Can Federally Qualified Health Centers provide a model for delivering high-quality programs for young children?
Idea in Brief
Amy Friedlander suggests building on the Federally Qualified Health Centers model to create Federally Qualified Early Childhood Education Centers to support high-quality early learning for all children.
by Amy Friedlander
During the pandemic, the importance of child care as a foundational element of the economy and the necessity of access to child care as a precursor for a full economic recovery, have been touted in hundreds of articles, webinars, and videos. They are now included in federal infrastructure legislation, elements of these spending proposals, which cover issues ranging from maximum parent co-pay to universal prekindergarten. However, they are not yet aligned at a systems level to address the severe, confounding and many challenges that caregivers, children and child care providers experience. The promise of early childhood education (ECE) and its ability to positively impact young children and their families cannot be realized without profound change.
Hailed as an evidence-based, two-generation approach to poverty, ECE programming is limited because public funding to provide quality ECE to all children birth to five is not available. Arbitrary, fixed amounts of public welfare funds are used to pay for babysitting so that parents can work. Because the amount of funding is not responsive to documented need, only a percentage of parents eligible for this benefit receive it. And because the funding is made available for child care, and not education, the rates paid for this service are very low. Staff education and credential, and other licensing requirements are similarly low, staff turnover is high, and safety, not learning, is the basic standard that is achieved.
A handful of education programs exist to support preschool for 3 and 4 year olds. Again, funds are fixed and not mandated according to determination of need, so only a small percentage of eligible families receive these services. Offered through Education, rather than Welfare, these programs have higher staff qualification standards and higher quality.
But overall, this patchwork of programs, which also includes Head Start/Early Head Start for those at the lowest economic levels, has created a system of generally small, low quality, for profit ECE providers. Rather than assuring kindergarten readiness, ongoing academic success, and lifetime opportunities, the current ECE system is a squandered opportunity.
Are there other models of public financing that might pave the way for full funding of the cost of quality early childhood education (ECE) for all children birth to five and successfully ensure ECE as a permanent element of our national infrastructure? Federally Qualified Health Centers (FQHCs) have been providing quality primary and preventive care to individuals with low incomes for more than 25 years, and may provide such a model.
Federally Qualified Health Centers
Administered by the Department of Health and Human Services’ Center for Medicare & Medicaid Services, FQHCs are operated by community based nonprofit organizations that have successfully applied for FQHC status by demonstrating community need for specialized populations and the ability to meet those needs at specific levels of quality. With the FQHC designation, providers receive cost-based reimbursement for services provided to patients with Medicaid (public insurance), cash grants, and malpractice insurance through the Federal government. The cost-based payment rate is updated annually and adjusted based on: FQHC Geographic Adjustment Factor; New patient adjustment; Initial Preventive Physical Examination or Annual Wellness Visit adjustment.
FQHCs must operate under a consumer Board of Directors governance structure to ensure consumer voice and leadership. Services must be offered on a sliding fee scale based on patient family income and size, so that families pay what they can for services and are not denied services or ongoing access to their medical homes as their incomes increase over time. While FQHCs create a separate system of health care for low-income individuals, they assure access to quality care for this population and reduce overall medical system costs for expenses such as emergency room visits.
Critical to the model is the acknowledgement that Medicaid reimbursement, which is set by the government, is not adequate to cover the true cost of care. While health care providers that serve patients with a mix of insurance revenue sources, including a small percentage of those with Medicaid, can break even overall, those that serve predominantly or only Medicaid patients cannot. Rather than raising Medicaid rates to meet market rates (as established by other insurance providers), the government created the FQHC system.
In the ECE sector, federal and state rates for services are also inadequate to cover costs. But several factors muddy the issue of the true cost of care in ECE. First, the definition of ECE varies more widely than, say, the definition of a prenatal care visit. The health care sector has an established system of defining and coding services based on the qualifications of the provider, the location and length of the visit, and other factors. In ECE, the service has no singular definition. Some families require part day, part year care. Other children remain in care 10 hours per day all year round.
“The determination of the true cost of quality has been elusive in ECE.”
This is because the standards and requirements around the educational degree and/or credentials of ECE staff differ greatly (vs. health care in which licensure sets the singular standard), and because the market rate for ECE is arbitrarily capped by parent ability to pay (vs. health care in which insurance, not private pay, is the primary revenue source).
