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July 14, 2025
Quarterly Article
Justin Markowski
Jul 14, 2025
Jul 2, 2025
Back to The Milbank Quarterly
Policy Points:
Context: Community health centers (CHCs) are a critical and growing part of the health care safety net, doubling over the past 15 years to expand access to essential health care services to over 31 million patients in traditionally underserved communities. However, increasingly, CHCs have opened care delivery locations in communities already served by another CHC, potentially creating competitive markets with unknown implications for how this safety net operates.
Methods: This retrospective cohort study was performed in 810 CHCs that operated between 2009 and 2023. A difference-in-differences design was used with staggered implementation to examine the impacts of competitive shocks on clinic performance and, consequently, whether this changes the types of patients served and how clinics operate.
Findings: When a rival CHCs’ growth results in a competitive shock, 95% of new sites are located no more than ten miles away from their existing service area. After a competitive shock, incumbent CHCs on average experienced significant decreases in financial stability and shifts in their patient mix toward those with Medicaid and away from patients who are uninsured and have more chronic conditions. Clinics also reallocated 11% of their resources closer to the encroaching rival, recentering and concentrating their organizations. Strikingly, multiple competitive shocks increased the annual probability of a closure, acquisition, or loss of CHC status from 0% to 1.67%.
Conclusions: Despite explicit policy guardrails, this pattern of rapid, recent, and localized growth has distorted incentives for individual clinics, weakening this critical safety net. Clinics may respond to such mounting pressures by engaging in a turf war, reallocating and concentrating resources closer toward the encroaching rival at the expense of their social mission and financial solvency. Both state and federal policymakers must incentivize CHCs to disperse into communities without established clinics and introduce new protections against underservice by stabilizing clinic budgets.
