Terry Hill, Senior Advisor of Rural Health Leadership and Policy
7/29/2026
More than 40 years ago, I was tasked with bringing together hospitals and clinics across northeastern Minnesota to form one of the nation’s first rural health networks. Back then, there was no roadmap to follow and few success stories to look up to. I met with health care leaders throughout the region to learn about their success, challenges, and dreams for the future. While many of those conversations faded over time, one meeting with leaders of Itasca County Medical Association stood out; not because it offered easy answers, but because it became the foundation of a much larger conversation that continues to influence how I view rural health today.
The older physician who introduced me, commented that I was “the Don Quixote of rural health,” someone who is looking to overcome historic medical rivalries and longstanding competition to bring rural providers together. While I’m no Don Quixote, that uniting work focused on building healthier rural communities using value-based care models became a lasting part of my career. The Northeastern Minnesota rural health network evolved into the National Rural Health Resource Center and, today, it is the leading rural health technical assistance center in the country.
Like hundreds of other rural health advocates who share a commitment to protecting the health of rural people, I have spent my career working toward a common goal: helping rural communities cultivate healthier futures. For decades, the pay for procedure payment model provided a straightforward financial transaction for providers and patients. Though direct, it also produced some of the worst quality and cost outcomes of any developed country in the world. According to the World Health Organization and the Commonwealth Fund, the U.S. “spends the most on healthcare of any nation but ranks last or near last in overall health.” According to health analysts, the primary reason for these results is that sick patients generate revenue in the U.S. system, with the sickest patients generating the most. Health care providers in this country work tirelessly to serve patients, but they too are mired in the morass of a dysfunctional payment system. This is where the value-based payment model differs. They encouraged providers to take a new, more holistic approach to the patient experience. I’ve come to see how it is one of the most effective strategies that help rural communities thrive.
Rural providers already demonstrate that the successful transition to value-based payment models are achievable with Accountable Care Organizations having improved quality. They also achieved more shared savings than their urban counterparts and initiated countless clinically integrated health networks. Through the value-based care model, providers are encouraged to take a patient-centered approach – one that implements a variety of preventative services including chronic disease management, care coordination plans, and standardized clinical practices. It is no secret that organizations can thrive under the value-based care models when offered adequate support. What do all these value models have in common? A shift away from the traditional pay-for-procedure formula which rewards health care organizations for patient volume, and toward a pay-for-value model that rewards providers for improving health outcomes, preventing unnecessary hospitalizations, and keeping people healthier.
Despite the system’s many pros, the transition is by no means simple. Rural hospitals and clinics often face financial uncertainty, gaps in workflow and care management, limited access to technological upgrades, and the challenge of shifting organizational culture. They will also encounter a substantial shift in payment adjustments, as budgets will be tied to quality and cost performance. If the hospital does not meet CMS targets, there is the potential for withholdings, leading to revenue reductions. On the other hand, hospitals can also earn bonuses, shared savings, and receive reimbursement for performing optimally. Successfully implementing value-based care will require organizations to ensure clear communication and effective strategic planning across providers, departments, and systems. Training staff to understand the implications of value-based care, relying on data-driven decision making, and refining processes as needed throughout the implementation process is key to success.
The long quest to improve the health of rural Americans has created a legion of rural health champions, who have worked collaboratively for decades. Like Quixote, they have exhibited courage, resilience, and devotion to creating healthier communities across the United States. They have made great strides in addressing rural health challenges, but there is still far to go. Value-based care is the key to continuing that momentum. The transition will surely have bumps in the road, but we must stay focused on what they represent: a need to reshape the complex nature of healthcare to be more equitable, flexible, and dependable. Meaningful change rarely happens because the path is easy. Let us look forward with the needs of patients in mind as we strive to reshape health care delivery and strengthen the foundation of trust it depends on.
