In this section we provide an overview of the Federally sponsored health
center landscape, including the health center program’s history,
funding structure, special issues and challenges for health centers. We also
provide some context on the role of IT and health IT in health centers based
on findings from our environmental scan. Much of this section draws from
findings elaborated in greater detail in the Environmental Scan report which
is Appendix A to this document.
Federally sponsored health centers, authorized under Section 330 of the Health Centers Consolidation Act of 1996 and reauthorized in 2001, are integral parts of the nation’s health care “safety net” (providers who service underserved and uninsured populations) in both rural and urban regions across the United States. Since their inception as a pilot program by the Federal government in 1964, health centers have been instrumental in delivering primary care medical services to vulnerable populations. They represent a critical public resource for individuals and families who face barriers to securing medical insurance or obtaining care from private providers. With expansions in the FY 2005 budget, there will be well over 800 funded Community and Migrant Health Centers and about 3,700 sites by 2006.
Despite some demographic and organizational differences, in recent years health centers have increasingly banded together to form networks or consortia that seek to provide their members with access to sophisticated information systems, business services, IT expertise, and technical support. This trend, spurred by the onset of Medicaid mandatory managed care and the need for health centers to maintain their competitive status, has produced significant organizational and operational changes, including changes in how health centers approach IT. In particular, several grant programs sponsored by the BPHC, described below, have encouraged network development.
Since the 1996 passage of the Health Care Consolidation Act, the Federally Qualified Health Center (FQHC) program has grown steadily both in the provision of services to target populations and in funding. Federal appropriations for health centers have risen steadily over the past two decades, an increase that has accelerated over the past several years. For FY 2005, the program was funded at nearly $1.73 billion dollars. Growth in funding has resulted in the increase in health center access points: new health center grantees as well as new health care delivery sites for existing centers. Exhibit 2 below provides a breakdown of estimated actual revenue accrued by health centers from 2002 through 2004. In addition, the table shows the share of total revenue by source of funding (roughly consistent across years).
Exhibit 2. Health Center Annual Revenue by Source, 2002 — 2004 *
Funding Source |
2002 Revenues | 2003 Revenues | 2004 Revenues | 2004 % of Total |
|---|---|---|---|---|
| Section 330 | $1,145 | $1,323 | $1,629 | 24 % |
| Medicaid | $1,808 | $2,116 | $2,432 | 36 % |
| Medicare | $299 | $326 | $382 | 6 % |
| SCHIP | $130 | $150 | $145 | 2 % |
| Other 3rd party | $328 | $367 | $418 | 6 % |
| Self Pay | $303 | $352 | $416 | 6 % |
| Other grants (Federal) | $171 | $198 | $196 | 3 % |
| Other grants (State, local, other) |
$171 | $979 | $1,257 | 19 % |
| Total | $5,061 | $5,811 | $6,282 | 100 % |
* NOTE: All dollar figures in millions2
As noted in the introduction, health centers have a special set of data and administrative requirements, and these requirements have direct implications for health centers’ needs for IT. Health centers are responsible for providing services to underserved and vulnerable populations, including Medicare and Medicaid recipients, the underinsured, and the uninsured. Health centers must maximize third party payments and collect fees from patients using a sliding fee schedule.
As such, health centers have a specific need to gather socio-economic data from their patients both to assess their eligibility for Medicaid, Medicare or other insurance or health care subsidization programs and to assess patient fees based on ability to pay. This is particularly challenging when working with populations that frequently fall in and out of eligibility for different programs and may seek care only at sporadic intervals and at different locations. Other special features of the context in which health centers operate are described below.
The unique responsibilities Federally-funded health centers face, as described above, place them in a prime position for investment in IT and health IT. Reporting requirements, administrative data management, and public health tracking projects can all be facilitated through the use of applications like practice management, EHRs and data warehouses. Many health centers have accepted the potential for health IT to improve efficiency and quality of care. Even during the relatively short time span of this project, we observed important examples of increased health IT adoption among health centers including use of applications such as EHR. Several factors have contributed to this trend, including various funding programs that have encouraged health center adoption of IT and health IT through participation in networks.
