Understanding the Socioeconomic Impact of Utilizing Federally Qualified Health Centers as a

Strategy to Generate Donor Interest

Sabrina L. MatsonMPA Program

Seattle UniversityInstitute of Public Service

Problem Statement:

When Congress passed health reform through the Affordable Care Act (ACA), they recognized the need for enhanced access to primary care. In particular, 32 million currently uninsured individuals will gain coverage through Medicaid and private insurance expansions starting in 2014. Yet today’s 50 million uninsured through Medicaid as well as millions who currently have no insurance, need access to primary care today.

Healthcare Reform such as the Affordable Care Act and Obama Care has changed the way Community Health Centers (CHCs) do business today. Although these changes have been positive in nature, there is still a need for additional programs, services, new and upgraded facilities to sustain the anticipated growth of Medicaid which is expected to double by 2014

Issue At Hand:

Because there is only so much federal and state funding to go around, the need to look at creative ways to offset the funding gap is essential to maintaining the socioeconomic benefits CHCs currently have in the communities they serve.

One creative way is to examine how CHCs can utilize their Board of Directors to seek increased private funding from donors who have an ability to give at the 100k level or higher.

A functional tool would be to provide a case statement that illustrates the socioeconomic impact CHCs have on the communities they serve as a strategy that sparks donor interests.

Background on Community Health Centers

• Founded in the mid 1960’s by the Office of Economic Opportunity as part of President Lyndon B. Johnson’s War on Poverty.

• Based on the model of community-oriented primary care developed by Sidney and Emily Kark¹.

• They have reintegrated the tradition between public health and personal health services by defining health broadly and providing preventative, environmental, and outreach services and medical treatment at one facility²₍ᵨ⁵₂⁾

• They can receive the designation of “federally qualified health center” from the Health Resource and Services Administration (HRSA), a division of the Department of Health and Human Services.

1. Kark SL., Kark E. An alternative strategy in community health care: community-oriented primary health care. Isr J Med Sci. 1983;19(8):707-13. 2.Sardell A. The U.S. experiment in social medicine: the community health center program, 1965-1986. Pittsburgh (PA): University of Pittsburgh Press; 1988.

Health Centers Serve: Socioeconomic demographics

• 1 in 7 Medicaid beneficiaries

• 1 in 7 uninsured persons including: • 1 in 5 low income, uninsured • 1 in 3 individuals below poverty • 1 in 3 minority individuals below poverty • 1 in 3 children below poverty • 1 in 7 rural Americans

• Source: NACHC, 2013. Includes patients of federally-funded health centers, non-federally funded health centers, and expected patient growth for 2013.

The Role CHC’s play in Their Communities:

• Clinical Care Providers – provide vital clinical support for low income communities. Access to primary and preventive care is pivotal to the educational and economic success of low income families.

• Business Development Drivers – In 2009 CHC’s generated more than $11 billion in total revenue and approximately $20 billion in direct and indirect economic activity in their local communities nation wide. They also produced more than 189,000 jobs in some of the country’s most economically deprived neighborhoods. The National Association of Community Health Centers estimates that every $1 million in federal funding for centers’ operations yields $1.73 million in return¹.

• Community Development Catalyst– CHC’c have addressed the upstream causes of poor health through a variety of community programs in partnership with others, that connect patients to resources and assistance. These programs address the social detriments of health by promoting individual and community health through broader lifestyle, education, and environmental interventions.

1. National Association of Community Health Centers. Community health centers: the local prescription for better quality and lower costs [Internet]. Bethesda (MD): NACHC; 2011 Mar [cited 2011 Oct 21]. Available from: http://www.nachc.com/client/A%20Local1%20Prescription%20Final%20brief%203%2022%2011.pdf

The Health Care Model: Operate under the direction of patient-majority governing boards.

Their unique delivery model utilizes multiple health professionals with varied skills to increase capacity, reduce barriers, and thereby amplify access to essential, comprehensive primary care in their communities.

They offer services not typically furnished in other primary care settings, such as dental, behavioral health, pharmacy, case management, interpretation, and home visits.

Compared to other providers, HCs disproportionately serve more chronically ill, uninsured, publicly insured, and minority patients as well as those in poor health.

CHs are increasingly using NPs, PAs, and CNMs in the provision of primary and preventative care. As a result, they employ on average more NP/PA/CNMs than any other primary care practices.

