Dr. Carole Myers
Welcome to Health Connections, the show about people, health, and policy. I'm Dr Carole Myers. Late in 2025 Tennessee was awarded a federal Rural Health Transformation Grant. Today, I'm joined by Dr. Matt Harris, a distinguished professor of health economics with the Haslam College of Business and the Boyd center for Economics and Business Research. Dr. Harris, could you please share the basic components of the Tennessee proposal that was funded?
Dr. Matt Harris
Sure thing. So the grant is a $207 million grant for the next fiscal year, and the pillars in it are about improving rural health, improving sustainable access, shoring up workforce and rural health and ensuring that there's adequate supply of providers. And then the last two pillars are about finding ways to innovate and the way that care is provided with technology and looking for cost efficiency. And really what the grants about, though, is about trying to improve the cost effectiveness of providing rural health care.
What is your assessment of Tennessee's proposal in the funding award?
The proposal, I think, is strong. The challenge is that you know, the reason that this, the program exists, is that you know, HR1 is going to impose about $900 billion and cuts to Medicaid, you know, over the next decade. And this is a $50 billion attempt to sort of offset some of the challenges that are going to come with that 900 billion reduction in funding. While theoretically, you know the state of intent is about transforming rural health, but rural health and health in general as a social problem, and so the money coming in was mostly going to be helpful in terms of trying to figure out ways to deliver the care that needs to be delivered cost effectively, in anticipation of the offset from those future reductions in funds coming in.
So how do those two things line up? Is there enough in this grant to close the gap?
The grant would have to be wildly successful to close the gap, and I don't say that to poo poo the grand at all. You know, this is a project that's worth doing, and that's worth undertaking. I wish it was resourced far better than it is, you know. And so we're working with some colleagues here at utk also Chattanooga and UTHSC were involved with a center of excellence grant, which is really looking at pilot programs to sort of figure out the kinds of things that can be transformative for rural health in Tennessee. But again, the key thing is is not just about improving health, it's about trying to improve the cost efficiency with which we're addressing rural health, and that includes things like transportation challenges.
And we're talking about an implementation for fiscal year 2026 and the grant is for the duration of that fiscal year. Help me understand what's going to happen between now and the start of the fiscal year, and what your thoughts are about that.
I mean, hopefully what happens is a lot of people come forward with brilliant ideas and ways and programs that can be implemented that are locally actionable and sustainable. The good news is, is that these funds are available, not just for this year. I think $10 billion was awarded in the first year, we got 207 million of that, which is great, but there's the opportunity to reapply for these in future years going forward. And so part of Tennessee's job is going to be to measure the efficacy of these programs and to measure the impact, so that we're well positioned to try to get funding in future years to continue the work.
Any parting words about the rural transformation health grants?
I think that the big key with this is finding ways to get people connected with providers, and there's opportunity for technology to do that, and it needs to work, because the coming Medicaid cuts are going to be a threat to solvency for rural clinics and rural hospitals.
