North Carolina lawmakers have passed a nearly $30 billion spending plan for the next two years that includes a significant investment in rural healthcare. The plan designates more than $400 million to initiatives aimed at improving healthcare access in the state’s 80 rural counties. It also includes funds to strengthen rural telehealth infrastructure. Some of this funding is derived from a one-time payout of approximately $1.6 billion in federal funds linked to the state’s adoption of Medicaid expansion. The budget supports struggling rural hospitals, offering them the option to convert into “rural emergency hospitals” to access more funding from Medicare and Medicaid. These hospitals must discharge or transfer patients within 24 hours, encouraging a focus on outpatient services.
Additionally, the budget allocates $12.5 million in “stabilization” funds to provide loans to financially troubled rural hospitals. To attract and retain healthcare workers in rural areas, the budget provides $50 million to repay educational loans for mental health professionals and $15 million to establish a residency program focused on rural communities. The NC Care initiative is a $420 million collaboration between UNC Health and East Carolina University to establish regional systems of care in rural areas. Half of the funding will be used to establish three rural health clinics. This collaboration sets an example for other states looking to innovate rural healthcare delivery, says Mark Holmes, director of the Cecil G. Sheps Center for Health Services Research. Duke University Law School’s Barak Richman, however, is concerned that the initiative may result in higher costs for rural healthcare.