Community Health Centers Lower Cost of Children’s Health Care by 35 Percent

WASHINGTON, DC and NEW YORK (June 20, 2017)—Compared to doctor offices and other providers, community health centers lower the cost of children’s primary care by approximately 35 percent, according to an analysis published by researchers at the Geiger Gibson/RCHN Community Health Foundation Research Collaborative at George Washington University’s Milken Institute School of Public Health (Milken Institute SPH). Many children served by these health centers are poor and entitled to unusually broad coverage with no cost sharing through Medicaid’s early and periodic screening diagnosis and treatment (EPSDT) benefit. But despite the comprehensive range of services community health centers offer, children who receive the majority of their care at health centers incur substantially lower average annual costs than those who receive care in other settings.

The analysis is the first to show that community health centers (CHCs) provide care for children at a significant savings. This study builds on previous research, which showed that community health centers reduce overall medical costs for adults while providing comprehensive, high-quality care. The new study suggests that health centers provide the same kind of high-value care when it comes to pediatrics.

“Health centers not only keep costs down but also report good health outcomes,” said Leighton Ku, PhD, MPH, Director of the Center for Health Policy Research at Milken Institute SPH. “Community health centers find efficiencies that reduce costs for ambulatory care and prescription medications.” Ku authored the new report along with Brian Bruen, MS, lead research scientist and lecturer in the Department of Health Policy and Management at Milken Institute SPH.

The study analyzed health care costs for pediatric care as tracked by the nationally representative Medical Expenditure Panel Surveys (MEPS) 2011-2012, the most recent data available on source of care. The researchers looked at children who used community health centers as their primary source of care as well as those who obtained care at doctor offices and other pediatric providers. The authors found that:

  • On average, health centers saved $618 in overall medical costs per child, per year with total costs of $1,133 per year for CHC users compared to $1,751 for non-users.
  • Health centers saved money on outpatient care. The study showed that the cost of ambulatory care for children at community health centers was just $418 per year compared to $697 for other providers.
  • For children who received the majority of their care at CHCs, expenditures for prescription drugs were nearly 50 percent lower - only $163 per child per year compared to $320 for children getting care from other providers.

The study also notes that while community health centers provide a nationwide system of access to primary care, there is no such safety net system for specialty care. Community health centers often report having difficulty getting their patients appointments with specialists, especially for uninsured children. As a result, parents may turn to emergency rooms to get more specialized care for their children.

Community health centers may save money by offering a broad range of outpatient services under one roof or in one visit—thus requiring fewer visits to different providers and decreasing fragmentation of care. Lower drug costs suggest that these health centers manage prescription drug usage effectively and promote the use of less expensive generic drugs.

“Community health centers provide care that is both high in quality and highly efficient,” said RCHN Community Health Foundation President and CEO Feygele Jacobs, DrPH. “This research contributes important new findings at a time when the future of America’s health care safety net is threatened by efforts to undo the Affordable Care Act and cut Medicaid, and when the continuation of funding for community health centers and the Children’s Health Insurance Program is under debate.”

The report, “Community Health Centers Reduce the Costs of Children’s Health Care,” can be accessed here.