Landmark Study Confirms Medicaid Cost-Savings at Health Centers; Total Cost of Care for Health Center Patients was 24% Lower

Authors found that health centers save, on average, $2,371 (or 24%) in total spending per Medicaid patient when compared to other providers.

A new study confirms significant Medicaid cost-savings among patients at Community Health Centers. The study, recently released online, will be published in the November issue of the American Journal of Public Health. Authors analyzed Medicaid claims data for both health center and non-health center patients in 13 states, and found that health centers save, on average, $2,371 (or 24%) in total spending per Medicaid patient when compared to other providers. The study focused on Alabama, Colorado, California, Florida, Iowa, Illinois, North Carolina, Texas, Vermont, Mississippi, West Virginia, Connecticut, and Montana, making it one of the largest multi-state studies of its kind. Researchers found that health center Medicaid patients had lower utilization and spending than non–health center patients across all services studied, including:

  • 22% fewer specialty care visits
  • 33% lower spending on specialty care
  • 25% fewer inpatient admissions
  • 27% lower spending on inpatient care
  • 24 % lower total spending.

“This study confirms with hard data what has long been assumed – that Community Health Centers’ unique model of care leads directly to significant cost savings in the Medicaid program. It adds to the wealth of research documenting the tremendous cost-savings that health centers generate across the health care delivery system for a comparatively modest federal investment,” said Dan Hawkins, Senior Vice President for Policy and Research at the National Association of Community Health Centers. “Health centers deliver results through the effective management of primary care and chronic disease management, and today’s study shows those results in the form of 24% lower total spending. At a time when the whole health care system is focused around expanding access and improving quality while controlling cost, the implications for policymakers are enormous.”

The study was conducted by researchers from the University of Chicago, Johns Hopkins University, the University of California at Irvine, the Agency for Healthcare Research and Quality and the Health Resources and Services Administration. The abstract can be found by visiting this link. Community Health Centers care for 25 million people nationwide, including more than 1 out of every 6 Medicaid beneficiaries. Nearly half (49 percent) of all health center patients rely on Medicaid to cover their care yet, Medicaid payments to health centers make up only 1.6% of total Medicaid spending.

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