As part of a proposed Federally Qualified Early Childhood Education (FQECE) system, providers will be required to calculate a true cost of quality based on staff credentials and requirements established by the Department of Education. Parity with K-12 teachers, in terms of qualifications and compensation, should be the goal. The FQECE system, like the FQHC system, should likewise allow for adjustments to the true cost of care based on geographic and other factors.
How could such a system be developed for ECE? What would Federally Qualified ECE Centers look like and how would they change the current ECE landscape?
Federally Qualified ECE Centers
Federally Qualified ECE Centers (FQECECs) would be large, high quality early childhood education centers operated by community based nonprofit organizations, and accessible to children regardless of income. This would eliminate the need for the vast majority of small, low-quality, for-profit centers that exist today. Ostensibly, owners and qualified staff at existing centers interested in continuing to work with children would seek higher compensated employment at the new FQECECs. Minimally qualified staff would need to re-tool to seek employment in other sectors or seek additional educational degrees/credentials to work in FQECECs. For those parents seeking care in smaller settings, family child care would remain a viable option.
The network of FQECECs would create an unprecedented trove of data related to the impact of quality ECE. It would also create an unprecedented opportunity to test curricula, modifications to teacher preparation standards, and other key aspects of quality teaching in support of positive learning outcomes. In the same way that the FQHCs have been models in the integration of physical and behavioral health care, FQECECs could model the integration of ECE and early intervention services. Integration of children with special needs into child care settings has long been a priority, but the model for so doing has been challenging for underfunded ECE providers to implement. With the ability to apply for adjusted rates based on the percentage of children with early intervention plans in a classroom, for instance, FQECECs could modify staffing ratios to meet the needs of all young learners.
Next Steps
Creation of a national task force to develop FQECEC standards based on Early Head Start and Head Start standards. This could include staffing educational/credential/licensure requirements aligned with the National Association for the Education of Young Children’s Power to the Profession Unifying Framework; task force creation of a competitive funding application, data reporting system, and other operational requirements.
Federal funds allocated and designated to allow a competitive Department of Education application process and a minimum of five years of operational funding for the top 50 scoring FQECEC applications.
Federal funds allocated and designated to fund a process and outcome evaluation to examine the impact of FQECECs. This could include the financial impact in areas such as the anticipated reduction of special education services based on kindergarten readiness for the first cohort of participating children.
Development of a scaling plan, including a budget and timelinebthat would meet the needs of all low-income children birth to five nationally.
Determination if scaling of FQECECs would eliminate or lessen the need for: Head Start, Early Head Start, universal prekindergarten and other Federal child care programs and how programs and funding could best be aligned to serve the most families in the most effective manner.
Determination if scaling of FQECECs would eliminate or lessen the need for state prekindergarten programs and development of options for how those funds could be used to support FQECECs at the state level.
Determination if scaling of FQECECs would lessen the use of early intervention funds elsewhere and development of options for how those funds could be used to support FQECECs.
Determination if and how FQECECs should become part of the Child Care Developmental Block Grant funding mechanism, if the availability of FQECECs eliminates the need for quality set asides, and how those funds could be used to support FQECECs at the federal and state levels.
“With unimaginable levels of government funding being invested in ECE, and with providers teetering on the verge of collapse from the punch of pandemic enrollment challenges and national staffing shortages, now is the time to look to public models of services and programs that have demonstrated positive outcomes and have been successfully scaled, to build an effective system of early childhood education. ”
Pouring public funding into the current broken system of child care is akin to throwing money down the drain – parents, children, teachers, and taxpayers all deserve better. Piloting of a new national model for ECE – one that: operates through nonprofit, community organizations; builds on Early Head Start and Head Start models to define quality in a comprehensive and holistic manner; benefits from economies of scale; focuses on integration – of infants, toddlers and preschoolers and on children with differences; and, supports data collection and analysis to understand real time supply and demand and the cost and impact of quality ECE – is the type of innovation that this moment requires.
Bringing more than a decade of experience working in early childhood education, Amy Friedlander is a trainer/consultant based in Philadelphia and partnered with a national consulting practice, Opportunities Exchange. Current national consulting engagements focus on the development, implementation and evaluation of new early childhood education business models and include: planning navigation to two jurisdictions working to develop family child care networks, facilitation of a national community of practice for family child care network hubs, implementation support to 7 hub organizations piloting Shared Service Alliance projects in Indiana, and creation of tiers of quality improvement and business support services for family child care providers in Tulsa, Oklahoma. Amy holds a MBA from New York University and a BA from the University of Virginia. Connect with Amy on LinkedIn.