Health services research has shown that reimbursement methods developed to pay health care providers contain various financial incentives that affect provider decisions related to the delivery of health care services. Community health centers recently experienced a change in reimbursement methods by a major payor, Medicaid, a change that may affect service delivery to the vulnerable populations that community health centers serve. This dissertation sought to understand how community health centers responded to a change to a prospective payment system (PPS) particularly as those responses related to the delivery of services.

This qualitative study used an inductive analysis of multiple case studies to explore the experiences of key decision makers at three community health centers. Using a conceptual framework drawn from resource dependency and institutional theory, data from interviews with administrative staff, clinical staff, and board members were transformed through a rigorous process of coding and categorizing that led to the recurrent themes characterizing the responses of the community health centers.

Despite the structural similarities of PPS in the three states where the community health centers were located, the community health centers had different responses to PPS and varied in how they changed the delivery of services. Fulfilling the mission of the community health center emerged as the primary goal with ensuring financial viability an important criterion for meeting that goal. The descriptions from the interviewees revealed the complexity of their relationship with Medicaid including a level of uncertainty leading to increased instability for the community health centers.

This dissertation is an important, though early, first step in understanding how community health centers responded to a change in payment systems and what those responses meant for the delivery of services for all patients. The findings from this dissertation have generated additional questions concerning the drivers of change to service delivery, the influence of Medicaid on community health centers, and the roles of key decision makers within the organization. The response of health care organizations to a change in reimbursement methods is a multi-faceted, complex process. This dissertation illuminates one part of this complicated process and provides a path to future research.