The experience and performance of community health centers under managed care

To (1) analyze the performance of 7 community health centers (CHCs) under managed care contracts and (2) identify key planning and operational components that all CHCs must address to remain viable as populations shift to managed care.

In-depth studies of 7 geographically diverse CHCs were conducted. Centers with multiple years of managed care contracting experience were selected. A detailed questionnaire about CHC operations under managed care was administered on-site to management staff from the 7 participating CHCs. Cost and utilization performance data were collected from managed care organizations, and their staff were interviewed to gauge the performance of the 7 CHCs within managed care networks.

The shift of state Medicaid and other insured populations to managed care and changes in federal protection for CHCs suggest that CHCs must participate in managed care delivery systems to remain economically viable. In-depth studies of 7 CHCs with extended contracting histories with managed care organizations demonstrated that the CHCs offered comparable performance to other network providers, with lower cost and utilization for specialty care. Centers also experienced lower per-member monthly pharmacy costs. In addition, CHCs served as important sources of enrollment for managed care organizations. To succeed under managed care, CHCs must undertake substantial changes in their planning and operations, including developing appropriate risk relationships, diversifying their revenue base, mainstreaming operations, and improving performance monitoring.