Black Jet Theory – Volume 2020-15 – What the Heck are Federally Qualified Health Centers and Why They Matter?
August 14, 2020 by Marshall Snipes
Medicaid enrollment in the United States was 73.9 million people in 2018 or 17.9% of the population[1] and 14 states had not expanded Medicaid to adults between the ages of 18 and 65. In 2019, Medicaid costs represented 16% of total healthcare costs in the United States[2]. The cost of Medicaid for 2018 was $616 billion and represented 9.5% of the federal budget and 28.9% (2017) of the state budgets.[3] In 2018, Medicaid was the source of payment for 42.3% of all United States births and in 2017 paid 30.2% of all nursing care and continuing care retirement community costs in the United States.[4] By anyone’s definition Medicaid has become a significant factor in the cost and delivery of healthcare in the United States.
Federally Qualified Health Centers (FQHCs) previously known as Community Health Centers (CHCs) were established into law in 1964 as part of the Economic Opportunity Act. The act was part of President Lyndon Johnson’s war on poverty.[5] Over the years, through a series of law changes and presidential administrations both Republican and Democrat, FQHCs have become “community-based health centers that provide comprehensive primary care and behavioral and mental health services to all patients, regardless of their ability to pay or health insurance status. FQHC’s are a critical component of the health care safety net”.[6] FQHC’s primary source of funding is the Medicaid program.
As of June 2019, there were 1,370 FQHCs and 12,409 FQHC service sites in the United States[7] serving over 28 million people,[8] far short of the 75.1 million people enrolled in Medicaid in 2019. Further, FQHC patients cost 24% less per year than non-FQHC patients[9] and save 35% per child compared to other providers.[10] The Black Jet Theory would suggest that significant savings would occur if all Medicaid patients’ primary care needs were met by FQHCs. State governments have been hesitant to apply for waivers from federal law which prohibits the government from dictating where a Medicaid recipient receives medical care.
The argument goes that we are establishing two different medical systems one for the poor and one for everyone else and thus the quality of care must be less for the poor. The costs may be less but what is the quality of care compared to other providers? In a comprehensive peer reviewed study in 2013, it was concluded that “FQHCs and look-alikes demonstrated equal or better performance than private primary care physicians on select quality measures despite serving patients with more chronic disease and socioeconomic complexity.”[11] FQHCs performed better on 6 measures, worse on 1 measure, and the same on 11 measures.[12] Another study concluded, “on a number of high-value and low-value measures of care, CHCs performed similar to or better than private practices”.[13]
What makes FQHCs different? There are many differences that make FQHCs different. Those differences that drive the results above are significant. First, FQHCs are organized culturally around the communities in which they are located, referred to as cultural competence. The relationships with their patients are built on the trust gained from community involvement and in the model that the services are provided. Governance includes a requirement that 51% of the governing board must be patients. Second, FQHCs are not paid by the Medicaid program on a fee for service basis. Payments are based on a medically necessary model that does not reward overtreating. Third, and I believe the most important difference, is the integrated delivery model employed by the FQHCs. The FQHC model looks at the patient holistically by integrating into the care of the patient, medical, dental, mental health and screening for social determinants that impact health. Treatment plans include prevention and the corresponding training includes nutrition.
According to Lou Carmichael, the CEO of Variety Care in Oklahoma, the community health center model “was built to remedy known disparities for low income communities; it has evolved with practical, creative, cost effective solutions. Doing better with less is in the DNA of Community Health Centers”.
Why don’t we mandate FQHCs for all Medicaid patients? The Black Jet Theory answer would seem to be – it’s politics stupid or maybe we should say it’s stupid politics. Neither side of the aisle would like this proposal. The right leaning opinion would say it’s a government takeover of the Medicaid system. The left would believe that discrimination would occur, and choice would be limited. Both of those arguments miss the point. Why would we not want a system that lowers cost and improves outcomes? The government already has taken over the system. Provider rates for Medicaid patients are lower than for Medicare and private insurance and are dictated by state government. Benefit schedules and eligibility are established by the federal government.
The left leaning opinion would say by dictating where you receive treatment, you are limiting choice. But don’t we already have limitations on choice even in the private sector? Employer based plans in the private market choose the network. Out of network services are priced at a higher rate to the employee. Many providers don’t take Medicare or Medicaid patients, further limiting choice. Requiring services to be provided at a FQHC doesn’t limit you to a specific FQHC. And finally, if you made the option to have treatment from a FQHC voluntary, haven’t you eliminated the argument?
The Black Jet Theory would seem to dictate that whether directly requiring or indirectly nudging Medicaid recipients in the direction of FQHCs would result in less expense and better outcomes.
Don’t take my word for it, think for yourself.
If you would like to subscribe to Black Jet Theory, please email your request to [email protected]. It’s free.
[1] Statista. Total Medicaid enrollment from 1966 to 2019. https://www.statista.com/statistics/245347/total-medicaid-enrollment-since-1966/.
[2] Ibid
[3] Centers for Medicare & Medicaid Services (CMS) website. Medicaid Facts and Figures January 30, 2020. Retrieved August 5, 2020. https://www.cms.gov/newsroom/fact-sheets/medicaid-facts-and-figures.
[4] Ibid.
[5] Visualizations. The History of Federally Qualified Health Centers. Retrieved August 5, 2020. https://www.visualutions.com/blog/the-history-of-federally-qualified-health-centers-(fqhc’s)/
[6] Doty M, Abrams M, Hernandez S, K Stremikis, A Beal. May 27,2010. “Enhancing the Capacity of Community Health Centers to Achieve High Performance”. The Commonwealth Fund.
[7] Definitive Healthcare. How Many Federally Qualified Health Centers Are There? Retrieved August 5, 2020. https://blog.definitivehc.com/how-many-fqhcs-are-there
[8] National Association of Community Health Centers. Community Health Center Chartbook. January 2019. Retrieved August 5, 2020.http://www.nachc.org/wp-content/uploads/2019/01/Community-Health-Center-Chartbook-FINAL-1.28.19.pdf
[9] National Association of Community Health Centers. Community Health Center Chartbook. June 2018. Retrieved August 5, 2020. Chart 4.2. http://www.nachc.org/wp-content/uploads/2018/06/Chartbook_FINAL_6.20.18.pdf
[10] National Association of Community Health Centers. Community Health Center Chartbook. June 2018. Retrieved August 5, 2020. Chart 4.3. http://www.nachc.org/wp-content/uploads/2018/06/Chartbook_FINAL_6.20.18.pdf
[11] Goldman L, Chu P, Tran H, and Stafford R. U.S. National Library of Medicine National Institute of Health. Community Health Centers and Private Practice Performance on Ambulatory Care Measures. Retrieved August 6, 2020. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3595189/
[12] Ibid
[13] Oronce C, Foruna R. Differences in Rates of High-Value and Low-Value Care Between Community Health Centers and Private Practices. Journal of General Internal Medicine. November 2019. Retrieved August 6, 2020. https://link.springer.com/article/10.1007/s11606-019-05544-z