The Role of Medicaid Expansion in Care Delivery at Community Health Centers

Community health centers provide comprehensive primary care to medically underserved communities, regardless of patients’ insurance status or ability to pay. Health centers have enjoyed bipartisan support for decades, because they provide affordable, cost-effective care for millions of Americans while saving the overall health care system money.¹ When people gained insurance coverage under the Affordable Care Act (ACA), it was expected that reliance on health centers would increase. As a result, Congress doubled federal grant funding for centers and created incentives for clinicians to practice in them.

Previous research has shown that health centers in states that expanded Medicaid have particularly benefitted from the ACA.² But less is known about how the delivery of health care in centers has changed. This brief uses data from the Commonwealth Fund 2018 National Survey of Federally Qualified Health Centers to compare the experiences of health centers in states that have and have not expanded Medicaid.

Highlights

• Health centers in Medicaid expansion states, compared to those in nonexpansion states, were significantly more likely to report improvements in their financial stability (69% vs. 41%) and in their ability to provide affordable care to patients (76% vs. 52%) since the ACA took effect. They have also been somewhat more likely to operate under a value-based payment model, like the patient-centered medical home.
• Health centers in Medicaid expansion states were more likely to offer medication-assisted treatment for opioid addiction (44% vs. 25%), provide counseling and other behavioral health services, and coordinate patient care with social service providers in the community (58% v. 48%) than health centers in nonexpansion states.
• However, health centers in states that expanded Medicaid were more likely than those in nonexpansion states to report unfilled job openings for mental health professionals (73% vs. 64%) and social service providers (45% vs. 36%), perhaps indicating higher demand for these professionals and insufficient supply.
• While many factors account for the observed differences between expansion and nonexpansion states, community health centers appear to benefit from Medicaid expansion. If Congress does not renew federal funding for health centers this year, there could be a reversal in these gains, jeopardizing the health care safety net in communities throughout the United States.

Background

More than 1,300 Federally Qualified Health Center organizations (FQHCs) operate in more than 11,000 sites across the U.S. They provide high-quality, comprehensive primary care to one of every 12 Americans.³ Health centers serve as a safety net for low-income and uninsured people, providing free or low-cost care regardless of insurance status or ability to pay. They also provide health services in areas of the U.S. where primary care providers are lacking.

For decades, health centers have enjoyed bipartisan support. That’s because they benefit all Americans, by:⁴

• reducing the need for more expensive care, like emergency department visits
• lowering overall health care costs
• employing thousands of people
• generating billions of dollars in economic activity through job creation and the purchase of goods and services.

The ACA shifted the landscape for health centers significantly. As millions of previously uninsured people gained health insurance coverage through the marketplaces and the expansion of Medicaid eligibility in many states, demand for health center services increased.⁵ Anticipating this increased demand, the ACA created the Community Health Center Fund, which appropriated $11 billion over five years to support health center expansion — a doubling of federal funding to these providers.⁶ To ensure the increased demand could be met, the ACA also enhanced incentives for care providers to work in health centers, through loan forgiveness programs, new training opportunities, and more.⁷

However, the ACA did not affect health centers uniformly. Previous research has indicated that health centers in states that expanded Medicaid have fared better, particularly because of the fewer number of uninsured patients, compared to centers in states not expanding Medicaid.⁸ Since health centers serve a disproportionate number of low-income, medically complex patients, it is important to understand if, and how, care delivery itself differs between health centers in expansion and nonexpansion states.⁹

In this brief, we examine findings from the recent Commonwealth Fund 2018 National Survey of Federally Qualified Health Centers to compare the experiences of health centers in the 31 states and the District of Columbia that had expanded Medicaid as of September 2018 to those in the 19 states that had not (Appendix A). We look at financial stability; participation in payment arrangements, in which reimbursement is tied to performance; availability of behavioral health care and social services; and other characteristics (see “How We Conducted This Study” for more detail). Readers should note, however, that the differences observed may be influenced by factors other than Medicaid expansion, such as whether health centers are located in an urban area or in a particular region of the country (Appendix B), what kind of Medicaid policies a state has in place, or differences in the populations of Medicaid expansion and nonexpansion states.

The survey found significant differences between health centers in Medicaid expansion states and nonexpansion states related to finances and capacity to serve patients (Appendix C). Health centers in expansion states were significantly more likely to believe their financial stability and funding had improved since the ACA took hold, with nearly 70 percent reporting increased financial stability compared to 41 percent in nonexpansion states. Three of four health centers in expansion states felt they were better able to provide affordable care to their community, while only half did in health centers in nonexpansion states.

