Agency Progress Report: Where We Are and Where We Are Going
From COVID-19 to staff retention challenges and spiking inflation, a confluence of stressors has affected Howard Brown Health and many other nonprofit healthcare organizations in recent years.
I want to personally thank our patients, community members, staff, elected officials, donors, volunteers, supporters, and partners for championing our mission in support of LGBTQ+ health equity.
The purpose of this report is to share an update on the status of the organization and to show the progress we have made in our evolution as a Federally Qualified Health Center.
Early in fiscal year ‘22, which started July 1, 2022, permanent changes in pharmacy and federal COVID-19 funding caused a sudden reduction in revenue. Due to permanent changes in these funding streams, we identified a $12 million structural deficit threatening to destabilize the organization. To stem losses that could adversely affect patients’ health care, the Board of Directors, agency leaders, and I initiated plans to reduce administrative costs, lower executive pay, slow capital improvements, and consolidate staffing in administration, operations, behavioral health, and social services. This included the difficult but necessary decision to reduce our workforce.
Given the volatile national landscape LGBTQ+ people face, we know our work is more important than ever. We also know that we must continue to improve as an organization to meet the growing and changing needs of our patients and the communities we serve.
In the following sections, I share how we are improving our core operations and charting a future path to ensure sustainability for the organization. This includes maintaining and improving our current levels of fiscal prudence and preparing for the continued decrease of pharmacy revenue, which made Howard Brown’s growth over the last decade possible.
The report is organized in three sections: Stabilization, Continuous Improvement, and What’s Next.
Our commitment to affirming, lifesaving, and high-quality healthcare for LGBTQ+ people and others in the neighborhoods we serve is unwavering. With your support, we can help our patients achieve the highest level of health possible, a prerequisite to advance their goals and care for their families.
David Ernesto Munar
President and CEO
Howard Brown Health
Efforts to steady our finances are possible because of the dedicated efforts of staff members who extend high-quality and affirming healthcare to as many patients as possible. Efficient delivery of care reduces missed opportunities, maximizes the reach of scarce resources, and meets people where they are in their healthcare journey.
As the organization reduces its dependence on volatile pharmacy revenue, we will maximize funding through the efficient delivery of healthcare, philanthropy, and other opportunities. Guided by the needs of our loyal patients, we are focused on efforts to improve patients’ quality of care and their overall customer experience. The cultivation of a loyal patient base that benefits from efficient and effective care is paramount to fulfilling our mission. In doing so, we can also close the funding gap and secure the organization’s long-term sustainability.
The financial measures we instituted in late 2022 have prevented approximately $4 million in deficit spending as of March 31, 2023. March financials recorded the lowest monthly deficit in nine months: $640,000 in monthly expenses over revenue. With continued fiscal discipline, and support for efficient patient care across the agency, we hope to exit monthly deficit spending by summer.
Early in fiscal year ‘22, which started July 1, 2022, permanent changes in pharmacy and federal COVID-19 funding caused a sudden reduction in revenue. Pharmacy revenue, which has driven Howard Brown’s growth over the last decade, is a volatile and complex revenue source that is subject to manufacturer-led changes, legislative oversight, and judicial rulings. The impact of these shifts over the last year, as well as certain brand name pharmaceuticals going generic, led to a drastic change in the agency’s ability to use pharmacy revenue as a reliable revenue stream.
Initially, the agency saw the beginning of this trend in the last quarter of the previous fiscal year that ended June 30, 2022. Executive leadership and the Board addressed this by taking initial cost-saving measures including the elimination of several service contracts in July 2022. Notwithstanding, the audit documents an $2.7 million operating loss for the fiscal year, the first such decline in nearly a decade.
Over the summer and fall in 2022, the pharmacy program continued to change swiftly, producing a monthly operating deficit of greater than $1 million per month. If actions were not taken by December 2022, the agency would incur more than $12 million in deficit by the close of the fiscal year, a potentially destabilizing change in revenue.
At the same time as the financial deficit was identified, Howard Brown’s non-management workforce elected to unionize. The new bargaining unit, which consists of over 360 non-management personnel, encompasses staff from every aspect of Howard Brown from clinical staff and providers to administrative workers to retail staff in the agency’s Brown Elephant thrift stores. Staff are represented by the Illinois Nurses Association (INA), which has represented Howard Brown’s registered nurses, a unit of 35 members, since 2017.
Following two years of complex public health emergencies, of which the agency needed to pivot frequently to lead, the identified financial challenges deeply strained relations between management and members of the workforce, the majority of whom are represented by the new bargaining unit.
Planning for urgent cost-savings strained programs and staff at all levels of the organization. Howard Brown sought counsel from other federally qualified health centers that had faced similar challenges. With guidance from these center, Howard Brown crafted a plan that included cost-savings and revenue generating measures. Cost-saving measures included reductions in administrative expenses, reductions in outside vendors, decreased executive pay, delayed and eliminated capital improvements, and consolidating staffing units, including union and non-union workforce reductions.
