You Can't Market Your Way Out of Medicaid Cuts
But You Can Market Your Way Into a More Resilient Health Center
Community health centers are facing financial difficulties that cannot be solved by marketing. Yet this does not imply that marketing has no role to play in finding a solution.
When a health center is under financial pressure, the usual response is to reduce marketing because revenue is falling, overhead costs must be cut, and marketing is seen as discretionary.
It is reasonable to possess that instinct; indeed, in many organizations dealing with the future environment, it might even be the wrong approach.
In 2024, community health centers served more than 34 million patients, a million more than in 2023. Their average operating margin fell to -2.4 percent. For the first time in recent years, national CHC expenses have exceeded income. The grantees lost a net of 65,739 Medicaid patients but gained 256,351 uninsured patients. The trend is clear: demand for care has increased, while reimbursement for bringing patients in the door has decreased.
The requirement for community engagement under Medicaid, which takes effect on January 1, 2027, will add to this pressure. As KFF has stated, health centers could suffer revenue losses exceeding $3 billion due to coverage losses and an increase in uninsured patients resulting from the 2025 reconciliation act. The extent of this potential disruption goes well beyond what any marketing program could address.
Marketing cannot take the place of Medicaid. The real issue is whether, under the new circumstances, marketing is a discretionary overhead expense or an operating lever directly tied to payer mix, capacity utilization, and the organization's survival. The answer to that question should shape how health centers allocate their marketing resources and how they view the purpose of marketing.
The Revenue Resilience Gap
In the past, the revenue strategy of community health centers has been based on reimbursement, and their marketing has focused on patients. The two areas have usually operated separately, with finance handling contracts and marketing handling communications. The exact relationship between marketing activities and those of the revenue department has never been investigated.
The upcoming environment closes that gap by force; once reimbursement becomes less structurally reliable, the organization's ability to manage the economic characteristics of its patient population and payer mix becomes a matter of survival rather than a strategic decision, and payer mix is, to some extent, a marketing issue.
All the outcomes—including the number of patients the health center manages and retains, the extent to which it offers its services, whether eligible patients remain insured or lose their coverage because of administrative problems, and whether privately insured patients in the area are aware of the organization as a care option—are influenced by the marketing decisions that are made or not made, funded or defunded, in the months before the policy environment changes.
When reimbursement is no longer reliable, marketing shifts from being primarily an awareness activity to becoming part of the organization's revenue-defense system.
A new question needs to be at the heart of marketing strategy. Today, most health centers ask: how can we get more patients? In the future environment, the more appropriate question will be: what kind of patient mix enables us to sustainably serve the greatest number of people? This represents a more advanced role for the marketing function and requires linking marketing decisions to financial results in a way that most health center marketing programs are not set up to achieve.
Four Revenue Resilience Responses
Payer-Mix Marketing involves creating patient acquisition and retention strategies based on the economic makeup of the patient panel, rather than relying on demographic characteristics or disease severity. It requires marketing to aim at four separate objectives simultaneously.
Preserve
Convert
Diversify
Retain
Preserve
It should be ensured that eligible patients do not lose their coverage due to administrative errors. The Medicaid unwinding showed how much coverage can be lost due to administrative friction rather than to people no longer being eligible. NACHC found that, on average, about 23 percent of Medicaid patients at CHCs had lost their coverage during the unwinding, and health centers afterward experienced financial losses and disruptions to care. The new work requirements will add another layer of communication that marketing can help with: sending renewal reminders, providing eligibility information in plain language, conducting SMS outreach, offering multilingual communications, supplying documentation checklists, and producing materials for use in the clinic. This is not traditional promotion; it is coverage-retention communication. The most cost-effective way to make up for lost reimbursement is to ensure that the reimbursement you would have lost doesn't disappear in the first place.
Convert
Assist uninsured patients who are eligible for Medicaid, Marketplace coverage, or other programs in obtaining coverage. When an uninsured patient's care is properly reimbursable, it constitutes both a success for the organization's mission and a source of revenue after enrollment. Marketing can help with eligibility screening, guide patients through the enrollment process, communicate with them about the Marketplace during open enrollment, and conduct targeted outreach to uninsured patients eligible for various programs. This is not equivalent to refusing care to uninsured patients; rather, it means ensuring that every patient who could be covered has a genuine chance of securing coverage.
Diversify
Wherever possible, and when capacity and the range of services allow, increase revenue from commercial and Medicare payers. According to the 2024 NACHC data, the number of patients receiving care at CHCs who were privately insured rose from about 2.1 million in 2005 to 7.1 million in 2024, with the 2024 growth driven by private insurance. This change shows the existence of a competitive market that is often underestimated. Many community health centers have assets that commercially insured patients value, such as same-day access, integrated behavioral health, dental care, pharmacy services, pediatrics, women's health, and multilingual care. However, most CHC marketing does not highlight these assets; instead, it focuses on affordability or on their status within the safety-net system. This kind of presentation attracts the kind of patients who need the organization. A diverse patient base also means reaching out to patients who can choose such care.
