Opportunities and Challenges of Using Carve-Outs to Fund Rural Public Health Initiatives: Evidence From the COVID-19 Pandemic

The COVID-19 pandemic has highlighted troubling disparities in health care access and outcomes for vulnerable populations.^1-3 In particular, research has pointed to significantly worse outcomes related to COVID-19 in rural communities than in urban communities.^4-6 Despite being less densely populated than urban areas, in which COVID-19 would be expected to propagate widely, rural areas have a higher incidence of COVID-19 relative to population size.^7-9 The high incidence of COVID-19 cases in rural areas has resulted in high levels of morbidity and mortality in many rural communities.^4-6 Notably, since fall 2020, rural mortality rates from COVID-19 have consistently surpassed urban mortality rates.^6,10,11 The higher mortality may be attributable at least in part to US residents in rural areas being less likely than those in urban areas to adopt COVID-19 preventive health measures, such as wearing face masks, and less willing to vaccinate against COVID-19.^4,12 In the United States, residents of rural areas are also more likely than residents of urban areas to be older and have chronic conditions, which combine to increase the mortality risk from COVID-19.^13,14 At the population level, rural communities are disadvantaged by limited access to medical care, with residents of rural areas being more likely than residents of urban communities to face health care provider shortages and hospital closures. ¹⁵ Combined, these barriers and circumstances have left rural communities particularly vulnerable to the COVID-19 pandemic; therefore, interventions and funding geared toward protecting rural communities are needed.

Despite considerable need, rural communities are often overlooked for federal public health funding. In most circumstances, federal funds for health education, health care access, and health outcomes and research are directed toward urban population centers. ¹⁶ This choice is often a rational one, ensuring that funds are used in a way that does the most good for the most people. Critically, however, it can leave population minority groups, such as rural communities, without the necessary funding to improve the health of their communities.

To confront this problem, calls have recently increased among rural public health advocates for federal agencies to “include a designated percentage, or ‘carve out’ for rural residents in funding opportunities” to ensure an “equitable distribution of resources to impact the over 57 million Americans living in rural areas.” ¹⁶ Public health advocates argue that the use of carve-outs could help to ensure that rural communities are not left behind in federal funding initiatives typically aimed at urban population centers and could help to reduce the growing divide in health outcomes between urban and rural communities. Importantly, however, in advance of the COVID-19 pandemic, rural carve-outs were a largely theoretical mechanism to reduce health care disparities, with few examples of rural carve-out implementation.

With the COVID-19 pandemic, disparities in public health access have been highlighted in rural communities, spurring policy makers into action and in search of creative solutions. Specifically, it led to the development of CDC-RFA-OT21-2103, a $2.25-billion Centers for Disease Control and Prevention (CDC) initiative designed to address health disparities among “high-risk and underserved” populations, including racial and ethnic minority populations and rural communities, during 2021-2023.^17,18 This initiative was, to the best of our knowledge, the first large federal funding mechanism to include a rural carve-out, with $427 million allocated to rural communities. The funding mechanism was designed to reduce COVID-19 disparities by improving testing and contact tracing, public health department capacity, and services to control the COVID-19 pandemic. Although this grant program was not the first to provide funding to rural communities, it was unique in carving out funds for rural communities by noting that “approximately 19% of total available funding will be awarded to states with rural populations,” that “all state recipients will receive a portion of the rural funding available,” and that “each recipient’s share will be based on the size of the rural population within the recipient’s jurisdiction.” ¹⁸

As the first large-scale rural carve-out, this CDC funding initiative presents a useful test case. For the first time, this grant program will allow us to move beyond the theoretical to evaluate the effects of an actual carve-out on health in rural America. Finding evidence of improved health outcomes in rural communities or reduced disparities between urban and rural areas would be a strong signal for the potential power of carve-outs to improve health in rural communities. Evidence of a limited change in the health outcomes of rural communities could encourage rural public health advocates to identify alternative models for reducing health disparities between urban and rural communities.

