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Will Community Health Centers Survive Budget Cuts?

This year, more than half of the states decreased or eliminated funding for health centers, which provide an alternative to costly emergency rooms.

Of the nearly 50 million Americans without health insurance, 56 percent are African Americans living in underserved areas. Community health centers are one way -- and sometimes the only way -- to provide primary health-care service to these populations. These centers help keep patients out of the emergency room -- a cornerstone of cost reduction and a critical element of health-care reform. Just ask Dr. Herbert Smitherman.

Smitherman, assistant dean of community and urban health at the Wayne State University School of Medicine in Detroit, is also president of a local community health center. He spearheaded the Voices of Detroit Initiative, a project that helped move more than half of 33,000 uninsured patients away from the ER (and its average price tag of about $1,000 per visit) and into primary care (at just $30 a visit).

“We proved that if you expand access and direct it into primary care, it actually decreases costs,” Smitherman says. “I hear people talk about spending more money to cover the uninsured, but that’s only true if you don’t change the delivery system. If you focus on access to primary care, it’s not true.”

Indeed, the Affordable Care Act (ACA) has appropriated $11 billion over the next five years to fund the operation and expansion of more than 1,100 health centers that serve more than 8,000 communities across the nation. Of that $11 billion, $9.5 billion was targeted to create new health center sites in medically underserved areas, and expand preventive and primary health-care services at existing health center sites. The additional $1.5 billion will support major construction and renovation projects at existing centers.

The ACA also authorizes a new Teaching Health Center program, which provides payments to eligible health centers to cover training of primary-care physicians -- who are in woefully short supply nationwide. That’s also critical for managing costs, according to Smitherman. “Massachusetts’ health-care costs went up because it didn’t expand primary care,” he says. “You can’t just give people an insurance card; you have to give them somewhere to go besides the ER.”

But budget cuts last year took $600 million out of the pot, and future cuts threaten to do the same. How will health centers, which expect to see patient rolls skyrocket from the 23 million now treated to more than 40 million in the next five years, handle the task?

Pretty much the same way they have been dealing with state budget cuts over the past few years, says Amy Simmons, director of communications for the National Association of Community Health Centers. In fiscal year 2011, 23 states decreased funding for health centers and four eliminated health center appropriations entirely, she points out. Overall, state funding has decreased by 42 percent over the past two years, while the number of uninsured patients -- which now include more jobless middle-class Americans -- jumped 36 percent nationally from 2004 to 2009.

“Health centers have been planning to expand for 10 years,” she says, since George W. Bush’s administration led a bipartisan mandate for this growth. “Budget cuts present a significant challenge to us building capacity and workforce, but we are very resourceful, especially financially.”

Smitherman agrees. “We may not have all the resources we wanted, but we’ve already started down the road toward change, moving from a model of volume to a model of value and outcomes,” he says. “The community health-center program has been in effect since the 1950s, and that model is not going away. We don’t know how much money will be around, and I believe we will have to do more with less. But we will have a significant impact on health care for low- and middle-class populations.”

Caroline Cournoyer is GOVERNING's senior web editor.
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