Open to individuals, teams and both for-profit and nonprofit organizations, two new U.S. Department of Health and Human Services competitions aim to speed up the work of HHS’ Agency for Healthcare Research and Quality and lower healthcare costs for patients nationwide.
Following more than a year of operational disruptions, and a shift away from issuing academic grant awards with millions of dollars in grants canceled and this year’s appropriated funding largely unspent, the AHRQ appears to be moving toward a high-stakes prize framework.
Under the AHRQ Healthcare Choice and Competition Challenge launching this month, the federal government will make up to $3 million available to first-round winners, and then up to another $8.8 million to those who win Phase 2, the agency said on Tuesday.
The competition will award up to $11.8 million to lower healthcare costs, improve quality, and expand choice and access for patients, said AHRQ.
The goal of this healthcare market reform funding is to nurture regulatory, financial, organizational and delivery mechanisms that lower patient costs and increase competition among healthcare providers, according to Dr Roger Klein, the agency’s director.
Driving the initiative are patient costs, the agency said.
Two years ago, the U.S. Centers for Medicare & Medicaid Services said out-of-pocket healthcare expenses had cost U.S. patients $556.6 billion, AHRQ said.
Phase 1 applications are due Oct. 26.
The separate AHRQ Super Intelligence for Healthcare Improvement Initiative worth $7.95 million in prizes aims to equip AHRQ with what the federal government is calling super intelligence “to answer consequential questions.”
Specifically, a working AI system and operating model would be developed to enable AHRQ to better evaluate medical evidence and improve use of its existing cost, utilization and quality databases, the agency said on Wednesday.
Systematic reviews of published medical studies and related resources could help patients, physicians and other healthcare providers, healthcare systems, payers, policymakers and researchers understand what is known and where additional research would be most valuable, the agency said on its AI prize challenge website.
For example, AHRQ could theoretically answer whether a procedure or model of care would benefit patients.
“Reliable clinical evidence is critical for doctors, patients, payers and policymakers,” said Klein in a statement. “We now have technologies that will allow us to accomplish the essential core function of evidence synthesis with previously unimaginable speed, consistency and reproducibility.”
He also said the challenge, which opens with a $500,000 Phase 1 submission round on Jan. 11, 2027, aims to improve the quality of health services delivery and avoid unnecessary care.
AHRQ said the challenge is “outcome-based and technology-neutral” and participants may use any combination of models, systems, deterministic software, statistical packages, automated agents, human-in-the-loop methods and other tech in the prototypes they enter.
“The idea behind the challenge is not merely to append an [AI] tool to each currently existing manual step, but to make the underlying evidence base and the full range of derived products continuously updateable, queryable, auditable and reusable, so that all products are generated from a common evidence foundation,” AHRQ said on the challenge website.
Up to five finalists will receive $100,000 each and move on to a $2.1 million Phase 2 tech sprint, scheduled to begin May 3, 2027.
They’ll build and operate working systems that perform against common AHRQ work packages, the agency said.
AHRQ said it expects to announce one Grand Prize winner, who will receive up to $5.35 million, on Dec. 17, 2027.
In July, AHRQ, which underwent a reduction in force as part of HHS restructuring last year, sent out a series of grant cancellation notification letters.
“AHRQ is adjusting its discretionary health services research award portfolio in order to better prioritize agency resources,” the agency said in the letter.
“AHRQ’s current priorities include focusing agency resources on patient safety, preventing antibiotic resistance, telehealth, overmedication of children, use of digital health tools to improve health, long Covid, artificial intelligence, nutrition, furthering understanding of autism, promoting research focused on scientifically valid, measurable health outcomes and solution-oriented approaches in health disparities research.”
According to a statement in response from U.S. representatives led by Jamie Raskin, D-Maryland, Don Beyer, D-Virginia, and Diana DeGette D-Colorado, AHRQ canceled more than 150 grants supporting over $200 million in healthcare research related to integrating behavioral health into routine pediatric care, telehealth and other areas of care delivery.
“Given the disastrous impact of these notices, the potential procedural defects in issuing them, and our concerns surrounding AHRQ’s use of Congressionally-appropriated funds, we ask that you immediately withdraw these notices and fully fund the grantees that have waited for committed funds for over a year,” they wrote to the agency.
In addition, the agency has spent less than $15 million of its appropriated $345 million and had not issued a new grant in more than a year, according to a recent report by KFF Health News.
“The Trump Administration is committed to finding the best ways to lower healthcare costs and improve quality and access for American families,” said Klein in a statement.
