The Hardest Year Yet: How This FQHC Is Fighting to Regain Financial Footing

North Shore Community Health is confronting rising no-shows, delayed payments, and thin margins by reworking operations and tightening financial controls.

Federally qualified health centers (FQHCs) across the country are facing a more precarious financial reality.

As costs have continued to rise, public funding and reimbursement have failed to keep pace. For many organizations built to operate on thin margins, the question has become how to remain financially viable in a landscape where nearly every revenue stream carries some level of uncertainty.

At North Shore Community Health (NSCH), that challenge has forced leadership to move quickly to stabilize finances by leaning on operational changes, tighter performance tracking, and adjustments at the point care.

Margaret Brennan has guided the Massachusetts-based FQHC through plenty of financial distress over the course of her near 15-year tenure as president and CEO.

“But I would say the last year-plus has probably been the hardest time that I've seen in community health,” she said.

The pressure became clear for NSCH when it projected a significant operating loss heading into last year’s close, according to Brennan. Like many health centers, it had limited flexibility on expenses, with staffing accounting for the majority of costs. Leadership made the decision to reduce its workforce, a move Brennan described as necessary but difficult for a lean organization.

Since then, the focus has been on stabilizing performance without further reductions.

That effort starts with the schedule. Missed appointments, once relatively controlled, have climbed sharply, resulting in a direct hit to revenue.

“What is most concerning to us is the increase in our no-show rates,” Brennan said.

NSCH had pushed its no-show rates down an “enviable” 13% to 15%, Brennan highlighted, but they’ve trended back up in the past year into the 25% to 30% range.

Executives are now monitoring operational metrics more closely, including appointment fill rates, provider productivity, and visit volumes. Financial performance is reviewed regularly, with leadership focused on whether the organization can maintain a positive margin through the year.

Cash flow has added another layer of complexity. Delayed payments from state programs have tied up revenue, forcing closer attention to liquidity and collections.

In response, NSCH has made changes at the front lines. Staff are trained to collect co-pays and outstanding balances during visits, an approach aimed at improving collections as more patients arrive without insurance.

“The expectation is that you're going to collect any co-payments, any past due amounts owed at the point of care because the minute the patient leaves, the collectability goes down from there,” Brennan said.

Pictured: Margaret Brennan, president and CEO, North Shore Community Health.

Managing Revenue Stream Uncertainty

The financial strain extends beyond any single issue, with changes in insurance coverage, Medicaid dynamics, and federal policy introducing volatility across multiple funding sources.

Brennan described how uncertainty has become constant, requiring leaders to rethink how they plan and make decisions.

“When there's all that uncertainty about all your revenue streams, it just creates a lot of anxiety,” she said.

To better understand its finances, NSCH worked with AAFCPAs, a New England-based CPA and consulting firm, on strategies like scenario planning. Leadership is modeling how shifts in payer mix or coverage levels could affect revenue, allowing the organization to prepare for a range of outcomes rather than relying on long-term assumptions.

Courtney McFarland, partner at AAFCPAs, said many health centers are facing similar pressures. Operating losses are becoming more common as expenses outpace funding, while liquidity is tightening across the board.

“In many cases, we're seeing FQHCs sitting with less than 10 days cash, and we're seeing a small percentage at negative cash, which means they are living out of lines of credit at this point,” she said. “This is simply not a sustainable model.”

In some cases, organizations are reassessing the services they offer.

“We're looking at losses that are saying perhaps we (FQHCs) can't offer specialty services anymore because the cost of the specialty services is pulling too much from our operations and we can no longer afford to offer these services,” she said.

Redesigning Care Delivery

Within that environment, North Shore is also rethinking how care is delivered, with an emphasis on efficiency and flexibility.

Telehealth remains a central part of that strategy. A sizeable share of visits continues to be conducted virtually, particularly in behavioral health, allowing the organization to maintain continuity and reduce the impact of disruptions, even when physical locations close due to snowstorms, Brennan noted.

“There's a reason why there's all this money going into telehealth,” she said. “It would behoove my colleagues from across the country to really take another hard look at this and get in on it and build that capacity. It's very efficient and patients really like it.”

Additionally, NSCH is evaluating administrative costs and exploring ways to reduce spending through technology. AI is one area under consideration, particularly for functions such as translation services that continue to grow more expensive.

Elsewhere, the organization is working with peer organizations to share resources and reduce overhead. Discussions are underway around joint approaches to functions where scale can improve efficiency, such as human resources, IT, and compliance, according to Brennan.

“It’s trying to think a little bit more creatively,” she said. “Business as usual is not going to continue to work anymore. It just isn’t.”

As financial pressure persists, the timeline for planning is narrowing. Rather than prioritizing long-term growth, McFarland believes FQHCs should concentrate on near-term stability and what it takes to remain viable over the next year.

“We need to look at a one-year plan,” she said. “What does the next year look like? How do I get to a place where I can consider zero loss, which is the ultimate goal at this point for an FQHC?

For NSCH, that mindset is influencing decision-making across the organization. In the face of unrelenting uncertainty, Brennan is focused on what can be controlled each day.

She said: “We're in a position where we're trying to make the least bad decisions that we can.”