7 essential recommendations for FQHC leaders

Federally Qualified Healthcare Centers (FQHCs) are a critical part of our healthcare delivery system.

Approximately 1 in 14 people in the United States—24 million—receive services through the nation’s 1,400 FQHCs and their nearly 10,000 healthcare delivery sites. FQHCs benefit from bi-partisan support, and are at the center of ACA expansion. Despite this, there is limited information on these centers, their leaders, and the trends affecting them.

A new Sage Growth Partners survey of 175 FQHC CEOs has revealed some of the unique pressures faced by these organizations in terms of leadership, competition, and financial sustainability.

One key takeaway is that community health centers must adopt a business mindset in order to keep their doors open. These organizations provide healthcare to some of the neediest, most underserved communities in the US – and have traditionally been hyper-focused on this mission, often eschewing the idea of margin over mission. But these important institutions can’t succeed in serving these communities if they don’t survive today’s healthcare industry challenges.

Here are seven tips for FQHCs to sustain their organizations and thrive into the future:

1. Actively pursue patient acquisition and retention, as these will be key to success. Medicaid expansion has created interest from provider organizations who traditionally have not focused on this part of the market. Take the time and resources to assess current marketing activities, and consider a comprehensive marketing audit. Build patient acquisition and retention programs that are grounded in strategy, driven by ROI, and governed by a formal marketing plan.

2. Have an appetite to compete. Know who you’re competing with and why. It’ s no longer just other FQHCs in your service area. Use that to differentiate how you position and communicate services in the community.

3. Differentiate service offerings. If you haven’t already, integrate mental and behavioral health with primary medical care. Other types of provider organizations are not as focused on mental health – this is a critical advantage in advancing population health efforts, and appeals to consumers who can obtain more services at one location.

4. Recruit leaders with business mindsets. You can’t operate with a business mindset without business-minded people running the organization. Leaders should consider a range of candidates that include talent from the for-profit world.

5. Rethink leadership roles. Internally, roles need to be un-siloed and matrixed around an enterprise population health strategy. Externally, each leader should be formally connected to one or more strategic partners (payers, hospitals, etc.). This will necessitate big changes in the functions of leadership roles, and the competencies needed in these roles.

6. Blur the lines between partners and competitors. Consider deepening partnerships with other organizations, even other providers who might also be considered competitors. There could be unrealized opportunities for referrals, co-location, or other partnerships that would benefit both organizations.

7. Plan strategically for value-based care and population health. These are not optional – embrace them. As an example, a large FHQC in the mid-west recently joined an ACO, with the goal of learning enough to eventually take on full risk. They then became part of an MCO, which led to millions of dollars in revenue gains. They are now trying to garner support to start an MSO to reduce costs, and considering acquiring smaller FQHCs in the area. These business decisions are leading to better care for their population, but are also strategic business decisions that will strengthen and sustain their organization.

FQHCs are more important to their communities than ever before, but to be successful service organizations, they will also need to be successful businesses. By assembling the right leadership team to compete, operate, and market strategically, FQHCs will be able to thrive in the ever-changing healthcare marketplace.

About the Author

Dan D’Orazio is President at Sage Growth Partners (SGP), a Baltimore-based healthcare research, strategy, and marketing firm that accelerates commercial success for healthcare organizations through a singular focus on growth. Dan has worked extensively with healthcare providers, technology and device companies, payers, and private equity venture capitalists—with firms ranging from startups to Fortune 10 companies. Dan began his career in social work at the UMBC Shriver Center Choice Program, a nationally recognized program working with youth in at-risk communities in Baltimore and the region. He earned his MBA from the Johns Hopkins University Carey Business School, and served on the Professional Faculty of the Carey Business School from 2010-2015 teaching strategy and entrepreneurship.

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