Paying health care providers based on the value of care they deliver to patients has the potential to lower the costs of care while improving health.¹⁰ We found that health centers in expansion states were significantly more likely to participate in models in which they or their clinicians could receive financial incentives for achieving quality-of-care targets. They were also more likely to be recognized as patient-centered medical homes and receive financial incentives for participating in such programs. Patient-centered medical homes have been shown to improve health outcomes and reduce health disparities for low-income populations.¹¹ However, for some models of value-based payment, there were no significant differences between health centers in expansion and nonexpansion states (Appendix D).

Behavioral health issues, including substance use and mental health disorders, disproportionately affect low-income people, but accessing behavioral health services is difficult for many.¹² As the safety-net provider for millions of low-income people in the U.S., health centers play a key role in addressing patients’ behavioral health problems. A large majority of health centers surveyed offered onsite, short-term counseling to patients, with centers in expansion states significantly more likely to provide this critical service. Health centers in Medicaid expansion states were more likely to offer treatment for substance use disorder as well as medication-assisted treatment for opioid addiction at a rate almost twice as high as in centers in nonexpansion states (Appendix E).

Patients served by health centers are disproportionately living in poverty and therefore are at greater risk for hardships like homelessness, transportation barriers, or food insecurity than are other patients.¹³ Because unmet social needs can have a negative impact on physical health and access to health care, the majority of health centers offered some services to identify and address them. Health centers in expansion states were more likely to address the social needs of their patients, typically by coordinating patient care with social service providers in the community and offering transportation to and from medical appointments (Appendix F).

While health centers in expansion states were more likely to offer behavioral health and social services to their patients, they were still struggling to hire more mental health and social service providers. Health centers in expansion states were more likely to report having budgeted but unfilled positions for mental health providers, social workers, and staff to help patients obtain social services. As health centers in expansion and nonexpansion states alike look to expand provision of these services, such shortfalls in workforce capacity could present a barrier to care (Appendix G).

Conclusion and Policy Implications

Compared to community health centers in nonexpansion states, centers in expansion states reported greater financial stability, engagement in value-based payment arrangements, and availability of behavioral health care and social services. While many factors other than Medicaid expansion likely influence these differences, the increased Medicaid revenue that health centers in expansion states receive may help them improve the way they deliver care. Medicaid expansion also may incentivize health centers to offer the behavioral health care and nonmedical services that a growing share of patients requires.

However, health centers in expansion states were more likely than their counterparts to report unfilled positions for mental health and social service staff, a potential barrier to meeting needs for behavioral health and social care. It’s also important to note that differences in care and capacity in Medicaid expansion states versus nonexpansion states were sometimes modest. In addition, although not demonstrated by our analysis, other changes since the ACA took effect, such as the national, enhanced federal funding for health centers and the increase in private, subsidized health insurance coverage, likely impacted health centers in all states as well.

Any further weakening of the ACA, like the enactment of Medicaid work requirements and other policies that restrict health insurance coverage, could increase the number of uninsured, thereby reducing health centers’ revenue from insurance and increasing costs. This ultimately could have a negative impact on the financial stability of health centers. Moreover, if Congress fails to renew federal funding — set to expire in September 2019 — health centers may be forced to halt their efforts to innovate, expand, and improve care. Such outcomes could affect the entire U.S. health care system, whose success and efficiency depends on a high-performing safety net.

How We Conducted This Study

The Commonwealth Fund 2018 National Survey of Federally Qualified Health Centers was conducted by SSRS from May 16, 2018, through September 30, 2018, among a nationally representative sample of 694 executive directors or clinical directors at Federally Qualified Health Centers (FQHCs). The survey sample was drawn from the Uniformed Data System (UDS) list of all FQHCs in 2016 that have at least one site that is a community-based primary care clinic. The list was provided by the National Association of Community Health Centers (NACHC). All 1,367 FQHCs were sent the questionnaire and 694 responded, yielding a response rate of 51 percent. The survey consisted of a 12-page questionnaire that took approximately 20 to 25 minutes to complete. Data were weighted by number of patients, number of sites, geographic region, and urban/rural location to reflect the universe of primary care community centers as accurately as possible. Expansion status was determined using the FQHC-reported largest site address. If the largest site address was not provided, and the FQHC had only one site, we used UDS data to determine the site’s state. We excluded 21 responses because we were unable to determine their largest site through one of these methods, yielding a total sample of 673 responses. We used chi-square tests to assess differences between health centers in expansion states and those in nonexpansion states.

Acknowledgments

The authors thank Michelle Proser of the National Association of Community Health Centers (NACHC) for providing input on our survey instrument; Robyn Rapoport, Erin Czyzewicz, and James Noack of SSRS for assistance designing and administering the survey; and Yaphet Getachew and Mekdes Tsega of the Commonwealth Fund for assistance with verifying data.