Federally funded community health centers have become an integral part of many areas. As cornerstones of community-funded healthcare, they offer lower-income, housing-insecure, and rural patients affordable access to a range of services including:
- Chronic disease management
- Preventive health screening
The United States has over 14,000 service delivery sites throughout the country supported by the Health Resources & Services Administration (HRSA), which funded 1,373 community health centers and about 100 other health center program organizations. Nearly 31 million people representing underserved families and individuals — including one in five rural citizens and one in three people living in poverty —received treatment in 2021 thanks to this program, up from just over 27 million helped in 2017.
A Viable, Cost-Effective Option for Addressing Emergent Healthcare Needs
Health centers offer an agile approach to addressing the needs of the communities they serve. Their staff are trained to leverage existing networks and cultivate relationships with trusted community leaders.
- During the COVID-19 pandemic, they ensured equitable access to tests, treatments, and vaccines.
- They offer a first line of defense against the nation’s continuing opioid crisis. In fact over 285,000 patients sought substance abuse disorder services in 2021 and over 184,000 patients received medication-assisted treatment (MAT) nationwide.
- They’re helping address the mental health crisis, too, with 98% of health centers offering mental health services.
- Also in 2021, health centers saw a 34% increase — 2.7 million visits — from people seeking HIV testing.
- Some, like the North Mississippi Primary Health Care System, have opened school-based health programs, new dental clinics, and medical clinics in additional, underserved communities.
- Genesis, a North Carolina community health center, expanded its services in 2020, creating an independent foundation to help struggling families with utility bills and food.
A Change for the Better
Thanks to passage of the Affordable Care Act (ACA), community health centers received increased federal funding. The share of patients with insurance coverage expanded, and the ACA also included funding to increase center staff.
To receive federal funding and designation as a community health center, providers must:
- Offer sliding-scale fees to patients.
- Offer care regardless of patient ability to pay.
- Have oversight from a board comprised of which at least 51% are community members or patients.
- Register as a non-profit or public organization.
- Serve traditionally medically underserved populations — like low income — and/or underserved areas — like rural communities.
- Offer comprehensive health services.
- Engage in quality improvement programs or activities.
The ACA: Protecting the Health of Community Health Centers
Thanks in large part to the ACA’s insurance expansion, including the option for states to increase their Medicaid eligibility, these health centers have seen more insured patients even as the numbers of their uninsured patients decline. Medicaid has increased revenues and increased patients’ abilities to access and afford care.
Federal funding has doubled, improving health centers’ financial stability thanks to the ACA’s Community Health Center Fund (CHCF). And on August 8, 2022, the U.S. Department of Health and Human Services (HHS), through the Health Resources and Services Administration (HRSA), awarded almost $90 million to the nearly 1,400 community healthcare centers. The purpose of this funding, made possible by the American Rescue Plan, is to advance health equity through better data collection and reporting.
Additional funding that had been granted through the Families First Coronavirus Response Act (FFCRA) — requiring states to provide continuous coverage for those enrolled in Medicaid — is set to run out once the public health emergency (PHE) expires, so many community health centers have braced for significant revenue losses. Federal grants have helped offset staffing costs and support outreach.
The country’s nearly 1,400 centers also received over $6 billion in basic funding grants in 2021, with the American Rescue Plan adding another $6 billion over two years for continuing COVID care. Overall, the federal government’s annual base grant has more than doubled, from $2 billion to $6 billion between 2010 and 2021.
Spreading the Community Safety Net Wider
Some community health centers have seen their surpluses increase by 20% or more. Those surpluses come from their pharmacies. The Washington Post recently featured several federally-funded clinics whose revenues have far surpassed the industry average 5%.
The non-profit Genesis Health Care, in South Carolina, treated about 11,000 primarily low-income patients through its seven clinics in 2020 and 2021. Drug sales helped the organization net $19 million in surplus on $52 million, a 37% margin, last year. It wasn’t the first time, either. Records show the organization generating surpluses of 35% or more for four consecutive years.
The government’s $340 billion drug discount program has been a boon to this and several other community healthcare centers crediting several factors, like exceptional fiscal management, for their robust financial stability. Also, patients’ insurers — including Medicare and Medicaid — pay a higher rate to community health centers than other healthcare organizations, and the centers can keep and bank the difference.
HRSA regulates the centers but has limited authority to dictate how centers use their funds. “The expectation is they will take any profit and plow it back into the operations of the center,” said James Macrae, an associate administrator at HRSA.
They must take all patients, regardless of ability to pay, to continue receiving annual government grants and higher Medicaid/Medicare reimbursements than private doctors. Ultimately, the federal funding is awarded with the understanding that clinics will use it to meet the needs of those patients who are socioeconomically disadvantaged.
While some have expressed concern about surpluses well above the national average, center leaders have said they have plans to use those excess funds for expanding and modernizing services, constructing new buildings, and other large-scale projects, while decreasing their reliance on government funding.
Founded over 50 years ago as part of President Lyndon B. Johnson’s “War on Poverty,” community health centers will continue providing affordable, comprehensive care to medically underserved populations. These organizations currently serve more than 29 million people each year. They’re proof positive that when provided with the right resources, the care they offer especially within underserved communities:
- Improves health
- Reduces health disparities and inequities
- Generates taxpayer savings
- Addresses many expensive, significant public health and social issues (mental illness, homelessness, natural disasters, substance abuse disorders, the COVID pandemic)
Their work has been vital, providing positive outcomes for their patients and the communities they serve.
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