***A new and logical model in progression but not yet represented in public policy, is the community-centered health home, which extends the patient-centered medical home concept to the community level. ---birthed out of the Wagner Chronic Care Model

The Affordable Care Act and Health Centers: Today, approximately 1,200 health centers operate nearly 9,000 service delivery sites that provide care to

more than 21 million patients in every U.S State, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, and the Pacific Basin.

Increased the total number of patients served on an annual basis by 4 million people, increasing the number of patients served from 17.1 million to 21.1 million annually.

Health centers have also added more than 35,000 new full-time positions, increasing their employment from 113,000 to more than 148,000 staff nationwide.

ACA Programs: Health Center Controlled Networks, awarded $21 million to 43 network organizations to support the adoption

of electronic health records and the use of information technology to improve quality in health centers. They served 10 Health Center Program grantees, supporting 700 HCs nationwide.

Health Center Outreach and Enrollment Assistance: awarded $150 million in July 2013 to 1,159 HCs to support outreach and enrollment activities nationwide.

Health Center New Access Points: awarded $19 million to establish 32 new health center access points. Health Center Base Adjustments: awarded $48 million to 1,193 existing HCs nationwide to support ongoing

operations and quality improvement activities. School Based Health Center Capital Program (SBHCC), awarded $200 million to 470 school-based HC

programs to address significant capital needs to improve delivery and support expansion of services to school-based health centers.

State Funding to Health Centers, FY12

A total of $335 million for FY12 with reduced funds to 20 states and “no” funding to 15 states.

$60 million, or 15% less than reported in FY11.

State funding for health centers has been steadily declining for the fourth year in a row and FY12 represents a seven year low at a time of significantly rising needs. FY12 Funding:

• Decreased in 20 states (AK,CO,DE,FL,HI,IN,IA,KS,MI,MN,MO,NE,NH,NY,OK,PA,UT,WA,WV,WI) • Remained level in 8 states (IL,MA,MS,NC,OH,RI,TN,VA,)

• No funding in 14 states and the District of Colombia (AL, AZ,CA,D.C.,ID,KY,LA,ME,MT,NV,ND,OR,PR,SC,SD) (Pending: CT and TX)

Source: NACHC, Calculating the Cost: State Budgets and Community Health Centers Policy Report 39, November 2011, www.nachc.com

Cost Savings:

Several research studies demonstrate that health centers yield substantial cost savings to the health care system by reducing emergency department visits, hospitalizations, and other avoidable, costly care. A new study from the George Washington University finds that the expansion of health centers will contribute to even higher savings. (Ku, 2010).

Up to $122 billion in total health costs would be saved between 2010 and 2015.

Health Centers would save as much as $55 billion for Medicaid over the five-year period. Of that, the federal government would save $32 billion, with states benefiting from the rest.

Health centers’ average cost runs a dollar less per patient per day compared to all physician settings ($1.67 vs. $2.64).

Health centers save the health care system over $24 billion annually. This includes $ 6 billion in savings to the Medicaid program

Ku., L., Richard, P., Dor, A., Strengthening Primary Care to Bend The Cost Curve: The Expansion of Community Health Centers the Health Reform. Policy Research Brief No. 19. Geiger Gibson/RCHN Community Health Foundation Collaborative at the George Washington University. June 30 2010. $6 billion in Medicaid savings comes from an additional analysis by authors at the request of NACHC that takes the same methodology to produce the Medicaid savings as outlined in the report.

Economic Impact:

Investments in health centers have produced an economic “ripple effect” in their communities, creating jobs and fueling additional economic activity through the purchase of goods and services from local businesses. In 2009, a federal investment of $2.2 billion generated $20 billion in total economic benefits in resource-poor rural and urban communities. (The importance of Community Health Centers: Engines of Economic Activity and Job Creation, 2010).

CHCs generated $20 billion in economic activity in low income communities during 2009 and are expected to generate $53.9 billion by year 2015.

They produced more than 189,000 jobs in some of the country’s most economically deprived neighborhoods. By 2015, HCs will have created 284,323 additional full-time jobs.

CHCs are an integral source of local employment and economic growth, employing more than 148,000 individuals nationwide, of which 35,000 jobs have been added over the last 4 yrs.

CHCs employ more than 10,000 physicians and more than 7,500 NPs, PAs, and CNM in a multi-disciplinary workforce.

The National Association of Community Health Centers estimates that every $1 million in federal funding for centers’ operations yields $1.73 million in return. (NACHC, 2011)

Large urban health center generates a total economic impact of $21.6 million for its local community, while the average small rural health center generates about $3.9 million.

