The Cost Consequences of Improving Diabetes Care: The Community Health Center Experience

Background: Despite significant interest in the business case for quality improvement (QI), there are few evaluations of the impact of QI programs on outpatient organizations. The financial impact of the Health Disparities Collaboratives (HDC), a national QI program conducted in community health centers (HCs), was examined. Methods: Chief executive officers (CEOs) from health centers in two U.S. regions that participated in the Diabetes HDC (N = 74) were surveyed. In case studies of five selected centers, program costs/revenues, clinical costs/revenues, overall center financial health, and indirect costs/benefits were assessed. Results: CEOs were divided on the HDC's overall effect on finances (38%, worsened; 48%, no change; 14%, improved). Case studies showed that the HDC represented a new administrative cost ($6-$22/patient, year 1) without a regular revenue source. In centers with billing data, the balance of diabetes-related clinical costs/revenues and payor mix did not clearly worsen or improve with the program's start. The most commonly mentioned indirect benefits were improved chronic illness care and enhanced staff morale. Discussion: CEO perceptions of the overall financial impact of the HDC vary widely; the case studies illustrate the numerous factors that may influence these perceptions. Whether the identified balance of costs and benefits is generalizable or sustainable will have to be addressed to optimally design financial reimbursement and incentives.