How Medicaid Cuts Can Disrupt Rural Healthcare

As Congress debates cutting the federal Medicaid budget, experts warn that rural healthcare, which is already in crisis, could be pushed further to a breaking point.

Marcel Botha, founder and CEO of healthcare data and technology company 10XBeta, told Managed Healthcare Executive these proposed cuts risk hurting the already fragile network of rural hospitals and clinics, particularly in vulnerable states where Medicaid enrollees typically have poor health. Some of these states include Kentucky, Mississippi, South Carolina, Alabama, Pennsylvania and West Virginia.

Marcel Botha

“It will be devastating for Medicaid to just be reduced or cut to the point where it's no longer effective in supporting 66 million people in the U.S. population—over 20%— and I think that we have not done enough to attack the problem at its root,” Botha said. “There's lots to be done, and we cannot create different tiers of society based on where you live—geographically— and choosing whether you will be saved or not saved from a chronic illness because of where you chose to live, because everyone has served the U.S. infrastructure in some way or another.”

The rural health crisis is not new.

In 2023, roughly 35% of community hospitals were in rural areas. The millions of folks at risk in these areas face hospital closures, depopulation and limited access to both primary and specialty care, Botha stressed.

A report from the American Hospital Association (AHA) in 2022 revealed that 136 rural hospitals shut down between 2010 and 2021, including a peak of 19 closures in 2020.

The report stated these issues were due to inadequate reimbursement, limited patient volume, workforce shortages and complex regulations—challenges that were made worse by the financial strain of the COVID-19 pandemic.

It was also mentioned in the report that soaring costs for labor, medications and supplies have only deepened the crisis, putting rural healthcare access at risk.

These long-standing challenges are being exacerbated by the Trump administration’s Department of Government Efficiency (DOGE) initiative, which has cut federal agency budgets, including funding for telehealth and rural health programs.

According to Botha, DOGE’s approach has been “superficial,” targeting easy budget line items instead of addressing systemic issues.

He said DOGE is “creating or expanding the healthcare deserts that we are trying to fight through (with) innovation and public-private partnerships.”

Botha pointed out that mobile technology and partnerships could provide hospital-grade care even in the most remote areas.

“We might develop a mobile fleet of care that would rival the best-in-class hospital experience at the rural and even frontier edge,” he said, adding that the effort must be designed alongside the people it’s meant to serve.

“You have to go to (the rural stakeholders),” he added. “That co-design effort is something that we have leaned into and was a requirement of the ARPA-H program.”

As part of the ARPA-H PARADIGM initiative—a federally supported research program focused on transformative health solutions—10XBeta is collaborating with healthcare systems such as Massachusetts General Hospital (MGH), device makers and educators to design a new model of rural care.

This model centers around mobile health platforms that bring high-quality services directly to rural and frontier populations.

Botha said the goal of this model is to develop a “vertically integrated, fully mobile, heavily digital” healthcare system capable of meeting patients where they are, instead of expecting them to travel hours for care they may not receive.

One promising development is transforming diagnostic equipment into smaller, more portable devices, he shared.

In the MGH collaboration, 10XBeta is working on ruggedized, lower-cost CT scanners that are small enough to travel mobile in a van, for example.

Botha said this tool could open up access in areas such as cancer screenings, where in rural healthcare, many folks wouldn’t get to until it’s too late.

However, Botha noted that technology alone can’t fill the gap of providing access to those in rural deserts.

“Healthcare is a very human-to-human interaction—it requires you to form a trust relationship with a doctor or caregiver,” he said.

This human-centered approach also helps debunk common misconceptions, such as virtual care can replace in-person services.

“A lot of Silicon Valley tech thinking has driven us to the point where there is no customer service,” he said. “Customer service isn’t AI. Customer service isn’t never speaking to a human. Healthcare doesn't work that way. So, we cannot just take space away from that.”

He added that while technology can’t replace that connection, it can be used to innovate through paths where federal solutions adapt to local needs rather than create a one-size-fits-all model.

This means investing in infrastructure, growing the healthcare workforce and encouraging innovation that takes cultural and practical challenges into account.

“(Policymakers) should prioritize their reimbursement reforms for telehealth and mobile care such that everyone is incentivized to provide better quality care efficiently,” he added.