In response to the growing healthcare disparities among groups of a specific race, ethnicity, socioeconomic status, and/or geographic location, national reform initiatives and healthcare organizations are searching for ways to deliver more cost-effective and higher quality care (Chassin & Galvin, 1998
; Lurie et al., 2005
). To transform the way in which primary healthcare is delivered to underserved populations in community health centers (HCs), the Bureau of Primary Health Care (BPHC), within the Health Resources and Services Administration (HRSA), Department of Health and Human Services (HHS), began the Health Disparities Collaboratives (HDC) in 1998. The aim of this quality improvement (QI) initiative is to reduce health disparities and improve the quality of care in federally funded HCs (Chin et al., 2004
). The goals of the HDC are as follows: (1) to generate and document improved health outcomes for underserved populations; (2) to transform clinical practice through new evidence-based models of care; (3) to develop infrastructure, expertise, and multidisciplinary leadership to improve health status; and (4) to build strategic partnerships.
HCs participating in the HDC select a multidisciplinary team to work on the initiative. These teams spend 1 year learning and applying methods to improve their healthcare delivery, and then continue these quality improvement techniques during ensuing years. Resource expenditures include staff participation in learning sessions and conference calls, and staff time to learn, design, monitor, and document changes. During the study period, team members participated in 3 regional learning sessions and a national forum during the initial learning year. Oftentimes, quality improvement efforts also include the development of new workflow processes, such as the introduction of electronic patient registries, a tightly integrated continuum of care, and physician feedback and reminder systems. Past research has found that the Collaboratives have been effective at improving diabetes care (Chin et al., 2004
) and that over 90% of HC staff have felt that the HDC were worth the effort and were successful. The HDC program in diabetes care has also been found to be cost-effective from a societal perspective (Huang et al., 2007
). As of December 2007, 915 HCs nationwide were participating in the HRSA Health Disparities Collaboratives (Charles Daly, e-mail communication, December 10, 2007).
Despite the significant investment in QI efforts and encouraging data regarding their effectiveness, less is known about how these programs have affected the financial status of HCs. Past research has demonstrated that delivering high-quality care in the current healthcare system—and particularly within HCs—does not always save costs and increase revenue for the provider (Rosenthal et al., 2004
). In many ways, HCs are purposely designed as nonprofitable organizations. National data on HC patients indicate that almost all of them (91.1%) are at or below 200% of the poverty line, 40.1% are uninsured, and nationally, many suffer from chronic conditions like diabetes, hypertension, and asthma, conditions requiring costly and a more intensive level of care (National Association of Community Health Centers, 2005
; U.S. General Accounting Office, 2000
). HCs are distinctive philosophically, organizationally, and financially among primary care providers (Chien et al., 2005). They are located in areas where care is needed but is scarce, and provide care for millions of Americans regardless of their insurance status or ability to pay. The fact that HCs are able to provide quality healthcare to disenfranchised groups may be a critical element in narrowing gaps in healthcare and outcomes (Shi et al., 2004
While HCs have been an excellent source of quality care for the underserved, many face operational or financial challenges, and some have lost federal grant funding (U.S. General Accounting Office, 2000
). The growing number of uninsured, the rising costs of medical care, and a decrease in federal and state subsidies used to cover the cost of providing charity care all impose financial hardships on HCs (National Association of Community Health Centers, 2007
). The average annual cost of treating a patient is $230, more than what the federal HC grant actually pays per uninsured patient (National Association of Community Health Centers, 2007
). More than half of all HCs reported operating deficits between 1997 and 1999 (McAlearney, 2002
) and in 2005, about 40% of HCs reported operating deficits (Rosenthal et al., 2004
). These resource constraints add to existing barriers to implementing and sustaining quality improvement programs in HCs.
In the face of these financial realities, many leaders of healthcare organizations question whether participation in QI programs like the HDC might negatively affect their organizations’ financial status (Severens, 2003
). It is uncertain whether the return on investment and quality of care gains outweigh the financial and human effort needed to implement and maintain such programs (Øvrtveit et al., 2002; Robert Wood Johnson Foundation, 2005
). In the context of the HDC and HCs, researchers have found in a small case study series that the administrative costs of the collaborative have no regular source of reimbursement and represent new costs that centers must absorb (Huang et al., 2008
). HCs do receive federal subsidies for the provision of general healthcare services, but they do not receive regular subsidies dedicated to the HDC. While these initial case study findings are informative, we do not know whether these experiences are generalizable to HCs as a whole. An equally important deficit in our knowledge is that we know very little about how chief executive officers (CEOs) at HCs perceive the financial impact of the HDC and what factors influence these perceptions. These perceptions may be important determinants of senior leadership’s ability to devote resources to QI-related programs. The nature and the determinants of these financial perceptions may also be important for the optimal design of QI policies and financial incentives. Furthermore, successful adoption can support dissemination and sustainability of QI programs.
The purpose of this study is to describe CEOs’ perceptions of the financial impact of the HDC on HCs and to identify predictors of these perceptions. We hypothesized that size, payer mix, and overall financial status of the center would be important determinants of the perceived financial impact.