What Constitutes a Competitive Environment? A Case Study of the FQHCs Industry In California

Abstract

Objective: This study aims to identify competitive forces in the FQHCs environment using Porter’s Five Force model. Data Sources: The study utilized various secondary data sources. The Health Resources and Services Administration (HRSA) requires FQHCs to submit a performance report using the measures defined in the Uniform Data System (UDS). The UDS provides data such as the scope and volume of services provided by FQHCs, staffing, number of delivery sites, and finances. The UDS consider being a census of aggregate level health center data for FQHCs. Secondly, the American Hospital Association Annual Survey (AHA), which provides organizational details regarding hospitals. The third dataset is the Area Health Resources File (AHRF). It includes county-level data about health services volume, demographics, and health professional supply. The fourth dataset is the Internal Revenue Service (IRS) Form 990, which was used was used to calculate FQHCs’ total margin. The fifth dataset is the California Health and Human Services Open Data Portal (CHHS), which includes county-level data such as the number of Medicaid eligible populations and the number of primary care clinics. Finally, the study used the U.S. Department of Housing and Urban Development (HUD) United States Postal Service Zip Code Crosswalk Files. The Crosswalk Files was used to allocate both FQHC’s and FQHC’s sites Zip-Codes to counties. Method: this was a descriptive study. Descriptive statistics included frequencies and percentages to describe categorical variables. In addition, means (standard deviations, SD) will describe continuous variables. The study utilized bivariate analysis, including the chi-square test and ANOVA test, to find differences regarding the competitive forces variables among counties that had a new established FQHCs and counties that did not have newly established FQHCs in California for the years 2014 and 2015. Result: the study found that the number of FQHCs sites and primary care clinics in a county is statistically different between counties that had a newly established FQHC compared to counties that did not have a newly established FQHC. Counties that had newly established FQHCs had on an average a lower number of FQHCs sites and primary care clinics. Competition for FQHCs might arise when more FQHCs exist in a market. More research can be conducted to understand how FQHCs behave in a competitive environment.