Federally qualified health centers: An overview

July 22, 2013

Two people wait in a busy waiting room at a federally qualified health center.Health center is an all-encompassing term for federally qualified health centers (FQHCs) and FQHC look-alikes; they are a key component of the health care safety net that provided care to more than 20 million Americans in 2011.

The Patient Protection and Affordable Care Act of 2010 (ACA) has positioned health centers to play a crucial role in the future health care environment. Expansions in Medicaid and privately insured populations are expected to put a significant demand on primary care, particularly in underserved, low-income communities where large increases to the number of newly insured are anticipated. Despite the expected growth in coverage, an estimated 23 million people (or more if states opt out of the allowed Medicaid expansion) will remain uninsured.

Newly insured and uninsured populations will depend on FQHCs and FQHC look-alikes for primary care. Despite bipartisan political and financial support, FQHCs face challenges. To achieve long-term sustainability, FQHCs need to become financially self-sufficient, find ways to address the growing health professional shortages, advance collaborative efforts with provider networks, and improve cost and quality outcomes.

This paper describes the FQHC model and how FQHCs operate nationally; it then provides a look at the future of FQHCs within the context of health care reform, and concludes by summarizing the challenges facing FQHCs. A companion piece examines whether FQHCs are effective.