Large Urban Health Center Small Rural Health Center

Economic Impact (F/T Equivalents) Economic Impact (F/T Equivalents) Direct $ 12,252,801 187 $ 3,333,321 45 Indirect $ 2,273,314 24 $ 261,600 3 Induced $ 7,114,112 70 $ 287,124 4

Total $ 21,640,227 281 $ 3,882,045 52

Health Centers Save $1,263 Per Patient Per Year:

Health Center Users $4,043Non-Health Center Users $5,306Savings $1,263

This includes; Hospital Emergency Department, Hospital Inpatient, Ambulatory, Other Services

Hospital Inpatient $41.36Hospital Outpatient $7.59Emergency Room $3.64All Physician Settings $2.64Health Center $1.67

(Source: NACHC analysis based on Ku L et al. Using Primary Care to Bend the Curve: Estimating the Impact of a Health Center Expansion on Health Care Costs. GWU Department of Health Policy. Policy Research Brief No. 14. September 2009.)

HEALTH CENTER ECONOMIC IMPACT BY STATE, 2009

Alabama $ 194,609,172 Kentucky $ 228,231,869 North Dakota

$ 21,923,285

Alaska $ 209,528,820 Louisiana $169,256,482 Ohio $347,083,172 Arizona $436,393,978 Maine $172,912,011 Oklahoma $112,356,701 Arkansas $107,631,335 Maryland $345,217,498 Oregon $470,409,290 California $3,434,654,244 Massachuse tts $1,096,120,443 Pennsylvania $544,215,885 Colorado $579,408,724 Michigan $ 566,912,895 Rhode Island $130,325,455 Connecticut $385,499,939 Minnesota $214,818,705 South

Carolina $272,548,491

Delaware $37,343,728 Missippi $197,819,426 South Dakota

$46,549,870

District of Columbia

$140,081,354 Missouri $422,506,377 Tennessee $278,364,074

Florida $877,608,818 Montana $73,144,140 Texas $949,460,539 Georgia $245,580,795 Nebraska $58,310,063 Utah $106,489,982 Hawaii $180,088,619 Nevada $59,248,521 Vermont $104,009,011 Idaho $97,513,475 New

Hampshire $77,280,715 Virginia $220,404,799

Illinois $1,082,732,035 New Jersey $382,432,656 Washington $934,705,298 Iowa $132,659,924 New Mexico $295,497,470 West

Virginia $308,218,227

Kansas $ 87,455,193 New York $1,269,493,264 Wisconsin $379,544,478 North Carolina $331,842,618 Wyoming $21,280,348

United States

$

19,669,972,831

Source: NACHC & Capital Link, Community Health Centers Lead the Primary Care Revolution, 2010. For

more detailed explanation of methodology, see Appendix B in NACHC, Access Granted: The Primary

The Health Center Payoff

The Health Centers Program is a proven solution for a nation searching for better returns in health care delivery.

With Continued Investment through 2015, health centers will:

Double the number of patients served, reaching 40 million.

Nearly triple the savings they bring to the entire health care system, attaining $63 billion in savings annually

Accumulate two and half times the amount of economic growth, yielding $54 billion in economic gains for low-income communities.

Measurements that correlate directly with the impact CHC’s have in our communities:

• Reduced ER visits with a US cost savings of $18,445,991,718• Fewer hospital visits and long term stays, better care and lower costs• Improved birth outcomes, fewer infant mortalities• Avoidable hospital and specialty care, doing preventative work upfront• Preventive measures toward diabetes, reduces or eliminates long term affects.• New programs being implemented, (ex) Wagner Chronic Care Model• Federal programs , (ex) Affordable Care Act, American Recovery and

Reinvestment Act, and Project Access (formerly King County Project Access)• Collaborative Partnerships - Global to Local and Valley Cities Counseling and

Consultation

Health Centers Have Higher Rates of Accepting New Patients Regardless of Insurance Coverage Compared to Other Primary Care Providers:

New Patients HC 98% vs. PCP 93%New Medicaid Patients HC 97% vs. PCP 66%New Medicare Patients HC 96% vs. PCP 76%New Uninsured HC 97% vs. PCP 89%(Source: Hing E, Hooker RS, Ashman JJ. Primary Health Care in Community Health Centers and Comparison with Office-Based Practice. J Community Health. 2010 Nov 3 e-published.)