In November, leadership presented proposals to the new union to close the funding gap including a voluntary separation program, which the union declined to consider.
When formal negotiations stalled at the end of the calendar year, the organization proceeded in implementing our last, best, and final proposal in accordance with federal labor law. The plan reduced the size of our workforce from over 700 to approximately 600 employees with nearly proportional reductions in union-represented and non-union roles (Howard Brown Health Announces Cost-Saving Measures to Address FY23 Revenue Shortfall, 2 Jan 2023). In protest and within their rights as a recognized bargaining unit, the INA implemented a three-day strike.
As shared above, the cultivation of a loyal patient base is the organization’s best path to fulfill our mission and serve Chicago’s most marginalized communities. Howard Brown believes that every person deserves an opportunity for healthcare.
To support our brand of affirming and inclusive healthcare with sustainable revenue, Howard Brown is working closely with two experts in community health operations. FORVIS, one of the largest U.S. accounting and advisory firms, and Coleman Associates, a firm supporting the implementation of operational excellence in alignment with government standards for community health centers, are helping us improve our care delivery systems for high performance.
Through partnership with these organizations, Howard Brown has benchmarked its operational measures against national averages for community health centers with similar patient demographics, revenue mixes, and healthcare needs. These averages have helped the agency set realistic and achievable objectives for revenue generation, which are detailed below in Continuous Improvement: Organizational Effectiveness. The partnerships also include participation in a national cohort of other community health leaders, many who are working through similar goals of cost-effectively improving their patients’ care experience and enhancing health outcomes.
Across Howard Brown, we are pursuing process improvements to strengthen our ability to serve patients. The strategic initiatives we are pursuing this year are anchored in the following priorities:
- Safeguard and improve the organization’s ability to deliver effective and efficient patient care.
- Provide patients an excellent customer experience that results in improved health outcomes.
- Improve the workplace experience of our employees with enhanced learning, communications, and input mechanisms that fully utilize workforce talents, perspectives, and contributions.
- Build a stronger working relationship with our employees’ union, including achievement of a first-time contract for the broader bargaining unit formed in 2022.
Guided by these objectives, teams across the organization are pursuing reorganization and improvement plans to meet the Centers for Medicare and Medicaid’s triple aim: deliver exceptional patient care at the lowest cost to realize the greatest possible gains in community health.
Highlighted intiatives include:
Commitment to our Values
The agency is committed to shaping its culture through our shared values:
- Creativity – fostering a forward-thinking, innovative, and fulfilling environment
- Advocacy – championing the healthcare needs of our community through responsive, patient-focused iniatives
- Teamwork – working together with utmost respect, appreciation, and accountability
- Excellence – striving for the best with the highest level of professionalism, leadership, ethical standards, and open communication
Shared values offer our teams a foundation and guiding principles for decision-making, actions, and belonging.
Commitment to our Union-Represented Staff
Howard Brown respects the rights of employees to organize and elect union representation. Union representatives and Howard Brown remain committed to the achievement of a first-time contract for this bargaining unit, meeting at least four times a month for contract negotiations.
Howard Brown is also deeply committed to navigating collective bargaining and labor relations in a manner that heals and builds the relationships.
With two-thirds of employees represented by the INA, Howard Brown is adapting our processes to elicit input from the union on matters big and small. Indeed, reaching financial stability safeguards not only the organization’s commitments to our tens of thousands of patients, but makes greater security possible for our talented and dedicated workforce.
Efforts to enhance relations with employees include:
- Continuing good-faith negotiations to achieve a mutually developed collective bargaining agreement for union-represented staff members.
- Committing to enhanced training and education for managers and employees so they may excel in their roles.
- Strengthening teamwork at each location to enhance the coordination of patient-centered practices.
- Leading with respect, humility, and transparency around our collective commitment to the LGBTQ+ community and health equity.
Commitment to our Patients
A loyal patient base is the organization’s best path to meeting its mission and ensuring financial sustainability. Because Howard Brown believes every person deserves an opportunity for healthcare, and to encourage excellent patient care, Howard Brown launched a patient satisfaction bonus program in July 2022.
Under the patient satisfaction program, each clinic has an assigned goal. Staff teams that meet or exceed their clinic’s six-month patient satisfaction goals—via post-visit scores assigned by patients—may qualify for a 3% bonus for the six cumulative months of work. Staff at two clinics, Howard Brown Diversey and Howard Brown Thresholds South, met their July to December increased patient satisfaction targets, earning the teams the 6-month incentive bonus.
For the current period of evaluation, January to June 2023, a majority of the 11 clinics have marked improvements in their patients’ satisfaction scores to date. Results will be available in July. The program is just one of the ways Howard Brown is seeking to align incentives to the needs of patients.
In late 2022, the organization upgraded to a state-of-the-art electronic medical record system, Epic. The new platform offers powerful analytics to help streamline and improve care delivery.