Retain
Reduce patient leakage and use any unused clinical capacity. A health center might invest heavily in acquiring patients, even though thousands of existing patients gradually withdraw because no one has planned follow-up interactions. Patients who are past due for preventive care, pediatric well-child visits, chronic disease follow-ups, dental recall appointments, and annual wellness visits represent existing relationships and revenue that vanish without active effort to maintain them. Empty appointment slots are temporary; the 2:00 PM slot from yesterday cannot be filled tomorrow. Retention strategies include CRM-led outreach, appointment reminder campaigns, and systematic re-engagement of lapsed patients; they also serve as revenue strategies.
The Most Counterintuitive Intervention: Preserve First
The four responses follow a specific order. In a financially strained health center, the natural reaction is to seek new patients, especially those with commercial insurance. However, the intervention that yields the greatest short-term return might be the least impressive: ensuring that eligible Medicaid patients do not lose their coverage due to administrative difficulties before the work requirements take effect.
For every eligible patient who maintains Medicaid coverage, both the patient's access to care and the organization's reimbursement are secured; this represents a two-way return on a relatively low-cost marketing effort involving outreach and plain-language communication. The case for active communication to retain Medicaid patients and preserve revenue should be clearly presented to the CFO, not just to the communications team.
The Uncomfortable Commercial Argument
The need to diversify involves challenging a common belief in the field of community health that the organization primarily serves patients with no other option, a belief that can be financially risky as the payment environment changes.
That assumption was never fully correct. Over the past two decades, the number of privately insured patients attending CHCs has steadily increased, with the fastest growth in 2024. The people living in the areas served by most CHCs are working families with employer-based insurance, employees of small businesses, Medicare recipients, and individuals who are locally insured and instead choose to receive their primary care at the health center. These patients may not view the health center as a care option and may consider it unsuitable for them.
Promoting the service by starting with affordability, a safety-net identity, and its mission reinforces that image, whereas promoting it by emphasizing quality, access, integrated services, and community presence can alter it.
Is not viable for community health centers to advertise solely to those who need their services; they must also target people who have the option to choose them.
It isn't a matter of mission versus profitability; it is a question of financial sustainability. The level of commercial business required to keep a health center financially viable enables the organization to care for the uninsured patients for whom it was established. To treat mission and commercial competitiveness as incompatible is to create a false dichotomy that will become increasingly costly to sustain in the coming financial environment.
Marketing the Economic Case to a Different Audience
Most health center marketing programs have not yet effectively reached the groups most concerned about revenue, namely funders, policymakers, and community partners. The economic case for community health centers is compelling. They care for one in every four Medicaid patients nationwide, even though they account for less than three percent of Medicaid spending. They are estimated to save about $1,400 per adult patient each year, and studies have found that mortality increases when community health centers close.
Each health center ought to have a local, tailored case—one that demonstrates a reduction in emergency room visits, prevents hospitalizations, supports economic activity, keeps jobs secure, provides maternal care, and ensures access to behavioral health services. This case should be included in grant applications, in dealings with local employers, in discussions with hospital systems and school districts, in advocacy before the board, and in community partnerships that help diversify the organization's reliance on any single reimbursement source.
In this situation, marketing is not focused on acquiring patients; rather, the organization's position within the economic and policy environment determines whether it will survive the coming years while maintaining its mission.
The Organizational Decision This Article Is Actually About
In the months leading up to January 2027, the leaders of community health centers will need to address the overhead-reduction question, with marketing as one of the discretionary expenses. The case for cutting it will appear financially responsible.
The reason for opposing the cut is not that marketing is too important to interfere with. Rather, in the future environment, the link between marketing and revenue will be direct rather than indirect, and reducing marketing at the very time when payer mix management is most important would be equivalent to cutting back on the sales function when the competitive environment becomes more intense.
Health centers that adopt a deliberate payer-mix strategy as they face the upcoming disruption, fund coverage-retention communications, conduct commercial outreach, and implement systematic patient-retention programs will cope with the shock differently from those that cut back on marketing and instead hope that clinical quality will speak for itself.
Clinical quality is of great importance; yet by itself it does not enable a center to retain Medicaid patients when their eligibility is being reviewed, nor does it reach commercially insured patients who have never before come into contact with the organization, nor does it fill the 2:00 PM slot that would otherwise leave the shift without a doctor.
Marketing cannot replace Medicaid, but it can determine whether the health center merely accepts the gap or actively manages the parts of its revenue system it can still influence. It is important to keep that distinction in the budget.
The fact that the revenue resilience gap is not primarily a marketing issue should be clear; it is a policy issue, and no matter how well the communication strategy is designed, it cannot bridge a funding gap of this scale.
However, the tendency to treat marketing as the first area to cut when an organization faces financial pressure leads people to confuse symptoms with the real causes and to remove one of the few remaining means available to the organization, even though much of the pressure is coming from outside. The health centers that understand the role marketing can and cannot play in such a situation and then provide the necessary funding will be the ones that emerge from the next two years having served their communities rather than harmed them.
Some ideas are worth discussing in the context of your organization.
