Opinion: What Michigan communities need most from Rural Health Transformation Program

By Michael E. Shepherd, Bridge Michigan 
October 22, 2025

Rural Michigan has many health needs and increasingly limited resources to meet them, including people. Health care depends on providers, and Michigan needs a robust health care workforce to meet the needs of the state’s rural population. Created as part of the One Big Beautiful Bill Act (OBBBA), the Rural Health Transformation Program can assist Michigan in addressing these challenges. 

The Rural Health Transformation Program is a five-year, $50 billion grant program designed to calm concerns over the negative effects of OBBBA on rural health providers, as the cuts to Medicaid have rural Michigan facing an estimated loss of $5.6 billion in Medicaid spending over the next 10 years – the sixth most of any state in the country. These cuts are expected to result in thousands of people losing health insurance, while creating further significant financial hurdles for rural health care providers. 

The transformation program includes two pots of money: one half to be divided equally among the states and one half to be distributed at the discretion of the director of the Centers for Medicare & Medicaid Services (CMS) — all pending an approved application by CMS. At worst, the state will receive no funding if the application is denied by CMS; at best, roughly one-third of the losses from Medicaid can be indirectly offset. 

CMS has called on states to spend their shares of transformation fund dollars within five strategic goals: Making Rural America Healthy Again, Sustainable Access, Workforce Development, Innovative Care and Tech Innovation. Workforce Development and Sustainable Access spending, which go hand-in-hand, offer rural Michigan much needed resources to shore up access for vulnerable rural Michiganders for years to come. 

Rural Michigan faces considerable health care workforce and access sustainability challenges. Based on data from the Health Resources and Services Administration, Michigan has the fourth most residents who live in a rural county with either a complete or partial primary care workforce shortage, totaling 1.7 million rural Michiganders. Additionally, 1.75 million rural Michiganders live in a rural county with a full or partial mental health workforce shortage, the sixth most in the nation. Further, a full 40% of rural Michigan counties have no OB/GYNs practicing within their borders. All of which highlight the need to improve workforce recruitment efforts and access stability for rural Michigan.  

Many of these workforce and access issues are most visible in the communities with Michigan’s rural hospitals, especially in the Upper Peninsula and Northern Michigan. Despite significant existing workforce shortages, Health care is still the number one employer in roughly one-quarter of rural Michigan counties. For each of these counties, hospitals are the largest employer of health care professionals from primary care to labor and delivery to behavioral health. 

The already limited availability of the rural health workforce is further jeopardized by the prospects of rural hospital closures on the horizon, with around 30% of rural hospitals having negative operating margins. Without resources, these hospitals will close, and many communities will lose their primary source of care. Without workforce investment, these providers will struggle to meet the needs of their communities. 

Investments in workforce and sustainable access can have massive economic effects for these communities, as health care jobs are among the highest paying in many rural communities. Research has shown that a robust health care workforce can also have important effects on health outcomes, as communities with more dense health care workforces tend to have better health, and in rural Michigan, many of the communities with largest health care workforce shortages rank among the worst in the state in chronic disease prevalence and overall health.

While technology upgrades and innovations in care are important and, in many cases, much needed, we can’t “make rural Michigan healthy again,” without access to a robust and sustainable health care workforce. Rural Michigan’s health care workforce should be prioritized in the state’s Rural Health Transformation Program application to best meet the needs of our state.

This article first appeared on Bridge Michigan and is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License.