Background and Challenge

Community health centers (CHCs) operate as essential providers in America’s underserved communities.  These organizations, which include Federally Qualified Health Centers (FQHCs) and Look-Alikes, serve over 30 million people in approximately 15,000 locations nationwide.[1]  The care provided at CHCs ensures that some of our most vulnerable citizens do not fall through the cracks: 1 in 3 people experiencing poverty, 1 in 4 individuals from racial and ethnic minorities, and 1 in 5 uninsured persons receive their care from these organizations. 

The healthcare services at CHCs and FQHCs encompass the types of outpatient primary care that can bend the cost curve: screening for cancer and infectious diseases, delivering immunizations, managing chronic conditions, and providing access to mental health treatment.  Accordingly, a wide range of statistics demonstrate the high-value nature of this care: (1) Medicaid spending is 24% lower per patient at these centers, (2) Medicare spending is at least 10% lower at FQHCs relative to physician offices and outpatient clinics, and (3) marketplaces with a high degree of CHC concentration report lower healthcare spending per beneficiary.[2]

Despite the essential and valuable nature of the services provided at FQHCs and other CHCs, their financial viability is severely challenged: the median operating margin for CHCs is 3.5%, with 11 million patients served by centers that have negative operating margins.  This shaky financial performance is further threatened by spikes in inflation (especially within the healthcare workforce), changes to Medicaid enrollment policies, and uncertainty regarding qualification for 340B discounts from pharmaceutical companies.[3]

Emerging Solutions

As reimbursement for primary care shifts to reward value, CHCs are well-suited to capitalize by developing and implementing strategies that achieve the Quintuple Aim in healthcare.  The five pillars of the Quintuple Aim include: (1) enhancing the patient experience, (2) improving population health, (3) reducing costs, (4) addressing provider burnout, and (5) advancing health equity.[4]  Beyond the financial reward in pursuing these goals, the Quintuple Aim is well aligned with community-based mission of CHCs.  A brief summary of these 5 ‘pillars’ of the Quintuple Aim are described below:

1. Improving the citizen/patient experience of care focuses on rigorously collecting input widely and effectively to ensure that care is patient-centered, compassionate, and provides an excellent experience for patients.  This involves understanding patient needs, coordinating care around those needs, and easing patient stress and burden during the care process.

2. Improving the health of populations through well-designed data capture and analytics enhances overall community health outcomes by creating a data-driven basis for preventing illness and helping at-risk populations better manage chronic conditions.  The goal is to create up-to-data dashboards to help keep communities healthy and care proactive rather than reactive.

3. Reducing the per capita cost of healthcare means finding ways to deliver high quality care to individuals more cost-effectively.  This involves increasing access to affordable services, reducing waste, and helping patients engage in behaviors that reduce future health spending.

4. Addressing provider burnout involves using data, care delivery models, and compensation to structure workload and improve overall staff experience.  Staff satisfaction is linked to better patient outcomes and retention, so this element focuses on reasonable work effort standards, sense of purpose and belonging, work-life balance, and overall well-being for staff.

5. Enhancing equity focuses on providing care that is just, inclusive and addresses disparities across all groups.  It means ensuring all populations and communities, regardless of race, ethnicity, gender, geography or socioeconomic status, have fair and equal access to high quality care and services tailored to their unique needs and circumstances. 

To enable success, CHCs can avail themselves of emerging solutions that are targeted to address the pain points that arise in pursuing the Quintuple Aim.  In creating successful and financially sustainable programs, centers can follow a three-step process focused on assessment, implementation, and management. 

As part of the assessment process, centers can both develop analytics to best understand the needs of their patient population[5] and benchmark their financial and operational performance to identifying the initiatives that represent “low-hanging fruit” in the Quintuple Aim.  The result of these analyses may uncover gaps that drive costly inefficiencies while uncovering key community partnerships with outside organizations that may serve a force multipliers in enhancing the value of care.

After identification of initiatives, thoughtful implementation within the organization is needed to enact lasting change.  As an example, centers can consider updated compensation incentives for provider staff to help drive behavior in addressing health-related social risks and advancing health equity.[6]  Implementation also includes education of key stakeholders within centers including board members, administration, and provider leadership.

As a final tool, new regulatory flexibilities are available to FQHCs and other CHCs in the form of the value-based enterprise (VBE) safe harbors and exceptions to the Anti-Kickback Statute and Physician Self-Referral Law (aka, Stark Law).  A VBE can explicitly direct referrals and provide compensation for doing so, as long as these activities occur within a governance framework designed to further either the population health improvement or cost reduction pillars of the Quintuple Aim.[7]  These flexibilities create a pathway to enhance existing partnerships with community organizations that serve as sources of referrals to CHCs or recipients of downstream referrals for specialized care.

How We Can Help

Working with clients throughout the US, Citizen Health Strategies (based in Minnesota) and InHealth Advisors (based in Colorado) have partnered to prepare a presentation diving into more details as to how FQHCs and other CHCs can achieve the Quintuple Aim of healthcare.  You can access this presentation below.  We are pleased to continue the conversation and help your organization advance community health, so do not hesitate to reach out to us!

[1] National Association of Community Health Centers, Community Health Centers: Providers, Partners and Employers of Choice - 2024 Chartbook, pgs. 13 – 20.  Published online March 1, 2024, and accessible at: https://www.nachc.org/resource/community-health-center-chartbook/

[2] Ibid, 90-94.

[3] Khan, Basim and Rosenbaum, Sara.  “As They Await Congressional Action, Community Health Centers Are Facing A Perfect Storm.”  Health Affairs Forefront, published online October 11, 2023 and accessible at: https://www.healthaffairs.org/do/10.1377/forefront.20231006.664408

[4] Nundy Shantanu, MD, MBA, et al.  “The quintuple aim for health care improvement: A new imperative to advance health equity.” JAMA. 2022;327(6):521-522, accessible at: https://jamanetwork.com/journals/jama/fullarticle/2788483

[5] Warner, Jon.  “Creating New Insights from Population Health Data.”  Citizen Health Strategies, published online May 1, 2024, and accessible at: https://www.citizenhealthstrategies.com/post/creating-new-insights-from-population-health-data

[6] For sample compensation incentives, refer to the video prepared by InHealth Advisors entitled “Paying Physicians for Addressing Health Equity and Social Determinants of Health,” published March 19, 2024 and accessible at: https://www.inhealthadvisors.com/post/video-paying-physicians-for-addressing-health-equity-and-social-determinants-of-health

[7] For a brief primer on VBEs, refer to the article authored by InHealth Advisors entitled “Top 10 Things Every Health Care Leader Needs to Know About Value-Based Enterprises,” published September 22, 2024 and accessible at: https://www.inhealthadvisors.com/post/top-10-things-every-health-care-leader-needs-to-know-about-value-based-enterprises