Given the potential importance of this initiative to the future of rural public health funding, our research team, under the directive of the Federal Office of Rural Health Policy (FORHP), spent 2022 investigating the implementation of CDC’s rural COVID-19 carve-out. We conducted interviews with key leaders involved in the development and implementation of the carve-out initiative. Specifically, we interviewed 5 individuals at CDC who developed the carve-out, 3 leaders in FORHP who provided support to CDC in the creation of the Notice of Funding Opportunity, 1 individual from the National Organization of State Offices of Rural Health (NOSORH) who lent support and technical assistance to states, and 18 state leaders representing 13 State Offices of Rural Health (SORHs) across the United States that were funded by and implemented the carve-out grant program.

Our analysis, which is described in more detail elsewhere, ¹⁹ is based on the results of these 27 interviews. We relied on interviews with these individuals because they have been responsible for the grant program’s development or implementation and because they have been the most likely to experience the benefits and challenges of the carve-out program thus far. We conducted each interview for roughly 60 minutes using Zoom. We relied on snowball sampling to identify potential participants within and across the institutions involved in the rural carve-out.^20-22 Interviews included questions about the role of each actor in the carve-out, how funds were being used, challenges faced with the carve-out, the impact of the carve-out so far, and lessons learned. After transcription, 2 independent coders (G.F. and E.G.) analyzed the interviews using NVivo Pro (QSR International). The coders relied on an inductive thematic analysis that allowed the information that emerged from interviews to guide theme development, including identifying the challenges and opportunities at the center of this commentary.^23-25 The institutional review board at Texas A&M University approved this study.

Based on the findings from our interviews, ¹⁹ we believe that rural carve-outs present several opportunities for the future of rural health funding but also carry with them several challenges that will need to be overcome.

Carve-Out Opportunities

From our interviews, conceptually, rural carve-outs appear to have near-universal support as a potential rural funding mechanism among participants from CDC, FORHP, NOSORH, and SORHs involved in the CDC carve-out initiative. Among interviews with individuals at CDC, FORHP, NOSORH, and within SORHs, we did not interview a single participant who questioned carve-outs as a viable funding strategy for rural US communities, and all thought that future carve-outs would be a boon for rural health. Participants indicated 3 clear opportunities provided by rural carve-outs.

Carve-Outs Provide a Seat at the Table

In interviews that we conducted, a substantial share of participants noted that one of the most important opportunities provided by rural carve-outs is a seat at the table for rural health leaders in state-level discussions about public health funding and investment. With CDC specifically listing SORHs in its notice of funding opportunity, many state public health departments were encouraged to include rural public health leaders in decisions in which they were often previously excluded. This “seat at the table,” as many participants called it, ensured that individuals with a deep understanding of rural public health were included in state planning. By bringing rural expertise and leadership into key strategic planning meetings to discuss the use of grant funding, the state plans reflected the actual needs of residents in rural communities and allowed the building of ties between state offices of health and the state’s rural health experts.

Carve-Outs Facilitate the Creation of New Rural-Centric Programs

Participants also noted that the creation of rural carve-outs presented an opportunity to create new public health programs that would otherwise not exist. By dedicating funds to rural communities within a funding mechanism, states are required to prioritize the use of these funds in rural communities, in many cases creating new public health programs for rural residents. Leaders in SORHs provided examples of funds from the carve-out being used to create programs that conduct diversity training among rural health care providers, improve COVID-19 vaccine messaging, develop transportation pilot programs for residents in rural communities with a high need for transport, and create paramedicine programs in remote regions. Interviewed experts noted that, in each instance, the public health program was developed only because the carve-out forced grant funds, which would typically go toward urban communities, to be used in rural communities, demonstrating that carve-outs could present an opportunity for the development of creative public health programs geared toward underrepresented groups.

