External Challenges Call for More than Just Casual Internal Reflection

Last week I attended the NACHC Farmworker Conference in Denver, met with clients and colleagues and listened to a number of speakers.  Most of the speakers addressed the external challenges facing FQHCs — cuts in grants, concerns about Medicare and Medicaid reimbursements, fewer opportunities for expanding services, the need for expanding advocacy — or the history of the migrant health movement, its successes and the need to be vigilant in an uncertain political climate.

One speaker, Jim Crupi, provided a wake up call that I hope resonated past just the standing ovation and stayed in the minds of participants once they got home.  He spoke specifically to the need to recognize reality, and to learn to adapt to it.  Funding is going to be harder to find.  There is going to be more competition for a smaller pool of resources, and “business as usual” isn’t going to cut it.

Faced with uncertainty from without, the place to start to reposition and prepare to respond is internal… within.  Administrative structures and processes need to be responsive to change, particularly where the numbers are large.  With employment expenses typically accounting for 65 to 75% of an FQHCs expenses, you simply have to give more attention to how you are paying your employees; it isn’t just the amount, its how you’re doing it.  During our implementation studies, we typically find FQHCs with about 5 to 8% of their salary cost allocated incorrectly — do the math for your organization.  Pay more than you should, and you’re throwing money out the door… pay less, and you won’t attract and retain the right people, and you’ll spend much more in turnover costs.  The right response is not furloughs or across the board cuts.. the answer is to position your organization so that it doesn’t need to take those kinds of drastic measures.

I heard several speakers talk about how one of the strengths that FQHCs have is their ability to be flexible and responsive to changes in conditions, but rarely have I seen a compensation program that supports that proposition.  You can take a chance, and like Jim Crupi said, hope that somehow your world will stay the same, or you can face the challenge and create a more flexible compensation program that will address your needs not just today, but in the future.


About Edmund B. Ura

Edmund B. Ura, MAIR, JD, works with governing boards, executives and human resources staff to develop methodologies for ensuring fair and equitable compensation programs that support achievement of organizations' missions. Contact Ed at ebura@mercesconsulting.com.
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2 Responses to External Challenges Call for More than Just Casual Internal Reflection

  1. I think you are missing a huge component – that is, unless FQHCs change from a public delivery of service culture to more of a for profit – performance based, customer service driven culture many will not survive the changes and cut in funding. Also, FQs need to move away from the medical service delivery only model to one that offers other services like health education disease prevention in the community, core specialty services, housing and behavioral health. However the driver here will be that FQs will need to become health and human services organizations that must diversify the revenue streams to not just include their reliance on public funding but also on private foundations, individual donors and the community at large.

    • I believe you’re absolutely right with respect to the need to change to a model that looks more like a “for profit” — in fact that was part of the theme of a presentation I made in May at the NACHC Farmworker Conference. Among other topics, the focus was: “non-profit is a tax status, not a state of mind.” This particular post was in response to a couple of presentations I heard where the focus was primarily on the external factors, ignoring the reality that many health centers lack the basic structure to even move toward reacting to those external factors.

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