section 3704 of the CARES act, which (in some cases temporarily) enable: (i) a meaningful removal of barriers to inter-state telehealth regulations, (ii) non-HIPAA compliant platforms, and (iii) “rural-to-rural” telemedicine by allowing rural sites to serve patients at other rural sites (including their own place of residence). The continuation of these practices, particularly the first and last, are instrumental towards enabling the telehealth component of the system we propose.

While current conditions provide some tailwinds, transforming rural health also requires trade-offs that current reimbursement models strongly disincentivize. In general, delivery of high-quality and cost-effective care will require a significant shift away from delivery of elective surgeries and specialty care on-site at rural facilities. These procedures tend to be major revenue drivers for rural facilities and systems, and thus will require that payers, particularly Medicare/Medicaid, increase reimbursement for primary care and behavioral health services or otherwise redesign incentives to compensate for this shift.


Modernizing our rural health care delivery system will require changes across three broad dimensions, in ways unique to individual community needs, in shifting away from the current paradigm of rural health as a full-service one-stop shop to one that is more fit for context and purpose given our current available technology and resource constraints:  

Shifting Site of Care Paradigms: Quality outcomes in healthcare tend to favor volume and comparative advantage, and for most complex specialty care the level of procedural volume and expertise is lower in rural communities than in regional or urban hubs.  This does not mean that rural residents should settle for poor care or outcomes, just as lacking a high-end department store does not mean they cannot have high-end merchandize delivered to their doors within a few days.  The rural retail experience has been thoroughly reordered over the past decade, and rural health can produce better outcomes at lower costs by applying a bit of modern technology to evolve the current supply chain and logistics of care delivery.  In an ideal future, the majority of rural healthcare resources would focus on delivering comprehensive primary care that addresses a range of physical, behavioral and chronic care needs (including ancillary preventive care such as vision and oral health). Low-volume specialty care services and procedures should largely be provided via regional or urban centers of excellence, via telehealth-based models for visits or consultations or via stabilization and transport for more urgent procedures. Depending upon regionally-specific specialty needs a smaller and more targeted set of specialty services could continue to be delivered within rural communities. Emergency services would continue to be provided but be further focused toward a stabilization, triage, and transport model which limits required local hospital bed capacity. All of these changes would require rural health systems and payers to adopt more sophisticated referral mechanisms and networks as well as fundamental changes to incentive mechanisms to achieve buy-in from providers and patients alike.

Re-Architecting Infrastructure: In practice, shifting specialty and procedural volume out of rural communities may look less like a downsizing and more like a repurposing of existing space and shared resources. Hospitals and their affiliated clinics are often the economic engines of the rural areas they serve and provide considerable high-quality and multi-purpose space. Repurposing space could allow rural health systems to serve as a flexible center of holistic, community health. Operating rooms, intensive care units and other spaces no longer needed could be retrofitted into a space for community groups, civic gatherings, and seminars tailored toward physical health as well as social determinants of health. Private or mission-driven enterprises, including nutritional counselors, private retail pharmacies, or charitable groups, could leverage excess space.

Evolving the Rural Health Workforce: The proposed model of care would also require adjustments to the workforce of rural hospitals: namely an expansion of primary care and behavioral health providers as well as supporting resources to manage the enhanced logistics related to referrals, transport and case management necessary to provide an integrated patient experience. This should be buttressed by the expansion of education programs tailored toward rural health needs, including advance practice providers (e.g., NP/PA) that can play broad roles within the primary care-driven model. While specialty care delivered at individual rural hospitals will be downsized, COVID-19 presents a significant opportunity. In the past, rural health systems have struggled to hire specialists due to low patient volumes. However, recent telehealth regulation changes have allowed for rural-to-rural telehealth consults. This means that certain medical specialists can be located in rural areas and fill their time with regional service provision via a combination of telehealth consults and in-person care. Lastly, supplemental workforce adjustment is needed to adapt to a response, stabilization, triage, and transport model for acute situations. This could include additional EMTs and individuals able to staff the vehicles (e.g., helicopters, autos) needed for patient transport.

All system-wide changes come with tradeoffs. The adjustments we propose prioritize improving quality of care, increasing the sustainability of health care delivery in rural areas, and ensuring a breadth of access to care (understanding that much of this care will be delivered remotely). These steps reflect, at the highest level, a shift from profitability to sustainability of rural health care delivery. Without adjustments like these, we believe it is unlikely that the current model of rural health care delivery will be able to sustain itself.

While the model described will require major shifts to reimbursement, patient behavior, existing infrastructure, and likely policy to implement at scale, there are established cases where similar models currently exist and work very effectively.  One such model is Southcentral Foundation’s Nuka System of Care in Alaska, which focuses on the physical, mental, emotional, and spiritual wellness of its “customer owners”. (for more information, see this case study developed by their former CEO, Katherine Gottlieb). 


Rural health system sustainability is a complicated balance of cost and revenue considerations. On the cost side, patients will face competing out of pocket considerations, with the possibility of additional travel for acute cases, that may be offset fully or in part by reduced travel required given an increased use of telehealth care delivery. For health systems, the fixed costs related to providers, equipment and real estate oriented toward specialty care will be reduced, but costs related to transportation (e.g., ambulances & helicopters as well as their associated emergency personnel) will increase. The corresponding reimbursement mechanisms and regulatory framework will need to adjust to accommodate and sustainably compensate for these changes (e.g., reimbursement for primary care, referrals resulting in lower total cost of care, and coverage of emergency transport within an overall episode of care). It is likely that bundled payment or partial capitation models will be critical to adequately align incentives within this new model.

The challenge in making the case for improving quality in rural communities is that many patients do not perceive that they are receiving “low quality” care, and that the changes proposed here would in fact reduce the care available within their communities. In reality, what we are proposing would, if implemented well, result in far more comprehensive care and improved outcomes for most patients.  By focusing on primary care, acute care stabilization and triage, and specialty care referrals, rural health systems will be able to continue managing the vast majority of needs within the community while more rapidly connecting patients to care they need outside the community when they need it.

By focusing on lower-acuity care and leveraging telehealth to increase entry points into the health system, access can be expanded in the future model without any additional brick and mortar infrastructure being required. While this can be seen in some ways as a net neutral, the increased focus on supporting expanded (e.g., dental, behavioral health, etc.) service provision should provide a boost to primary care and public health resources in ways that makes preventive care more accessible and sustainable in the future.


Transforming rural healthcare will require many years and changes to incentives, regulations, infrastructure, and workforce. These changes themselves do not exist in a vacuum. This may require seemingly non-healthcare investments such as improvement of roads and airports, attracting new talent and retraining existing talent. It will require creativity in re-purposing current infrastructure and tough decisions in eliminating services and providers that community members are attached to.  It will require thinking very differently about hospital finances and likely absorbing some turbulence and losses during the transition. It will require both payers and providers to take more risks, literally and figuratively, in testing and transitioning toward new incentive models. It will also require new sources of government and private philanthropic funding to help fill the investment gap in expanding the pipeline of providers offering primary care and supporting services in rural areas and enabling critical technology and infrastructure investments.

Rural health care delivery in the US is built on an old model, one that is propped up by federal funding structures and business practices that do not adequately address concerns of long-term sustainability nor the true health needs of their communities. The COVID-19 pandemic has revealed the imperative and created the conditions for broad systemic change in a way we have not seen in a generation. While we often think of healthcare innovations as emerging from urban health-tech hubs, perhaps the most exciting systemic changes to improve access and outcomes exist far to the periphery of traditional funding and focus within our rural communities.