3/19/2026

UPPER MICHIGAN - Michigan is set to receive about 173-million dollars through a new federal rural health fund created under last year’s budget law. Federal officials say the Rural Health Transformation Fund is designed to expand access to care, strengthen the rural health workforce and modernize services in underserved communities. But some health policy experts say the funding is unlikely to make up for deeper Medicaid cuts expected in the coming years. Michael Shepherd, a University of Michigan professor who studies rural health policy, says rural hospitals already face major financial challenges.

                    0:11  "Rural hospitals have an inability to take advantage of economies of scale that more urban hospitals and larger health systems can take advantage of."

Shepherd went on to say hospitals have high fixed administrative costs, which can be harder for rural facilities with fewer patients to cover. Supporters of the federal program say the funding could help states invest in telehealth, workforce recruitment and new models of care for rural communities. Michigan is accepting applications for a share of the grant supporting provider partnerships, workforce recruitment and telehealth services.