Over the past decade, there has been a substantial increase in federal funding for federally qualified health centers (FQHCs). In 2001, federal funding for health centers was $977 million and by 2008, it had nearly doubled to $1.8 billion. Research by LoSasso and Byck (2010) found that the increased funding led to both more health center sites and expanded capacity at existing sites. Previous research falls short, however, of exploring the ultimate effects of the recent health center expansions on access to care. Our study investigates the impact of increased health center funding on access to and utilization of health services for non-elderly adults. Unlike many previous studies, we explore the effects of funding increases on access for adults with Medicaid in addition to the effects for the uninsured.

Our empirical approach uses changes over time (2001-2007) in market-level funding to identify the effects on individual-level measures of access to care.  Data on federal funding for FQHCs are from the Bureau of Primary Health Care’s (BPHC) Uniform Data System (UDS) and individual-level measures of access and use are derived from the National Health Interview Survey (NHIS).  Access measures include indicators for having a usual source of care or unmet needs for medical or dental care. We also consider office visits and emergency department visits as indicators of access. The key explanatory variable is a market-level measure of federal funding for FQHCs. We estimate person-level models of access and use as a function of individual and market-level characteristics. By using market-level fixed effects to focus on the changes within markets, we avoid potential confounding from unobservable, time-invariant market characteristics that are correlated with both FQHCs and access.

Our findings indicate that increased FQHC funding over time is associated with access improvements for adults with Medicaid. Medicaid-covered adults are less likely to have unmet dental needs and frequent ED visits and more likely to have an office visit in response to increases in federal FQHC funding over time. Uninsured adults also experience benefits of funding increases, being more likely to have a usual source of care and an office visit.

With the Affordable Care Act (ACA) expected to greatly expand the population of Medicaid-covered adults, concerns exist regarding the ability of the health system to meet the resulting demand for health care services. This study suggests one potential method for improving access for Medicaid and uninsured patients through increased funding to FQHCs. Given that the ACA also included additional funding for investment in FQHCs, this study aims to provide insight into how these dollars might best be allocated in a post-reform system.