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KFF Health News reported on states "racing to win their share of a new $50 billion rural health fund." As context, the budget and spending bill passed in July is expected to reduce "federal Medicaid spending on health care in rural areas by $137 billion over 10 years." The article notes that the $50 billion fund was added "as a last-minute sweetener to win the support of conservative holdouts who worried about the bill's financial fallout for rural hospitals." However, the innovation director at Centers for Medicare & Medicaid Services (CMS) has explicitly noted that this $50 billion is not meant to directly offset the reduced revenue, but rather fund innovative approaches to healthcare delivery.

Medicaid's 2024 spending was $909 billion. If the $137 billion is evenly spit across 10 years, then the percentage drop does not seem that significant. However, Medicaid historically has struggled to cover the costs for all eligible patients, and many physicians do not accept Medicaid because of its low reimbursement rates. On one hand, this drop seems cruel, but on the other hand, one might ask how else will potential solutions be discovered without motivated experimentation. It seems likely that the demonstration period of five years will end up being too short of a window to see if new ideas are able to truly transform healthcare delivery in rural settings.

Since around the time of the budget bill this past summer, policy analysts have been warning about the expiration of health insurance subsidies. Lawmakers from both parties have expressed concerns about how their constituents will be affected, but Congress has not resolved the issue. KFF Health News reported on how one political party has been trying to force the issue by refusing to approve new funding until the issue has been addressed. The other major political party wants to delay addressing the issue, with one leader from that party dubbing it "a Dec. 31 issue."

However, open enrollment generally starts November 1, meaning that insurers will soon be sending out renewal notices soon, which will indicate how much patients will need to pay for their insurance premiums. Delaying addressing the issue until later in the year will likely cause many patients to not renew. Whatever the goals are of the party not wanting to address the expiring subsidies, their position seems dangerous given that "More than three-quarters of Americans want those tax credits to continue, according to a new KFF poll."

Traditional Medicare has generally avoided the practice known as prior authorization, but KFF Health News has reported that they are now not only considering expanding use of the practice, but also using AI with it. Both doctors and patients have criticized the practice of prior authorization, where insurers require doctors to seek approval for certain procedures before the insurers agree to pay for most or all of the costs associated with those procedures. Insurers use prior authorization to reduce fraud and inappropriate treatments. However, even when the practice is not abused, the extra steps for review and the denials can be very challenging for providers and patients.

While Medicare Advantage plans use prior authorization and private insurers have been known to use AI in their prior authorization reviews, traditional Medicare generally has not. However, as the current administration tries to spend more efficiently, they are piloting the use of AI in conjunction with the practice of prior authorization. This departure from historical norms might allow for some cost savings, but will most likely set Medicare down the path of incurring the same frustrations that patients and doctors have encountered with private insurers.

NBC News highlighted a recent study showing that "After hospitals were acquired by private equity firms, patient death rates in the emergency departments rose by 13% compared with similar hospitals." The research analyzed 7 million emergency department visits over a ten-year period at 49 private equity-owned hospitals and 293 hospitals that had not been acquired by private equity. The article reports that "After hospitals were acquired by private equity, the number of full-time employees fell by an average 11.6% compared with non-private equity facilities, the research found, and salary expenditures in the emergency departments and intensive care units declined by 18% and 16%, respectively."

One co-author commented that "Most hospital care in the country remains a face-to-face, human, labor-intensive endeavor, especially in emergency departments and ICUs, ... When human labor is cut to this extent in staffing sensitive areas of the hospital, patient harm can plausibly ensue, including mortality." It seems plausible that someone will be able to figure out a more efficient staffing model at some point, but in the meantime, the hospitals that cut expenses and experience worse patient outcomes should not be rewarded. At the very least, publishing quality metrics might allow some patients to make more informed choices.

The medical community has highlighted the potentially devastating effects that the funding cuts to Medicaid and insurance subsidies mandated by the most recent federal budget are expected to have. KFF Health News published an article highlighting the anticipated impact on a specific community in Texas. Already, the health care system in Starr County seems stretched thin: it "has one of the highest uninsured rates in the nation" and "a third of the population falls below the poverty line." Additionally, primary care doctors in the county serve nearly three times the number of patients as the U.S. average. Since so many people lack insurance, they frequently delay seeking medical care until their conditions are more acute, and are therefore more expensive to treat. The number of uninsured is expected to rise, given the anticipated dramatic rise in out-of-pocket premiums. In conjunction with the funding cuts to Medicaid, it seems that the local health care system will be asked to do more with less.

Supporters of the new budget seem less concerned, citing "a temporary $50 billion fund to support rural doctors and hospitals, that's a little over a third of estimated Medicaid funding losses in rural areas" and a general belief that the new budget "won't cause 'the sky to fall.'" These dramatic changes, however, seem at the very least disruptive, and it is difficult to imagine how a temporary fund will be enough to offset funding cuts in the affected area that are nearly three times the temporary fund.