Federally qualified health centers: Are they effective?

July 23, 2013

Chairs in an empty waiting room of a federally qualified health center.In 1964, the Office of Economic Opportunity established federally qualified health centers (FQHCs), which were initially called neighborhood health centers, as part of President Lyndon B. Johnson’s “War on Poverty.” The legislative goals for neighborhood health centers were to:

  • Provide comprehensive, high-quality health services.
  • Be accessible to low-income residents.
  • Be responsive to patient needs.
  • Offer employment, education and social assistance.

These goals, with the exception of providing employment assistance, continue today and have expanded to include additional services such as oral health, mental health, and pharmaceutical services.

The number of FQHCs has grown over the past 40 years. In 1965, there were two FQHCs in the country; today there are more than 1,200 FQHCs with more than 8,500 service sites. The growth has largely resulted from a view that FQHCs can achieve the original goals as well as help curb health care costs by reducing emergency department visits and hospitalizations. Indeed, the Patient Protection and Affordable Care Act (ACA) provides an $11 billion Health Center Trust Fund because of their perceived importance in serving the Medicaid population. In fiscal year (FY) 2011 and FY 2012, however, the federal government cut annual health center appropriations by 27 percent (from $2.2 billion to $1.6 billion). To offset the funding cuts, the Obama administration diverted $600 million from the Health Center Trust Fund each year, preventing those funds from creating new access points and expanding services as intended. In FY 2013, the federal government again held health center appropriations to $1.6 billion, which necessitated another diversion of trust fund dollars.

The core question is: What does the evidence say about the impact FQHCs have had on the legislative goals listed above? A companion piece to this summary provides a comprehensive overview of FQHCs.

The bottom line answer to this question is that FQHCs are generally meeting their original goals by serving low-income populations with quality, cost-effective health care.