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Health Care Costs and Financing

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One-third of health center CEOs view health disparities collaboratives as negatively affecting centers' finances

Health Disparities Collaboratives (HDC) is a quality improvement (QI) initiative to reduce health disparities and improve the quality of care in federally funded community health centers (CHCs), which typically are a safety net for treating poor, uninsured patients. CHCs participating in the HDC assemble a multidisciplinary team that spends 1 year learning and applying methods to improve their health care delivery, which the team then implements during ensuing years. Often, QI efforts include development of new workflow processes, such as electronic patient registries, or physician feedback and reminder systems.

Despite the promise of this approach to improve care, one-third of the 100 CHC chief executive officers (CEOs) surveyed believed that the HDC had a negative financial impact on their health center. The growing number of uninsured, rising costs of medical care, and decrease in Federal and State subsidies used to cover the cost of providing charity care all impose financial hardships on CHCs, with about 43 percent of CHCs reported operating deficits in 2005. Investing in QI apparently adds to the financial strain of these centers. Close to three-quarters of the CHC CEOs indicated that the HDC increased the costs of providing patient care, as well as overall operating costs. This was partly due to the resource expenditures for staff participation in training sessions and staff time to learn, design, monitor, and document changes.

QI initiatives such as the HDC may lead to higher clinical costs, because activities related to the initiative and some preventive services are not billable. They may also lead to lower clinical revenues if acute care visits are reduced as a result of better care or better adherence to treatment and disease management. CEOs reporting the harmful financial impact of the HDC were from centers with a higher percentage of Medicaid or uninsured patients compared with center CEOs who perceived no financial harm. The study was supported in part by the Agency for Healthcare Research and Quality (HS13635).

See "The perceived financial impact of quality improvement efforts in community health centers," by Karen Cheung, M.P.H., Adil Moiduddin, M.P.P., Marshall H. Chin, M.D., M.P.H., and others, in the Journal of Ambulatory Care Management 31(2), pp. 111-119, 2008.

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