In healthcare, CBO stands for community-based organization. These are local nonprofits and grassroots groups that address the non-medical factors shaping people’s health, things like housing, food access, transportation, and economic stability. They sit outside the traditional clinical system but increasingly partner with hospitals, insurers, and government programs to fill gaps that doctors and nurses can’t address in an exam room.
What Makes an Organization a CBO
A CBO is defined by its roots in the community it serves. The National Community-Based Organization Network, housed at the University of Michigan School of Public Health, adopted a formal definition: a community-based organization is one that is driven by community residents in all aspects of its existence. That means the majority of its governing body and staff are local residents, its offices are physically located in the community, and the issues it tackles are identified and defined by the people who live there. Solutions are developed with residents, not handed down from outside institutions.
This resident-driven structure is what separates CBOs from larger health systems or national nonprofits that may operate in a community without being of that community. A food pantry run by neighborhood volunteers, a housing advocacy group staffed by people who grew up in the area, a workforce development center in a low-income neighborhood: these are typical CBOs. They come in many forms. Research published in The Milbank Quarterly surveyed 46 CBOs working with healthcare systems and found they spanned housing (33%), community centers (17%), multiservice organizations (15%), food programs (13%), workforce development (11%), legal services, transportation, domestic violence services, and early childhood education.
Why Healthcare Systems Work With CBOs
The connection between CBOs and healthcare comes down to a simple reality: medical care accounts for only a fraction of what determines a person’s health. Where you live, what you eat, whether you can get to a doctor’s appointment, and whether you feel safe at home all shape health outcomes. These are often called the social determinants of health, and they’re the territory CBOs have worked in for decades.
Hospitals and health plans have become far more interested in these factors as the industry shifts toward value-based care, where providers are rewarded for keeping patients healthy rather than simply billing for each visit. Research shows that interventions providing housing, nutritional support, and transportation can improve health and, in some settings, reduce costs for providers and insurers. Some health systems have built in-house capabilities like on-site food pharmacies, but many partner with CBOs that already have the infrastructure, relationships, and expertise. One home-delivered meals program described its evolving role as integrating its service into healthcare payment and delivery models, shifting its metrics from pounds of food distributed to healthy meals served.
How Referrals Work Between Clinics and CBOs
The practical link between a doctor’s office and a CBO is the referral. When a care team screens a patient and identifies a social need, say housing instability or food insecurity, they refer that patient to a relevant CBO. This sounds simple, but coordinating it across dozens of organizations with different intake processes has been a major challenge.
Technology platforms have emerged to bridge this gap. Systems like Unite Us, Findhelp (formerly Aunt Bertha), WellSky, and Signify connect clinical providers with community resources through digital referral networks. Some function like search engines for social services, helping patients find nearby resources on their own. Others operate as closed-loop referral systems, meaning the referring clinic can track whether the patient actually connected with the CBO and whether their need was resolved. Health systems have generally prioritized this closed-loop approach because it integrates with electronic medical records and lets care teams follow up. CBOs, on the other hand, have pushed for using a single platform across multiple health systems so they aren’t juggling separate software for every hospital that sends them referrals.
The Centers for Medicare and Medicaid Services (CMS) has tested models to formalize this process. One case study from CMS describes a “bridge organization” that sits between health systems and CBOs, coordinating screenings, referrals, and navigation so patients don’t fall through the cracks.
Who Works at CBOs
The staff at healthcare-connected CBOs often include community health workers, a role the Bureau of Labor Statistics defines as professionals who coordinate care among individuals, communities, and health and social service systems. They oversee case management, help people access resources, and advocate for individuals around housing, food security, and other needs. They work closely with nurses, social workers, and mental health counselors.
Community health workers go by different titles depending on the population they serve. Community health representatives focus on increasing health knowledge and access to care in Tribal communities. Promotores de la salud reduce barriers to healthcare and social services in Spanish-speaking communities. Peer support specialists are people in recovery from mental health or substance use disorders who provide support to others going through similar experiences. This range of roles reflects the core philosophy of CBOs: the people doing the work come from and understand the communities they serve.
CBOs and Health Equity
CBOs play a particularly important role in reaching populations that distrust or face barriers to traditional healthcare. Research published in Community Health Equity Research & Policy found that CBOs with longstanding community relationships hold social capital that health systems simply don’t have. During COVID-19, this became starkly visible. Nearly 100 CBOs participating in one vaccination equity initiative worked to break down barriers by sharing accessible information, arranging transportation, and helping people with language barriers navigate the system. They succeeded largely because they were already trusted voices with deep knowledge of their communities.
Public health recommendations have increasingly called for health institutions to partner with CBOs and leaders from Black, Indigenous, and other communities of color to facilitate communication with populations that have historically been marginalized by the healthcare system. These partnerships work best when they’re genuinely mutual, not just health systems outsourcing outreach. CBO leaders have raised concerns about maintaining their professional obligations to clients when healthcare dollars start flowing in. For example, housing organizations have worried that hospitals might pressure them to prioritize high-cost patients over the broader community they serve.
How CBOs Get Paid
Funding has long been one of the biggest challenges for CBOs working in healthcare. Traditionally, social services and medical services occupied completely separate funding streams. That’s changing through several pathways.
Some states have used Medicaid waivers to reimburse CBOs for evidence-based health programs. Section 1915(c) waivers allow states to cover home and community-based services, while Section 1115 demonstration waivers give states flexibility to pilot new approaches. Washington state, for instance, used its 1115 waiver to partner CBOs with regional health collaboratives. New York used the same authority to fund its Delivery System Reform Incentive Payment program. Massachusetts allocated $150 million for a “flexible services” program allowing Medicaid dollars to pay for nutrition and housing interventions that had previously been outside Medicaid’s scope.
A limited number of Medicare Advantage plans have also begun covering CBO programs as plan benefits. And some CBOs are entering value-based payment arrangements with health plans, taking on shared financial risk. One area agency on aging in Massachusetts, for example, receives 50% payment when a patient enrolls in a six-week evidence-based program and the remaining 50% when the patient completes it. This structure ties CBO revenue directly to outcomes rather than just service delivery.
Impact on Hospital Readmissions
One of the clearest ways CBOs affect clinical outcomes is through reducing hospital readmissions. The Community-based Care Transitions Program, run by CMS, was designed around this exact goal. It paired community organizations with hospitals to support patients after discharge, helping them manage medications, attend follow-up appointments, and address social needs that might otherwise send them back to the emergency room. The program was part of the broader Partnership for Patients initiative, which set national targets of reducing preventable hospital errors by 40% and hospital readmissions by 20%. The logic is straightforward: a patient discharged to an unstable housing situation or without reliable access to food is far more likely to end up back in the hospital, regardless of the quality of their medical care.