News Release

Federally Qualified Health Centers Poised for Significant Role in Reform

Centers Evolve as Key Providers of Efficient, High-Quality Primary Care for Low-Income People

News Release
Nov. 10, 2011

FURTHER INFORMATION, CONTACT:
Alwyn Cassil (202) 264-3484 or acassil@hschange.org

WASHINGTON , DC—Tracing their roots to the civil rights movement and the 1960s’ War on Poverty, federally qualified health centers (FQHCs) have grown from fringe providers to mainstays of many local health care system safety nets, according to a study released today by the Center for Studying Health System Change (HSC).

With health reform expected to extend coverage to 32 million Americans by 2019, primarily through Medicaid expansions and access to subsidized private insurance, FQHCs in many communities are poised to play key roles by serving newly covered people, contributing to primary care workforce development, and taking part in new models of health care delivery and payment, according to the study.

The scope and reach of FQHCs has grown significantly in the last 15 years, but FQHC development varies considerably across communities because of several important factors, including local health system characteristics and financial and political support at federal, state and local levels, according to the study.

“Two key factors appear to affect development of FQHCs at the community level—the demand for safety net services and the level of state and local assistance,” said Laurie E. Felland, M.S., HSC director of qualitative research, and coauthor of the study with HSC Consulting Researcher Aaron B. Katz, C.P.H., of the University of Washington; HSC Consulting Researcher Ian Hill, M.P.A., M.S.W., of the Urban Institute; and Lucy B. Stark, an HSC research assistant.

The study’s findings are detailed in a new HSC Research Brief—A Long and Winding Road: Federally Qualified Health Centers, Community Variation and Prospects Under Reform—available online at www.hschange.org/CONTENT/1257/. The study, funded by the Robert Wood Johnson Foundation and the National Institute for Health Care Reform, is based on HSC’s 2010 site visits to 12 nationally representative metropolitan communities: Boston; Cleveland; Greenville, S.C.; Indianapolis; Lansing, Mich.; Little Rock, Ark.; Miami; northern New Jersey; Orange County, Calif.; Phoenix; Seattle; and Syracuse, N.Y. HSC has been tracking change in these markets since 1996.

FQHCs mainly serve low-income patients—those with incomes under 200 percent of federal poverty, or $44,700 for a family of four in 2011—who are uninsured or covered by Medicaid and other public programs. Taking into account the size of their uninsured and Medicaid populations, some communities now have extensive FQHC capacity—for example, Boston, Seattle, Syracuse and Miami—while others have lagged, including Phoenix, Little Rock, Cleveland and Orange County.

Other key findings include:

Key to FQHCs gaining and maintaining federal and other support has been demonstrating effective use of resources. Many FQHCs began as grassroots, shoestring operations, often managed by community activists or clinicians. Over time, many FQHC directors have become sophisticated leaders and managers, and many FQHCs have built reputations as high-quality, efficient providers.
FQHC leaders have focused on related strategies to strengthen their centers’ financial status and sustainability. In many cases, they increased the proportion of insured patients, adapted to Medicaid managed care, collected payments due from payers and patients, and increased operational efficiencies. Still, FQHC leaders faced significant challenges, including operating costs that rose faster than revenues, difficulties meeting demand and arranging for all services their patients need—particularly specialty care—and complex and changing payer requirements.

As more people gain coverage under federal health reform, establishing sufficient primary care capacity to meet the additional demand will be a challenge. The significant variation in federal support for FQHCs across communities, as well as state and local factors that affect both FQHC and broader safety net capacity, likely will affect communities’ ability to meet increased demand for primary care services.

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The Center for Studying Health System Change is a nonpartisan policy research organization committed to providing objective and timely research on the nation’s changing health system to help inform policy makers and contribute to better health care policy. HSC, based in Washington, D.C., is affiliated with Mathematica Policy Research.