Balancing Margin and Mission: A Heartfelt Approach for Hospital Sustainability

It is often said in healthcare that where there is no margin there can be no mission. This highlights the delicate relationship between financial health and the ability to serve others. And it is one that every hospital and healthcare system must navigate.

Sustaining operations financially is undeniably important, but what if we shifted our perspective to prioritize the mission first, trusting that the margin will follow?

The Financial Challenge in Today’s Healthcare Landscape

In today’s healthcare landscape, rising costs and declining funding for uncompensated primary care present significant challenges. Hospitals are seeing an increase in visits from low-income and uninsured individuals, placing additional strain on resources. Many of these patients rely on emergency rooms for their primary care needs, a trend that has surged nationwide—from 108 million visits in 2001 to 155 million in 2022, according to the Centers for Disease Control and Prevention, marking a 43.5% increase. This is where community health centers step in.

The Rise of Federally Qualified Health Centers (FQHCs)

Since 1965, community health centers, now known as Federally Qualified Health Centers (FQHCs), have expanded significantly to address the growing unmet needs of medically underserved populations. Today, there are more than 1,500 FQHC and FQHC Look-Alike entities across America, more than double the number from 2001. Their mission is clear:

• Increase access to outpatient primary care in underserved communities
• Provide care regardless of patients’ ability to pay

While both FQHCs and FQHC Look-Alikes share similar missions and offer critical services to underserved populations, achieving full FQHC status can involve more complex regulatory hurdles and funding requirements. For hospitals looking to quickly expand their reach and impact, FQHC Look-Alikes offer many of the same benefits, such as enhanced reimbursement rates and access to the 340B Drug Pricing Program, without needing to secure federal funding grants. This makes FQHC Look-Alikes an ideal option for hospitals seeking a more flexible and streamlined approach. Adopting the FQHC Look-Alike strategy offers numerous strategic benefits for hospital systems:

• Enhanced Financial Resilience: Leveraging Medicaid, Medicare, and 340B program enhancements to boost revenue streams
• Expanded Service Reach: Increasing access to primary care for medically underserved populations
• Improved Community Reputation: Strengthening the hospital’s role as a vital community health partner
• Sustainable Growth: Ensuring long-term operational sustainability through diversified funding sources

Embracing Mission Alignment

FQHC Look-Alikes offer hospitals a powerful strategy to align with their mission of serving underserved populations while ensuring financial sustainability. Becoming an FQHC Look-Alike involves addressing the community’s health challenges and provides an opportunity to align with – and streamline the composition of – the hospital’s Community Health Needs Assessment (CHNA). This alignment not only enhances patient outcomes but also strengthens the hospital’s role as a trusted community health partner. FQHC Look-Alikes provide critical access to Medicaid, Medicare, and the 340B Drug Pricing Program, helping hospitals improve care delivery while navigating financial pressures.

Take the Next Step Toward Sustainability

Imagine if health systems could adopt the FQHC Look-Alike strategy, seamlessly integrating the care of medically underserved residents with the financial enhancements available through Medicaid, Medicare, and 340B programs. This approach could give rise to a new mantra: “Lead with the mission, and the margin will follow.”

For the public or not-for-profit hospitals and health systems in America dedicated to caring for their community’s most vulnerable, exploring the FQHC Look-Alike model could be a transformative step.

Learn how the FQHC Look-Alike model can support your mission and enhance your financial sustainability. Contact us and let us partner with you to create a thriving future for your community and your institution.