Study Finds Savings at Federally Qualified Health Centers

October 10, 2016 04:45 am Michael Laff

State and federal lawmakers who want to expand primary care access while reducing overall spending might want to look to federally qualified health centers (FQHC) as a model, recent research suggests.

Family physician Elias Hernandez, M.D., cares for a patient at the Salud Family Health Center in Fort Morgan, Colo.

A study(ajph.aphapublications.org) published online Sept. 15 by the American Journal of Public Health analyzed cost and quality of care measurements in 13 states that were selected with an emphasis on factors including geographic diversity, variation in size, and presence of a large number of health centers and health center Medicaid patients. Researchers found that patients who received the majority of their care at health centers saved an average of $2,371 in total spending compared to non-health center patients. They also reported 33 percent lower spending on specialty care, 27 percent lower inpatient costs and 25 percent fewer admissions.

Among health center patients, 49 percent rely on Medicaid to pay for their care, but Medicaid payments to health centers cover only 1.6 percent of total Medicaid spending,(nachc.org) according to the National Association of Community Health Centers.

Tillman Farley, M.D., a family physician and chief medical officer for Salud Family Health Centers in Colorado, an FQHC, said the community health center model is ideal for expanding the safety net because it focuses on health outcomes, not revenue.

Story Highlights
  • A new study found that patients who received the majority of their care at community health centers saved an average of $2,371 in total spending compared to non-health center patients.
  • A family physician at a network of community health centers in Colorado said the model is ideal for expanding the safety net because it focuses on health outcomes.
  • He said community health centers have long collected data on quality.

"Our providers don't get paid more for coding a higher level service," Farley said. "They are on salary. We should practice medicine without thinking about how much to bill… It's about getting the right care to the right patient in the right place at the right time."

Farley noted that health centers have long collected data on quality.

"They have always had patient registries, maintained data and known what goes on with patients," he said. "The private sector has not been required to do that. Health centers are ahead of game because we already know such things as how many diabetic patients we have, and how many are under control."

Salud operates under several payment models, including commercial fee for service, a flat Medicaid payment, a sliding scale for uninsured patients and a monthly membership fee for select Medicaid programs. Farley acknowledged that the program's reimbursement is too low for many physicians in private practice to accept a high volume of Medicaid patients.

"There's no doubt our Medicaid reimbursement is better than it is for a private practice," he said. "On the flip side we see patients with no insurance because we are legally mandated to do so. We lose money on most non-Medicaid visits whereas in the private sector they generally don't. I think the solution is that if you demonstrate savings with Medicaid patients, then you should reinvest those savings back into providers who care for Medicaid patients."

Recognizing that social determinants such as adequate food, housing and living conditions influence an individual's health, Salud provides legal services, income assistance and housing consultation. The network is planning a collaboration that will allow food banks to distribute at the health centers.

"Those additional services are quite rare in the private sector," Farley said.

Salud records about 295,000 patient visits annually at its 12 family practice clinics and four walk-in clinics. About 70 percent of the network's patients are of Latino descent.

A mobile unit visits underserved areas including low income neighborhoods and migrant farming communities where residents often do not have a physician. Before a mobile unit visits a community Salud sends out an advance team that knocks on doors to determine the level of need.

Salud also maintains a network of contacts with farmers and the agriculture sector at large to reach uninsured patients who might need medical care.

Related AAFP News Coverage
Community Health Centers Play Major Role in Protecting Safety Net
(3/23/2016)