Healthcare transformation in Western NC

Western North Carolina has some unique healthcare challenges with only one Level One trauma center in the 18-county region, widening healthcare gaps, which the now-in-limbo Healthy Opportunities Pilots worked to address. But, a new statewide program that will be rolled out across the region soon looks to provide some of the same services for especially rural areas. 

The pilot, or HOP, provided nonmedical social services for people enrolled in Medicaid in North Carolina, and bridged care gaps through nonmedical services like access to healthy food through Food is Medicine programs and housing navigator services until last year, when the state legislature did not authorize funding for the project after July 1, 2025. 

In the next 10 years, North Carolina will lose nearly $50 billion in Medicaid funding, from national cuts to the program, which were passed as part of last year’s One Big Beautiful Bill. But the same piece of legislation set aside billions of dollars for a national Rural Health Transformation Program, which aims to improve healthcare and social services access in rural areas.

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The NC Department of Health and Human Services applied for $200 million by submitting its transformation plan to the national Centers for Medicaid and Medicare Services. In the beginning of this year, CMS announced that it would award nearly $50 billion across the country for rural health transformations over the next five years. North Carolina was ultimately awarded $213 million.

In May, DHHS selected Asheville-based nonprofit Impact Health to lead Western North Carolina’s administration of the Rural Health Transformation Program. Impact also administered HOP for the region, which is also a state implementation of a federal program. The only difference between the two programs is that the transformation program is not limited to people enrolled in Medicaid. HOP received some funds from the budget that the state legislature recently passed, though there’s no public timeline available for if or when it will come back.

Billions of dollars for rural healthcare 

Laurie Stradley, the chief executive officer of Impact Health, said the transformation program took a lot of the lessons learned from HOP and put them into practice for the transformation program, which is rolling out this year. 

While the funding that the state received is not enough to stabilize struggling hospitals or reopen new ones, Stradley said, it will hopefully close health disparities between people living in rural and urban areas in Western North Carolina. 

According to the Sheps Center for Health Research at UNC-Chapel Hill, nearly 197 rural hospitals in the nation have been closed or converted since 2005. In North Carolina, the number is 12. North Carolina has the second-highest rural population in the entire country, behind only Texas. 

About 50 percent of children in the state are born under Medicaid programming, The regional also has a number of maternity deserts. In the west, five counties have no labor and delivery units and additional counties have only limited services.

Impact’s administration of the transformation program looks to remedy some of these numbers. They want to create a more sustainable healthcare delivery system for rural areas through regional hubs that connect rural residents to care outside of just the doctor’s office. 

The program has six focus areas, including establishing community care networks through the regional hubs, growing nutritional support through programs such as Food is Medicine, expanding access to mental healthcare, retaining more health professionals, helping care providers with financial longevity and widening access for new technology in care.

“Our state’s rural communities are wonderful places to live and raise a family but face unique health care challenges.” Gov. Josh Stein said in a statement announcing the funding. “This grant will connect more people to higher-quality health care.

As part of the transformation program, Impact will become a hub for a regional program called ROOTS, which stands for Rural Organizations Orchestrating Transformation for Sustainability. These hubs aim to piece together medical services and social support across rural communities over the next five years. ROOTS hubs, like Impact, will work to address social determinants of health in the region, along with clinical care needs during the program’s roll-out this year. 

Rebecca Whitaker is a researcher with the Duke-Margolis Institute for Health Policy who focuses on state and federal health transformations. She’s currently leading a group at the institute to help implement the transformation program at the state level. She said it is easier to meet food and housing needs when individuals’ care providers encourage screening, referring and intervening in those social health issues. 

“There is a fair amount of well-documented evidence that suggests that a lot of a person’s health care status is determined by social factors, environmental factors, and things that occur outside the kind of what we think of the clinic walls,” she said. 

Transformation timeline

The transformation program is in its pilot phase, which is being rolled out in each of the Medicaid-managed care regions across the state. Impact’s region is the western part of the state, which is Region 1. Impact Health, which is based in Asheville but serves 19 western counties and the Qualla Boundary, is what’s known as a “social care hub.” 

“The way we hear our federal leadership talk about this work is that it’s not a planning grant; it’s a doing grant,” Stradley said. “We needed to get to work as quickly as possible.”

She said Impact was ready to get to work with the transformation program on day one because of the work they had done with Healthy Opportunities. 

The difference, though, is that Healthy Opportunities is a program for individuals who receive Medicaid, but the transformation program is broader. For the past five years, the organization has connected around 60 nonprofit and governmental organizations with the state Medicaid waiver program so they can be reimbursed for their services in the same way that a hospital or a doctor may invoice and be reimbursed for a clinical service. 

Stradley said the organization blends together social determinants of health and clinical care to provide something called “whole-person health” in rural communities. 

In the implementation of the program, Impact will continue to connect people in Western North Carolina with programs like Food is Medicine, which is a healthcare program that connects individuals facing food insecurity with healthy, free produce and other food. Stradley also said she wants to see the program invest in maternal and child health in the region. 

“We need to create more bridges between systems that support individuals,” she said. 

Future of the Health Opportunities Pilot

Many of the transformation program’s goals are reminiscent of the Healthy Opportunities Pilot, though a lot is still up in the air for the latter, even though it received funds from the most recent budget. A recent study from the UNC Sheps Center showed that HOP was saving Medicaid beneficiaries in the state an average of $164 per month on their healthcare costs.

Madeline Offen, a managing attorney for housing and economic community development programs at Pisgah Legal Services, said her organization provided case management and some legal services to people enrolled in Medicaid. 

Through the pilot, Pisgah Legal had six social workers who typically helped people who were housing insecure find housing. Because of the funding pause last summer, they had to lay off four social workers. Offen said a lot of organizations in Western North Carolina have felt the loss of HOP. 

“I hope that with more investment into these services for folks in our community, like looking forward, we can see some of the results that we saw through HOP,” she said. 

Because no date has been released about when HOP may resume and the new transformation program’s partner organizations have not been selected yet, a number of organizations like Pisgah Legal are waiting for a green light to provide their services as health care. Impact is currently spending time in western NC communities, and according to their website, they look to have an action plan in September. 

“This funding is new as a part of H.R. 1 from last year, but the work of rural health transformation and the recognition that it is more difficult to access services in rural spaces, that work has been going on for generations,” Stradley said. 

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