Health centers play an important role in our health care system, providing comprehensive primary care services as well as dental, mental health, and addiction treatment services to over 25 million patients in medically underserved rural and urban areas throughout the country. Health care anchors in their communities and on the front lines of health care crises, including the opioid epidemic and the current flu outbreak, health centers rely on federal grant funds to support the care they provide, particularly to patients who lack insurance coverage. However, the Community Health Center Fund (CHCF), a key source of funding for community health centers, expired on September 30, 2017, and has since been extended through only March 31, 2018. The CHCF provides 70% of grant funding to health centers. With these funds at risk, health centers have taken or are considering taking a number of actions that will affect their capacity to provide care to their patients. This fact sheet presents preliminary findings on how health centers are responding to the funding uncertainty.
What Funding Is at Stake for Health Centers
The Community Health Center Fund represents 70% of federal grant funding for health centers. Established by the Affordable Care Act, the CHCF increased federal grant fund support for health centers, growing from $1 billion in 2011 to $3.6 billion in 2017.1 Authorized for five years beginning in 2010, and extended for two years through September 2017, the CHCF also provided a more stable source of grant funding for health centers that was separate from the annual appropriations process. Prior to the CHCF, federal 330 grant funds were appropriated annually. In fiscal year 2017, federal section 330 grant funding totaled $5.1 billion, $3.6 billion from the CHCF and $1.5 billion from the annual appropriation.
Federal health center grants represent nearly one-fifth of health center revenues. Federal Section 330 grant funds are the second largest source of revenues for health centers behind revenues from Medicaid. Overall, 19% of health center revenues (including US territories) come from federal grants; however, reliance on 330 grant funds varies across health centers. Federal grant funds are especially important for health centers in southern and rural non-expansion states where Medicaid accounts for a smaller share of revenue (Figure 1).2 These funds finance care for uninsured patients and support vital services, such as transportation and case management, that are not typically covered by insurance
Figure 1: Federal Section 330 Grants as a Share of Total Health Center Revenues, 2016
How Are Health Centers Responding to the Loss of Federal Funds?
Health centers have taken or are considering taking a number of actions that will affect their ability to serve their patients. Overall, seven in ten responding health centers indicated they had taken or planned to take action to put off large expenditures or curtail expenses in face of reduced revenue. Some of these actions involve delaying or canceling capital projects and other investments or tapping into reserve funds. Other actions, however, have or will reduce the number of staff or the hours they work, which may in turn, affect the availability of services. Already 20% of health centers reported instituting a hiring freeze and 4% have laid off staff. Another 45% are considering a hiring freeze and 53% said they might lay off staff. While health centers seemed to focus on shorter-term actions that could easily be reversed were funding to be restored, 3% of responding health centers had already taken steps to close one or more sites and an additional 36% indicated they are considering doing so (Figure 2).
Figure 2: Actions Taken or Considered by Health Centers in Response to Funding Uncertainty
Health centers are considering cuts to patient services. While most health centers have not yet taken steps to cut or reduce patient care services, many reported they are weighing such actions if funding is not restored (Figure 3). Over four in ten indicated they might eliminate or reduce some enabling services, such as case management, translation, or transportation services. Additionally, over a third of reporting health centers indicated they might have to reduce the dental, medical, and/or mental health services they provide while 29% said cuts to addiction treatment services are being contemplated. Fewer health centers reported that cuts to pharmacy services might be made.
Figure 3: Services Health Centers Are Considering Eliminating or Reducing in Response to Funding Uncertainty
What Are the Implications of the Funding Delay?
Continued delays in restoring funding will likely lead to cuts in health center services and staff. To date, health centers have tried to mitigate the effects of the funding delay by forgoing major investments or dipping into reserve funds. However, the longer the funding delay continues, the greater the likelihood health centers will be compelled to cut services and staff, actions they are currently considering but have not yet adopted in large numbers. These cuts could reverse gains health centers have made in recent years in increasing patient care capacity and expanding the range of services they provide, particularly in the areas of mental health and addiction treatment. Health centers play a particularly important role in rural and medically underserved areas. The failure to reauthorize the CHCF and restore health center funding could jeopardize access to care for millions of vulnerable patients.
This analysis is based on preliminary data from the 2018 Survey of Community Health Centers designed by George Washington University’s Geiger Gibson/RCHN Community Health Foundation Research Collaborative and the Kaiser Family Foundation.
