Safety nets face funding cuts

Community health centers lose $600 million in funding; expansion projects on hold

Stephanie Wiersma has been there before, having joined Lorain County Health & Dentistry – a federally qualified health center – as its first employee 10 years ago.

“Part of running a health center is getting comfortable with the unknowns, the uncertainties,” says Wiersma, who is director of the health center, which has two sites in Lorain, Ohio, about 30 miles west of Cleveland on Lake Erie. “You just have to do that.”

So when Congress decided to chop $600 million of funding for community health centers earlier this year, she was prepared, at least as much as anyone can be. “It’s still a little murky as to how the budget for community health centers will be adjusted for the remainder of 2011,” she says. “But absolutely, we expect to be affected.”

At press time, it seemed clear that Health Resources and Services Administration, the federal agency responsible for overseeing community health centers, would continue to provide funding for continuing operations. “That means that my health center, along with the 126 most recently funded centers, will continue to be funded,” says Wiersma. But expansion plans – such as those that Lorain County shared with a local hospital system and public housing authority – are on hold. Still, Wiersma is optimistic.

“We know the need [for care for the underserved]; we see the demand. We know our local community, and I’m sure it’s the same here as in hundreds of communities around the country. We made a case for the need [for community health center funding], and we submitted the application. And maybe, in the future, they’ll dust off those applications.”

Started in the 60s
First established in the 1960s, federally qualified health centers are community-based organizations that serve populations with limited access to healthcare. Roughly 1,200 centers, with some 8,000 care sites, provide medical, dental and behavioral healthcare, as well as access to pharmaceuticals.

Each community health center is on its own insofar as purchasing medical equipment and supplies. On its website, the National Association of Community Health Centers does offer its members a buyer’s guide from McKesson Medical-Surgical. But each center is free to join a group purchasing organization or pursue another direction for purchasing.

To receive federal funding, health centers must:

  • Be located in or serve a high-need community, that is, one that has been designated as medically underserved.
  • Be governed by a community board.
  • Provide comprehensive primary healthcare services, as well as supportive services, such as education, translation, transportation, etc.
  • Provide services to all, regardless of their ability to pay.

Approximately 70 percent of the 23 million patients visiting health centers are at or below 100 percent of the federal poverty level, and 93 percent are under 200 percent of the poverty level. Thirty-eight percent are uninsured, and 37 percent are on Medicaid. In 2009, health centers treated 865,000 migrant/seasonal farm worker patients and more than 1 million individuals experiencing homelessness.

With a staff of 47, Lorain County cares for 11,500 people, says Wiersma. Seventy-six percent of them are at or below 100 percent poverty level, and 88 percent are below 200 percent.

Funding questions
Community health centers enjoyed a surge of federal funding and growth during the Bush administration (2001-2009). That growth accelerated under the Obama administration, in response to the economic recession as well as healthcare reform.

The American Recovery and Reinvestment Act of 2009 – the “stimulus act” – injected $2 billion into the nation’s health centers for construction, renovation, the acquisition of equipment and health information technology, and simply to expand services to new and existing communities. Then the Patient Protection and Affordable Care Act of 2010 – the healthcare reform law – created an $11 billion trust fund to be spent over five years, $9.5 billion of which was to be spent on expanding operational capacity, and $1.5 billion in direct funding for capital. The intent was to double the number of patients served by community health centers, from 20 million to 40 million.

The cash was sorely needed, as state funding for community health centers had been dropping steadily. “I literally can tell you we could not have hung on much longer without the funding in March 2009,” says Wiersma. “We had done everything in our power to be as small as we could, and still be able to give care to patients, holding out hope we would get funding.

“We had increased the minimum fee we charged our uninsured; we had put a cap on the number of appointments we could schedule for uninsured medical and dental patients; we had consolidated in terms of space as much as we could to reduce our rent and overhead; and we were working with the world’s smallest management team.

“We were driven by the knowledge that what we were doing was important, and that we had to continue doing it. We expected funding would come; we hoped it would be in time; and we knew there is no other safety net provider in Lorain County with the capacity to care for medical and dental patients who are low-income, uninsured or otherwise underserved.”

