Experts caution that a new provision in the Trump administration’s bill ties federal funding to broader AI adoption in healthcare, particularly in rural hospitals. A $50 billion Rural Health Transformation Fund would promote technologies such as remote monitoring, robotics and AI, but falls far short of offsetting a projected $911 billion Medicaid cut over a decade. Specialists say AI could ease clinician administrative burdens and help staffing shortages, yet warn about regulatory gaps, cybersecurity risks and the danger of under-resourced hospitals adopting AI without adequate training and safeguards.
Experts Urge Caution As Trump Bill Links $50B Rural Health Fund To AI Adoption — Benefits And Risks For Underserved Hospitals
The Pemiscot memorial hospital in Missouri.Photograph: Brad Vest/The Guardian
States seeking certain federal funds under the Trump administration’s so-called “big, beautiful” bill must meet three of 10 eligibility criteria — one of which explicitly encourages greater integration of artificial intelligence (AI) and other advanced technologies into healthcare settings. Experts say this stipulation could deliver meaningful benefits for under-resourced rural hospitals, but also carries significant risks if implementation, regulation and training are inadequate.
What The Fund Would Do
The legislation creates a Rural Health Transformation Fund that would allocate $50 billion over five years to states that satisfy specified application requirements. Eligible activities listed in the bill include “consumer-facing, technology-driven solutions for the prevention and management of chronic diseases,” and “training and technical assistance for the development and adoption of technology-enabled solutions that improve care delivery in rural hospitals, including remote monitoring, robotics, artificial intelligence, and other advanced technologies.”
How Big The Gap Is
Analysts caution that the $50 billion fund would not offset much larger changes elsewhere in the bill: the Congressional Budget Office projects a $911 billion reduction in Medicaid spending over the next decade under the measure. Those cuts could reduce coverage for patients and shrink reimbursements that many rural hospitals rely on.
Potential Benefits
Chenhao Tan, associate professor of data science at the University of Chicago, and Karni Chagal-Feferkorn, an assistant professor at the University of South Florida’s College of AI and Cybersecurity, say AI tools could help under-resourced hospitals in several ways. AI could reduce administrative burden—physicians often spend eight hours or more per week composing and entering patient notes, according to the American Medical Association—and streamline routine workflows, enabling clinicians to spend more time on direct patient care.
A recent study found that AI-generated patient notes are roughly comparable in quality to those produced by generalist physicians, though they still lag behind notes created by specialists or expert clinicians. Experts emphasize that those comparisons depend on the existing standard of care: in settings where clinicians are overworked, AI may produce a net improvement.
“If the baseline is tired human doctors, then I think it is even easier to make an argument that AI may do better than them,” Chenhao Tan said.
Chagal-Feferkorn also suggested that modern technology could make rural practices more attractive to clinicians: “If the equipment is state-of-the-art, and they feel that much of the burdensome work is done by AI, I think this could be one incentive for physicians to go work in rural areas.”
Regulation, Privacy And Security Concerns
Regulatory oversight is uneven. The Food and Drug Administration (FDA) typically regulates AI products intended to diagnose or evaluate conditions because they are classified as medical devices. But tools that primarily transcribe or compile notes are not generally regulated as devices, even if vendors advertise HIPAA compliance.
Experts warn that expecting new AI tools to be flawless before market entry is unrealistic, but they say there should be meaningful regulatory standards and validation rather than none at all. “There should be something higher than nothing,” Tan said.
Rapid AI adoption also raises cybersecurity and privacy risks. “AI makes it easier for ordinary people to hack systems,” Chagal-Feferkorn warned, noting that while AI can improve patient safety by consolidating records and flagging medication interactions, wider data sharing increases the risk of breaches and misuse.
Workforce And Implementation Risks
Both experts emphasized that AI rollout should be accompanied by investment in staff training, technical support and safety infrastructure. Without such investments, under-resourced hospitals may deploy AI primarily as a cost-cutting measure, which could amplify patient safety and equity risks.
To maximize benefit and limit harm, stakeholders should pair funding for technology with clear regulatory standards, cybersecurity safeguards, and workforce upskilling so rural hospitals can adopt AI responsibly and sustainably.