Appendix Table 1: Health Center Delivery Sites, Patients, and Revenues, by State, 2016
State
Number of Health Centers
Number of Delivery Sites
Total Patients
Total Patient Visits
Total Revenues
Federal BHPC Funding as Share of Total Revenues
Alabama
14
128
347,694
1,084,685
$173,627,218
44%
Alaska*
28
183
113,027
545,430
$316,966,135
20%
Arizona*
21
159
548,487
2,080,644
$506,266,156
16%
Arkansas*
12
120
195,397
721,288
$157,423,550
30%
California*
176
1,529
4,438,827
20,078,878
$4,922,877,855
12%
Colorado*
20
202
594,959
2,446,065
$571,663,876
17%
Connecticut*
16
250
373,182
1,943,325
$376,031,580
14%
Delaware*
3
15
49,900
171,842
$37,114,507
35%
District of Columbia*
8
60
178,324
874,310
$239,842,150
10%
Florida
48
535
1,397,966
5,276,142
$1,033,408,471
21%
Georgia
35
225
457,644
1,437,176
$294,596,676
37%
Hawaii*
14
75
152,155
715,612
$181,561,177
15%
Idaho
14
87
171,126
658,290
$174,323,258
26%
Illinois*
45
402
1,265,889
4,665,853
$897,271,451
21%
Indiana*
25
183
473,237
1,675,508
$343,283,730
20%
Iowa*
14
72
188,969
680,595
$163,280,598
25%
Kansas
18
61
193,843
582,658
$123,037,617
29%
Kentucky*
23
232
423,515
1,609,691
$344,167,330
20%
Louisiana*
34
229
384,893
1,409,006
$288,753,388
31%
Maine
18
130
186,039
818,065
$179,110,303
23%
Maryland*
17
126
313,411
1,478,011
$370,440,582
14%
Massachusetts*
39
288
751,918
3,839,821
$1,044,753,296
11%
Michigan*
39
262
672,753
2,554,782
$580,783,107
21%
Minnesota*
16
77
174,811
675,680
$171,499,152
22%
Mississippi
21
203
295,052
887,060
$177,107,230
41%
Missouri
28
228
527,054
1,925,230
$431,807,263
23%
Montana*
17
79
106,342
407,084
$104,950,776
34%
Nebraska
7
48
84,556
296,136
$72,574,862
26%
Nevada*
5
35
88,962
275,210
$73,240,156
25%
New Hampshire*
11
42
89,280
380,772
$89,972,159
25%
New Jersey*
23
144
511,947
1,892,603
$330,427,532
24%
New Mexico*
17
195
320,163
1,482,714
$298,922,222
23%
New York*
65
654
2,038,538
9,468,465
$2,023,496,947
12%
North Carolina
38
229
508,599
1,771,333
$370,692,573
33%
North Dakota*
4
22
40,331
133,261
$35,312,258
29%
Ohio*
45
271
667,007
2,326,809
$465,135,801
29%
Oklahoma
20
98
200,937
699,203
$155,357,831
34%
Oregon*
31
212
383,691
1,723,557
$570,120,560
15%
Pennsylvania*
44
264
774,921
2,660,676
$588,427,739
19%
Rhode Island*
8
55
164,057
683,021
$162,316,505
16%
South Carolina
22
176
374,257
1,386,551
$349,309,120
23%
South Dakota
5
48
69,137
239,716
$55,349,502
35%
Tennessee
29
182
396,877
1,413,029
$244,800,059
32%
Texas
73
466
1,309,020
4,918,538
$1,100,636,445
22%
Utah
13
56
151,250
496,233
$125,521,294
28%
Vermont*
11
66
171,828
677,293
$147,117,961
14%
Virginia
26
145
304,756
1,093,227
$217,530,129
38%
Washington*
27
306
1,035,629
4,188,973
$1,084,448,992
12%
West Virginia*
27
301
430,084
1,682,705
$338,912,992
19%
Wisconsin
17
115
303,266
1,147,896
$296,292,458
14%
Wyoming
6
10
17,582
53,786
$17,277,753
44%
US Total
1,337
10,280
25,413,089
102,334,438
$23,419,142,282
18%1
NOTES: * Medicaid expansion state. 1 US Total excludes territories. SOURCE: GWU analysis of 2016 UDS data
Article source: https://www.kff.org/medicaid/fact-sheet/how-are-health-centers-responding-to-the-funding-delay/