For patients, the system integrates seamlessly with most hospital record systems. The system’s patient portal, called MyChart, offers an array of options for patients to schedule and pre-register for appointments, join a same-day waitlist, communicate with their care team, securely review lab results, visit notes, and prescribed medications, and much more. Though Howard Brown upgraded the patient portal just 7 months ago, a record number of patients (75%) have enrolled in MyChart, demonstrating our patient’s receptiveness to self-service solutions for their healthcare.
Moving forward, we will continue to find ways to use the full potential of the system to improve patient experience and streamline care delivery. In the months ahead, Howard Brown will begin offering electronic visit registration on tablets in addition to the pre-registration option offered on the MyChart app.
Over the last year, Howard Brown has updated how we support some administrative functions, COVID-related activities, behavioral health, and social services. Each re-design seeks to achieve maximum patient and community benefit.
In behavioral health and social services, we consolidated programs and created interdisciplinary staff teams at each clinic to support their medical counterparts in meeting patients’ multiple needs. At our four largest clinics in Englewood, Hyde Park, Rogers Park, and Uptown, dedicated community and social health teams—comprised 12-30 social workers—help patients navigate benefits enrollment, seek housing assistance, and access specialty referrals, among other strategies to reduce barriers to care.
With more than 40% of patients living at or below 100% of the federal poverty (for a single person in the continental United States, the 2022 federal poverty level is $13,590), these supports are essential. To help address patients’ unmet needs, beyond what we can provide, teams connect patients with other partner organizations delivering essential shelter, violence survival services, food security, legal, and other forms of assistance.
At Howard Brown, no one is turned away for inability to pay.
As an FQHC, we exist to deliver affirming and culturally competent care to all who seek it. We specialize in services designed to meet the unique healthcare needs of the LGBTQ+ community, but we are invested in improving the lives of all Chicagoans who face barriers to respectful, affordable care.
To advance this mission, our staff are working hard to meet our patients where they are and provide care in the way that is most accessible to them. For those who need same-day access to screenings and vaccinations without an appointment, we operate four walk-in sexual health clinics across the city, including the Broadway Youth Center catering to patients ages 24 and younger. For those who struggle to find available appointments to meet their needs, we are taking steps to reduce wait times at all of our clinics. And for those who deserve competent care but can’t find the time or transportation to get to our clinics, we offer telehealth appointments with more than a dozen of our medical and behavioral providers.
Thinking ahead is crucial. By weighing potential outcomes and consequences, we aim to make informed, proactive decisions. As we move forward we want to identify potential challenges, risks, and opportunities, so that we can strategize and adapt accordingly. We aim to mitigate risks, minimize surprises, and maximize our chances of success so that we can grow to serve our city with confidence and resilience, ensuring that we are better equipped to shape the future of LGBTQ+ care in Chicago.
For nearly 50 years, Howard Brown has built a patient base out of its North Side clinics, drawing patients from every Zip code across the city. In September 2023, the organization will gain occupancy of a new facility on Northalsted designed to dramatically expand patient access to care.
With three times the space as the clinic it will replace, the future home of the new Halsted clinic will offer two floors of primary medical care, a dedicated floor for dentistry (the organization’s first northside dental clinic), on-site pharmacy, walk-in laboratory services, and more. The new center is designed to integrate behavioral health and social services as part of the comprehensive services offered to patients. Construction of the facility caps more than seven years of planning to decongest crowding at the organization’s northside clinics where patient demand has built over the past five decades.
Funding for the new facility came from capital reserves, state and federal grants, lending, and philanthropy from individual, corporate, and foundation donors. We will continue capital fundraising throughout the year to put the new clinic on sound financial footing. When fully operational, the clinic is expected to serve as many as 20,000 patients per year.
Opening the new locations with an efficient model of care will help Howard Brown reach more patients. In doing so, the facility will help generate additional visit revenue to help achieve the organization’s mission and goals.
Since 2017, Howard Brown is proud to have established four vital clinics and a mobile health program to meet the diverse needs of patients in the Southside. Though we started work in the region with a single exam room just seven years ago, Howard Brown has grown dramatically to more than 25,000 square feet across our Canaryville, Englewood, and Hyde Park locations in response to community need. In total, our 150 staff members serve more than 15,000 patients through the following services:
- Clinical trials
- Community and Social Health
- Mobile Health
- Preventive Medicine
- Primary Medical Care
- Transgender & Non-Binary Care
- Walk-in Sexual Health
The 2021 Strategic Plan, Centering Community Care, advances a vision of continued community development and health equity investment on the Southside to better address LGBTQ+ healthcare needs, among other pressing priorities for the region.
As Howard Brown marks 50 years of service in 2024, we seek to strengthen our finances, staffing relations, and operational resilience to mature and improve our network of care. We aspire to build on the southside what we have accomplished on the northside: a network of partners and alliances helping to meet the health equity needs of the region’s LGBTQ+ community.
We will continue to rely on our dedicated staff on the Southside and other vital partnerships to uplift long neglected neighborhoods with affirming, non-judgmental, and culturally competent care for all who seek it.