CHC patients continues to grow….96% growth since 2001 from 10.2 million to 20.1 million (Source: Federally-funded health centers only. 2001-2011 Uniform Data System, Bureau of Primary Health Care, HRSA, DHHS)

Number of health center patient visits continues to grow…99% since 2001 from 40.3 million to 80.0 million.(Source: Federally-funded health centers only. 2001-2011 Uniform Data System, Bureau of Primary Health Care, HRSA, DHHS)

Health Centers Provide More Preventive Services than Other Primary Care Providers:

HCP OPCPHealth Education 51% 37%

Immunizations for 65 years and Older 70% 65%

Pap Smears in least 3 years 85% 81%

Tobacco Cessation Education forSmoking Patients 33% 19%

Asthma Education for AsthmaticPatients 24% 15%

Source: Shi L, Tsai J, Higgins PC, Lebrun La. (2009). Racial/ethnic and socioeconomic disparities in access to care and quality of care for US health center patients compared with non-health center patients. J Ambul Care Manage 32(4): 342 – 50. Shi L, Leburn L, Tsai J and Zhu J. Characteristics of Ambulatory Care Patients and Services: A Comparison of Community Health Centers and Physicians' Offices J Health Care for Poor and Underserved 21 (4): 1169-83. Hing E, Hooker RS, Ashman JJ. (2010) Primary Health Care in Community Health Centers and Comparison with Office-Based Practice. J Community Health. 2011 Jun; 36(3): 406 – 13.

Health Centers Need Between 47,801 and 54,488 Primary Care Providers to Reach 30 Million Patients • Nurse Practitioners, Physician Assistants, Certified Nurse Midwives. Source: NACHC, Robert Graham Center, and The George Washington University School of Public Health and Health Services, Access Transformed: Building A Primary Care Workforce For The 21st Century, August 2008, www.nachc.com/research. Baseline is 2006.

Health Centers Are Not Present in at Least a Quarter of the Counties with Unfavorable Primary Care Needs

Source: NACHC, Health Wanted 2012. NACHC analysis of data obtained from University of Wisconsin Population Health Institute County Health Rankings 2011; U.S. Census Bureau; and HRSA.

60 Million People Are Medically Disenfranchised

Source: The Robert Graham Center and NACHC, Access Granted and Primary Care Access Health Services and Resource Administration (HPSA, MUA/MUP data, 2005 Uniform Data System), 2006 AMA Masterfile, Census Bureau 2005 population estimates, NACHC 2006 survey of non-federally funded health centers

Health Center Federal Grants Are Not Increasing at the Same Rate as the Cost of Caring for the Uninsured over the Last Six Years:

Federal Grant as % Uninsured Health Center Patient Costs2006 50%2011 48%

# Of Uninsured Health Center Patients (in millions)2006 6.02011 7.4

Source: NACHC 2011. Based on 2006-2011 Uniform Data Systems, Bureau of Primary Care, HRSA, DHHS.

More than a Third of Health Centers Need to Build or Purchase Additional Facilities, 2008-2015

• Bldg./Purchase/Replacement Facility 36%• Bldg./Purchase Additional Facility 37%• Other Major Capital Projects (Inc. HIT) 10%• Equipment 8%• Renovation Facility 4%• Expand Facility 5%

Total: $10.5 billion

Source: NACHC, Community Health Ventures, and Capital Link, Access Capital: New Opportunities for Meeting America’s Primary Care Infrastructure Needs, March 2008, www.nachc.com/research.

Recommendations:

Examine how CHCs can utilize their Board of Directors to seek increased private funding from donors who have an ability to give at the 100k level or higher.

Then recommend to the CHC staff to write a case statement that illustrates the socioeconomic impact their CHC has on the community it serves as a marketing piece that can encourage donor interests as well as be used for publication, Capital Campaigns, Major Gifts Campaigns, for Development Staff, etc.

Additionally, encouraging CHCs to develop both an endowment as well as a Foundation as a way to secure additional, tax free funds should they be needed when unanticipated growth is prevalent.

Conclusion:Health centers will remain an important investment in caring for millions of Americans who remain uninsured in the wake of health reform, either because they do not qualify for assistance or do not have access to affordable coverage.

It is important to recognize that each and every health center in the United States today was founded by its local community to meet unique local health problems.

Because of their success in delivering high-quality, cost-effective care, the Health Centers Program was rated one of the most effective federal programs by the Office of Management and Budget (OMB, Program Assessment Rating Tool, 2007).

The expansion of health centers will magnify their contributions to improved access and community health, all the while generating significant local, state, and national economic returns.

Research demonstrates that health centers deliver a significant return on investment in terms of system wide savings, economic benefits, and health improvements.

As health centers expand to each new patients with unmet health care needs, the value they bring to communities and payers will grow.