But what the government giveth, the government can taketh away. In February of this year, the House of Representatives – worried about the federal debt – approved a $1.3 billion reduction in FY 2011 health center funding. The impact could have been catastrophic. “We would most likely have closed our doors,” says Wiersma.

As it turned out, in April, the White House and Congress worked out a budget deal, which resulted in the $600 million reduction in funding. While that left room for continuing operations of existing health centers, it put a kibosh on new construction or expansion.

Hospitals worried
The proposed $1.3 billion in cuts not only had community health centers worried, but nearby hospitals too, who feared an influx of primary care patients to their emergency departments. Those fears remain. “Sometimes it takes a good crisis to find out how needed you are and the important role you play,” says Wiersma. In fact, two CEOs from competing local hospital systems publicly expressed their objection to the proposed cuts.

“Health centers target underserved persons and are often the only local provider able to care for them in an appropriate and efficient setting, freeing up hospital capacity for true emergency needs,” wrote Dr. Donald Sheldon, president and CEO, EMH Healthcare in Elyria, Ohio (about 10 miles southeast of Lorain); and Edwin Oley, president and CEO, Mercy Regional Medical Center in Lorain.

In Ohio, almost $1 billion is spent annually on avoidable ER visits, they wrote. What’s more, studies have shown that Medicaid beneficiaries visiting community health centers were 19 percent less likely to use the ER for preventive conditions than other Medicaid beneficiaries, they said. “If avoidable visits to ERs were redirected to community health centers, the nation could save over $18 billion in annual health care costs.”

The hospital connection
One of the projects that fell victim to the $600 million funding cut was the plan by EMH, Lorain County Health & Dentistry and the Lorain Metropolitan Housing Authority to open two health center sites in Elyria – one within walking distance of EMH, and the other in a public housing complex.

There is precedent for locating community health centers near – or even inside – hospitals, says Douglas McDonald, MD, vice president of medical affairs, EMH Healthcare. “People still identify the hospital as a site for healthcare,” he says. In addition, when health centers are situated close to hospitals, they can potentially outsource some services to the acute-care facility, such as imaging or lab work.

Furthermore, such arrangements open the possibility for patients to get triaged in the hospital ER; if their condition is not urgent, they can go to the nearby health center for treatment. But such systems must conform to the Emergency Medical Treatment and Active Labor Act (EMTALA), also known as the patient anti-dumping law, McDonald points out.

“Much primary care is being delivered in the emergency room setting,” says McDonald. In many cases, the patients are insured through Medicaid, but have experienced difficulty finding a primary care doctor who will accept Medicaid reimbursement. Not only is delivering primary care in the ER unnecessarily expensive, but worse, it leaves the patient without a good plan for followup care, he says. The community health center can serve as a medical home for such patients, who will then use the ER only for true emergencies.

The second part of the Lorain County project would have converted an existing public-housing unit to a primary care site for adults and children. “That would further enhance [the concept of] bringing care to the back yard of the people who need it,” says McDonald.

Like Lorain County Health & Dentistry, Chicago Family Health Center has held discussions with a local hospital to open up a community health center near the hospital – in this case, actually inside the hospital. The project is on hold for now.

“We have to provide multiple points of entry into the healthcare system,” says CEO Warren Brodine. “There are some people who want to get their care in the hospital; this model would be very appealing to them.” At the same time, it would help reduce the high costs of ER care.

A medical home
Although community health centers’ expansion plans are on hold, leaders expect the centers to continue to play an important role in healthcare delivery, particularly as attitudes toward healthcare evolve.

In Ohio, for example, a newly created Office of Health Transformation has laid out nine guiding principles for healthcare in the future. Among them are:
Primary care. Transform primary care from a system that reacts after someone gets sick to a system that keeps people as healthy as possible.
Chronic disease. Prevent chronic disease whenever possible and, when it occurs, coordinate care to improve quality of life and help reduce chronic care costs.

“Ohio’s community health centers are really well positioned to serve as health homes,” says Wiersma. “We’re all looking forward to making a contribution. We have the infrastructure. It’s what we’ve been doing.”

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