Carve-Outs Increase Engagement With Community-Based Organizations

Rural leaders in several states noted that the rural carve-out resulted in increased engagement between state rural leaders and community-based organizations (CBOs). With dedicated rural funds available, rural leaders in many states initiated engagement with existing and new community partners to support various initiatives. For example, in Montana, the SORH explored opportunities to support Native American tribes and build partnerships between tribes and surrounding communities that might be interested in supporting and building relationships with nearby reservations. In North Carolina, the SORH investigated the creation of opportunities for people to be engaged within CBOs, as a way for residents to serve their community. These examples show that the opportunity for rural-specific funds appears to be a powerful inducement for many CBOs to engage with state leaders and with one another. Through increased engagements initiated by carve-out grant funds, stronger networks are forming among rural communities, rural CBOs, and state-level public health agencies. This growing interconnectedness resulting from the carve-out could have benefits beyond the 2-year period of the grant and could serve to benefit rural communities and related organizations in the long term.

Carve-Out Challenges

Despite the opportunities that rural carve-outs present, study participants at all levels noted that the rural COVID-19 carve-out has presented several challenges that SORHs have been forced to confront.

Community Capacity to Manage New Funds

While rural communities were grateful for the influx of funds that the rural COVID-19 carve-out provided, leaders in many states noted that some rural communities were struggling with managing the new funds. In the context of the COVID-19 pandemic, communities were not presented with just 1 new funding stream. Instead, an array of new funding mechanisms was created; in some cases, community leaders felt that they were “drinking from a fire hose” in managing multiple funding streams. Despite the excitement among SORHs about what they could do with carve-out funds, some offices lacked the staffing to get the funds to communities promptly and to meet federal reporting deadlines while managing other funds. Multiple participants noted that future rural carve-outs would benefit from smaller amounts of long-term funding instead of large amounts of short-term funding, helping rural communities with limited capacity do the best possible despite their limited human capital and other resources.

Building Program Sustainability

Another major challenge identified by participants related to concerns about the sustainability of new programs established as a result of carve-out funds. Although some participants were excited about new public health programs that were being established by carve-out funds, concerns persisted about the short-term nature of the carve-out funding, which was designed to last only for 2 years. Leaders in rural communities were concerned about creating new public health programs that residents would rely on, only to be taken away once funding support ended. Similarly, leaders were concerned about potentially hiring and training a new public health workforce in the rural communities, only to have to lay off the workers once funding support ended. Participants in many states mentioned being focused on identifying other funding streams to maintain programs and staffing, but they also noted that future carve-outs that included sustainability mechanisms for successful programs would be beneficial.

Rushed Development and Implementation

The final major challenge that rural leaders pointed to was tied to the development of the rural carve-out and concern about its rushed development and implementation. Some of the interviewed CDC participants involved in creating the funding opportunity noted that they felt rushed in developing the notice of funding opportunity. Although the fast pace of the grant program’s development was necessary to get money into the hands of states as quickly as possible to combat the COVID-19 pandemic, multiple CDC participants stated that they wished that they had more time to consider the program details and to hold more conversations with relevant actors. Leaders in SORHs had similar concerns. Navigating state bureaucracies to implement public policy programs is a months-long process in many states, and SORH leaders in multiple states noted growing stress that, almost 1 year into the 2-year grant initiative, they were only just beginning to get money to rural communities. Although this challenge might be partially attributed to the unique nature of the COVID-19 pandemic and the need to operate quickly, conversations with participants suggested that more deliberate grant program development and building in time to navigate state bureaucracies would be helpful for future carve-outs.

Public Health Implications

During the past several years, rural public health advocates have been calling on funders to consider designating a certain percentage of allocated grant funds to rural communities in the form of a carve-out. With the first large-scale rural carve-out now underway, we have real evidence, based on our interviews, to gauge the implementation of this new funding strategy. Although a complete evaluation of the effects of the carve-out funding program on rural communities can be obtained only at the end of the program, this commentary demonstrates that the carve-out funding program has had positive effects. The carve-out appears to have provided many rural leaders a seat at the table that they otherwise may not have had, and it has created innovative public health programs that otherwise may not have existed. As long as challenges tied to capacity, sustainability, and timing can be resolved, rural carve-outs could be a viable path forward for rural funding. Policy leaders may want to consider the possibility of extending the use of carve-outs to providing funds for other medically underserved groups.