At the time of the environmental scan, we found that health centers had focused significant investment in practice management systems with some mixed, but overall positive results. Our thought leaders noted that the vast majority of medium-to-large health centers had some form of practice management software and that these applications generally improved basic administrative functions, especially billing. However, they also noted that health centers struggled with using advanced practice management functions, such as reporting, and that very few of these systems were interoperable with other systems used by the health center.
Thought leaders also described a highly fragmented market for practice management software with providers still struggling to understand their requirements and vendors challenged to differentiate themselves. At the time of the environmental scan, several health center-focused vendors were actively engaged in mergers and acquisitions and were still adjusting to clients’ functionality needs, making it difficult to accurately assess differences between products and the long-term stability of vendors. More than one health center we spoke with as part of the case studies had experienced problems when their practice management vendor was bought by another company or discontinued support for their product.
We found that EHRs were (and are) far less common than practice management systems. Thought leaders indicated that health centers were cautious about implementing EHR, due to concerns over provider comfort with the technology, the need for ongoing training, and general reluctance to invest in a technology that is still evolving. As with practice management, our findings revealed that the vendor landscape for EHR is fragmented, with the substantial majority of vendors having fewer than fifty clinic clients.
In general, the vendor landscape for the health center market was found to be still maturing, the largest category of vendors serve a small group of regionally defined customers. Increasingly, we noted that best of breed vendors packaged EHR tools or functionalities with practice management. The most mature use of EHR was found in systems such as the VA, Partners Healthcare or the Regenstrief Institute that had developed their own software for both inpatient and outpatient settings. We found that selected staff model managed care organizations such as Kaiser Permanente were able to work with best in breed vendors such as Epic to implement high end health IT systems, but that these products were out of reach financially for most health centers.
Importantly, the environmental scan pointed to the rising trend of health center participation in community-wide information systems collaborations, which generally took the form of regional health center networks. Funding for health center network activities came from dedicated outside grants, usually from the BPHC. Networks are typically funded through programs such as the Integrated Services Development Initiative (ISDI), Shared Integrated Management Information Systems (SIMIS), and the Healthy Communities Access Program (HCAP). Several Federal funding programs that contributed to the formation of health center networks that are utilizing IT are summarized in the bullets below.
Thought leaders reported that, if sustained, networks could enable health centers to overcome the challenges associated with IT adoption and establish a common platform for practice management, EHR and clinical data systems across providers in a community. The environmental scan demonstrated growing interest and capacity of health centers to organize and meet those challenges through network activity. Thought leaders suggested that many health centers represent fertile ground for network-based IT initiatives.
Figures drawn from the HRSA/BPHC Section 330 Grantees Uniform Data System Calendar Year 2002, 2003 and 2004 National Rollup Reports. 2004 Report Available Online at: <ftp://ftp.hrsa.gov/bphc/pdf/uds/2004/04Rollup_Nat_01Jul2005.pdf>
3. Press Release, October 2, 2003. Health Resources and Services Administration. “HRSA Awards $10 Million in Grants to Create and Expand Health Center Networks, Improve Information Management Activities”. October 2, 2003. Available online from: <http://newsroom.hrsa.gov/releases/2003/isdi.htm>
4. Preview of HRSA Funding Opportunities. Primary Health Care Summaries. Available online from: <http://www.hrsa.gov/grants/preview/primary.htm#hrsa05109>
5. Press Release, October 13, 2004. “HHS Awards $139 Million To Drive Adoption of Health Information Technology. “Agency for Healthcare Research and Quality, Rockville, MD. Available online from: <http://www.ahrq.gov/news/press/pr2004/hhshitpr.htm>
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