When Budget Cuts Meet the Exam Room: Can Providers Protect Access Without Sacrificing Care?

A new report from S&P Global Ratings reveals a painful truth: even insured patients are finding it harder to access affordable care. As costs rise and proposed Medicaid cuts loom, providers across the country are being forced into difficult decisions.

Should they preserve financial health—or preserve patient access? In many cases, they may not be able to do both.

For rural and community hospitals, the stakes are especially high. These facilities often serve as the only point of care for entire regions handling everything from emergencies to maternity to mental health. When one closes, an entire community loses access.

The Crisis in Numbers

• U.S. per capita healthcare spending reached $13,942 in 2023 - 40% more than the next highest country.
• Out-of-pocket costs for individuals now average $6,159/year.
• Over 50% of rural hospitals are operating at a deficit.
• Since 2005, nearly 200 rural hospitals have closed and over 700 more are at risk, according to experts.
• In states that didn’t expand Medicaid, rural hospital closures have spiked, while expansion states have seen fewer shutdowns.

Insight: For many rural providers, financial sustainability is measured not in profit margins but in whether they can survive one more year without major funding losses.

Why Rural Closures Hit Harder

Community hospitals, especially in rural areas, are more than just care centers. They are economic and social anchors:

• Often the largest local employer, supplying up to 10% of jobs
• Providers of maternity care, lab tests, mental health services, and emergency medicine
• The only source of care within a 20 to 60 mile radius for many patients

When they close, patients are forced to drive farther, wait longer, or simply go without care, resulting in higher mortality, worse birthing outcomes, and deeper health disparities.

The Tradeoff No One Wants to Make

To stay open, hospitals may need to:

• Reduce or eliminate key service lines
• Increase pricing for private-pay patients
• Limit service areas or shift toward more profitable specialties

While these decisions may help protect credit ratings or operational viability, they almost always reduce access, especially for the patients who already face the steepest barriers. In the words of the S&P report:

“What may be good for preserving or improving financial performance may not always align with the objective of increased access to affordable care.”

Strategic Leadership in the Face of Scarcity

This moment requires values-based leadership in order to ensure continued access for populations. Especially in rural settings, providers must ask:

• What are the essential services our community can’t afford to lose?
• How do we protect frontline care even if revenue pressures persist?
• Can AI and automation create new paths forward?

That’s where platforms like Steer Health can help. By streamlining access, automating costly and time-consuming front office services, reducing no-shows, and optimizing scheduling and clinical workflows with minimal staff lift, Steer empowers overburdened providers to keep care close—even when resources are stretched. In rural and community settings, small operational wins can translate into lives saved and communities sustained.

“The deployment of AI and Steer’s platform has been outstanding, and early results are a testament to our commitment to innovation,” notes Dr. Kavitha Bhatia, MD, MMM, FAAP, FACHE, President and Chair of the Prime Healthcare Foundation.

“We’ve seen improved volume, revenue, streamlined workflows, and expanded patient offerings to ensure timely access to care. Moving forward, we aim to partner with Steer to deliver even more precise, efficient, and compassionate care to our patients—developing sustainable strategies to meet the challenges facing healthcare nationwide.”

In rural and community settings, these operational wins are more than performance metrics, they’re lifelines. They help ensure care remains local, accessible, and human, even as financial pressures mount.

Insight: The choices made now, especially in small towns and underserved counties, will define health outcomes for years to come. The right partnerships, tools, and priorities can make the difference between scaling back, or scaling smarter.

Conclusion: The Frontline is Local

Budget cuts don’t happen in a vacuum. They hit hardest where the safety net is thinnest, where rural hospitals, community clinics, and the families who rely on them.

Healthcare systems must recognize that this is not just a question of dollars. It’s a question of distance, of delay, of whether care arrives in time or at all. Holding the line on access shouldn’t be optional. It’s the difference between surviving a stroke and waiting 45 minutes for an ambulance. Between welcoming a newborn safely or driving hours for delivery. Between a working clinic or none at all.

At Steer Health, we believe supporting rural and community providers means meeting them where they are, with tools that strengthen operations without adding complexity. That means enabling faster access, reducing staff burdens, and making sure care is never more than a few steps away no matter the ZIP code.

“Digitizing patient engagement can play a part in humanizing healthcare delivery,” explains Sridhar Yerramreddy, CEO of Steer Health. “With AI as a co-pilot, we empower healthcare staff to magnify their productivity and enable a patient experience that is personalized to each patient, their family, and their caregiver.”

If we measure healthcare by what people can actually access, then our success will be found not just in margins but in miles, minutes, and outcomes.