Is Value-Based Care Right for Your Community Health Center?

FQHCs are extremely experienced at juggling multiple stressors, from complex patient populations and limited resources to complicated regulations unique to their official designation.

At the same time, demand for FQHC services is at an all-time high: even before the pandemic, 29 million individuals sought the services of community health centers, including 6.4 million uninsured and 13.7 million Medicaid beneficiaries, according to the National Association of Community Health Centers.

Editor's note: This was originally published in December 2021 and reviewed and updated in October 2023.

As an FQHC leader, you are on the front lines of guiding your organization as it extends its reach across your community.  You have likely been exploring all possible avenues to help sustain your health center.  

Value-based care could be your most promising option.Value-based care (VBC) is the idea that healthcare providers should be reimbursed based on the impact of their care, not the volume of services they provide.  By prioritizing proactive and holistic treatment, healthcare organizations should be able to reduce avoidable spending, improve outcomes, and create better experiences for entire communities.

Public and private payers offer a wide variety of VBC models that link reimbursement to quality.  The majority of these models emphasize the importance of primary care, preventive medicine, and supportive socioeconomic services to forestall the development of expensive and life-limiting chronic diseases.  

This is the type of work that FQHCs have been doing for decades.  The rest of the healthcare industry is now catching up, giving community health centers a chance to earn enhanced reimbursements for the high-quality care they already provide.

That doesn’t mean VBC is plain sailing for every FQHC.  To successfully augment existing payment structures with pay-for-performance incentives, health centers need to have the right mindset, expectations, and operational infrastructure in place.  FQHCs should have a clear idea of their goals, competencies, and opportunities for improvement.

Here are some key questions to ask yourself about whether or not value-based care is right for you.

Want more on what value-based care means for FQHCs? Download our guide.

Am I struggling to manage a growing patient population with increasingly scarce clinical resources?

The nation is facing a catastrophic shortage of up to 124,000 physicians and a staggering 1.2 million nurses, not to mention other healthcare professionals. FQHCs, especially those in rural regions, are poised to take the hardest hit as new graduates seek employment in larger health systems located in more populated areas.

Coupled with the growing number of people on Medicaid, FQHCs may soon find themselves unable to ensure access to care for underserved populations.  They will need to explore new strategies for maximizing clinical assets and shifting care way from the traditional office-based appointment.

VBC offers the chance to do so.  Many initiatives encourage team-based care that leverages skillsets from across the care continuum, allowing all members of the team to work more effectively and practice at the top of their licenses.

By integrating additional care perspectives, including social workers, dieticians, chronic disease coaches, and employing innovative technology strategies such as telehealth and remote patient monitoring, FQHCs can keep patients healthier at home and reduce avoidable utilization.  

With less need for urgent acute care appointments, FQHCs can ease pressure on the daily schedule while achieving the quality and spending benchmarks that can lead to incentive payments and shared savings.

Do I want to further enhance the value of the population health management work I already perform to earn grant funding?

FQHCs prize their grant writers as much as their clinical leaders.  Grant funding is an extremely important source of revenue for community health centers, though it can be unpredictable.  Many times, FQHCs put a great deal of time and effort into developing a new clinical initiative for a specific grant program only to watch the project fizzle once the funding comes to an end.

Value-based care creates the opportunity to multiply the impact of their efforts and potentially sustain quality improvement work for longer.

That’s because quality-based VBC incentives and grant opportunities often align very closely, giving FQHCs the chance to receive their grant funding, any enhanced fee-for-service reimbursement for qualifying care activities, and the shared savings that may result from improving outcomes and controlling spending.

Am I seeking ways to withstand pressure to consolidate or sell to another business entity?

FQHCs are driven by their mission to provide care to underserved communities, but sometimes passion alone isn’t enough to meet growing demands.  Community health centers finding themselves in a constant battle for financial sustainability may turn to other provider entities for help through mergers, acquisitions, or other consolidation methods.

For many health centers, consolidation is an attractive way to maintain their presence in the community without worrying as much about the business side of healthcare.  But for others, including those with proud histories of creativity and determination in the face of significant adversity, maintaining independence is a top priority.

As the unsustainable fee-for-service environment fades, VBC is the pathway forward for these FQHCs.  Not only does VBC offer enhanced reimbursement opportunities and the chance for shared savings, but it also allows independence-minded FQHCs to partner with other organizations in innovative ways.

For example, FQHCs can join an independent provider association (IPA) with other community health centers.  The IPA provides a vehicle for engaging in VBC contracts with Medicaid and other entities.  It also offers administrative support, policy expertise, and the power of numbers while negotiating with payers – all without compromising the clinical and financial autonomy of its members.  

With additional reimbursement opportunities, close alignment of new and existing incentives, and the chance to maintain independence, value-based care might be the pathway forward that your FQHC has been looking for.

You may be able to take advantage of value-based care to remain agile, innovative, and energized to serve your community for the long term.

If you are ready to learn more about why value-based care might be right for your FQHC, download our guide here.