Sally Moneyfretter, the executive director of Quality Care Community Health Center (CHC), reads the latest financial report from her chief financial officer and sighs. It seems the CHC is constantly teetering on the edge of financial insolvency. There's never revenue to meet their underserved and vulnerable patients’ myriad needs, or to make needed investments. Sometimes Sally wonders how she'll keep the health center’s doors open—and what will happen to their patients if she can't.

Quality Care CHC is a federally-qualified Health Center (FQHC) operating in a medically-underserved area (MUA) in an inner city on the eastern seaboard. The MUA is characterized by high poverty, high infant mortality rates, and a shortage of primary care providers. As a FQHC, Quality Care is dedicated to its mission of providing affordable, quality primary care services to medically-underserved populations, regardless of their insurance status or ability to pay. Two-thirds of Quality Cares’ 33,000 patients live below the federal poverty line, and 87% have incomes below 200% of poverty (about $20,780 for a family of three). Quality Care CHC serves a diverse patient population. Fifty-five percent of patients are African-American, 20% are Hispanic/Latino, 5% are Asian, and the rest identify as white non-Hispanic. As is common among low income, majority-minority populations, Quality Care CHC's patients experience a disproportionate share of chronic conditions, especially obesity, diabetes, hypertension, high cholesterol, heart disease, cancer, asthma, HIV, mental illness, and substance abuse. To meet its patients’ needs, the health center provides comprehensive primary care, lab, and pharmacy services, and has recently expanded its dental, mental health, and substance abuse care.

Thanks to the Affordable Care Act, and the state's decision to expand Medicaid eligibility to those with incomes up to 138% of the federal poverty level, Quality Care CHC has seen a significant increase in its insured population. Forty percent of its patients are enrolled in Medicaid or Children’s Health Insurance Program (CHIP), 23% have third-party insurance, and 7% have Medicare. However, these coverage increases do not come close to meeting the cost of delivering services. (Note: Since community health centers are non-profit, their charges are a proxy for costs). Quality Cares' Medicaid reimbursements cover only 80% of the health centers’ costs. Collections for Medicare, private insurance, and other public insurance are even lower, ranging between 55% and 56% of costs.

Unfortunately, a significant portion of these newly insured patients are under-insured. Given their low incomes, many patients purchased less costly bronze level plans through the federal and state marketplaces. These plans have deductibles of up to $5,000 per person per year, as well as, coinsurance and copayments and provide no federal subsidies. When patients who have not yet met their deductibles seek services at Quality Care, they often cannot afford the out-of-pocket costs. Some forego needed care or end up in the emergency department when their conditions worsen. For those who do not seek services from the health center, Quality Care provides a discount by charging on a sliding fee scale, which is based on income and in effect subsidizes the cost of their care.

Due to Quality Care's reputation as a safety net provider, that serves all comers regardless of their ability to pay, the health center has seen an increase in the number of uninsured patients seeking care. Despite increased coverage options and the CHC's robust enrollment efforts, 30% of its patients remain uninsured. These patients are charged via a sliding scale, and their payments account for a fraction of the cost of services delivered. Sometimes patients leave the health center without paying their fee. Occasionally, sympathetic front-line staff don't charge the fee.

Quality Care's lifeline is its annual federal Section 330 grant, which helps defray the cost of providing care to its uninsured and underinsured patients. The grant also funds enabling services that support and assist the delivery of primary care and facilitate patients' access to care. These services include case management, eligibility and enrollment services, transportation, interpretation, community health worker programs, and patient education. Without this grant, the center would cease to operate. However, this funding does not cover the full cost of treating uninsured patients. Nationally, the annual total cost of a CHC patient is $890, yet the annual health center funding per uninsured patient is only $713 (National Association of Community Health Center, 2018). Quality Care CHC has experienced a similar shortfall. Small local and state grants help to fill funding gaps.

Given the tight funding landscape, Quality Care strives to provide cost-effective care. Rough calculations estimate that the health center's annual cost per patient is about $2,550. Since this is less than the average per-patient cost for all Health Center users ($4043), and non-health center users ($5,306) (NACHC, 2018), Ms. Money fretter believes her health center is performing optimally and hasn't sought potential cost-cutting and quality improvement initiatives.

The health center's financial situation has far-reaching implications. Quality Care CHC has experienced difficulties recruiting and retaining clinicians and other staff. Currently, the health center has vacancies for a family practitioner, a nurse practitioner, two mental health providers, a dental health provider, and a social worker. The health center cannot offer salaries and benefits that compete with nearby private and for-profit organizations. In addition, prospective applicants often cite community amenities (or the lack thereof) and other Health Center location factors as the reason they decline offers of employment. The health center's tight budget also impacts its ability to initiate capital projects and needed upgrades. Quality Care has plans to expand and improve its facility, enabling it to accommodate more providers and serve more patients, as well as to update its information technology and electronic medical records, and perennial funding gaps preclude their implementation.

Please fully answer these questions and explain your answers.

1. What are the facts in this case?
2. What are three factors contributing to the community health center's problems?
3. What are the consequences of a community health center closure for both patients and the community?
4. Are there sources of revenue that the CHC hasn't focused on, such as fundraising in the community, and with foundations and corporations?
5. What alternative sources of care are available for community health center patients?
6. How important is the provision of enabling services for community health center patients?
7. What are the consequences of patients foregoing care?
8. What strategies could the executive director employ to address the health center's financial challenges?
9. What steps can the executive director take to improve the health center's recruitment and retention rates?