Access to Care and the Economic Impact of Community Health

Centers

The Robert Graham Center

National Congress on the Un and Underinsured

Monday, December 10, 2007

3:30 - 4:30

Community Health Centers

What are health centers?

Whom do they serve?

How do health centers overcome barriers to care?

How do health centers make a difference?

Why is investing in health centers important?

Health Centers: History and Purpose Founded in 1965, through civil rights & war on

poverty movements to address needs of poor & minorities

Two-fold purpose – Be Agents of Care in areas with too little of same Be Agents of Change, giving communities a role

Today: 1150 Health Center organizations Located in every state and territory More than 6,300 health care delivery sites, 600 of

them school-based, plus additional mobile clinic, shelter, and labor camp sites

Health Centers Today

Health care home for over 17 million Americans 1 of 5 Low-income Uninsured Persons

1 of 8 Medicaid/CHIP Recipients

1 of 4 Low-Income, Minority Individuals

1 of 5 Low-Income, Uninsured Individuals

1 of 9 Rural Americans

923,400 Farmworkers, 940,000 Homeless Persons

Overcoming Barriers to Care Key features of health centers:

Location in high-need areas Open to everyone regardless of ability to pay Offer comprehensive health and related services

(especially ‘enabling’ services)

Tailor services to meet specific community needs (HIV, mental health, linguistic/cultural appropriateness)

Governed by community boards, to assure responsiveness to local needs

How Health Centers Make a Difference

Independent evaluations of centers find: Excellent Quality of Care: More Effective Care, Better

Use of Preventive Care, Fewer Infant Deaths Major Impact on Minority Health: Significant

Reductions in Disparities for Health Outcomes, Receipt of Preventive and Condition-Related Care

Higher Cost-Effectiveness: Lower Overall Costs, Lower Specialty Referrals and Hospital Admissions, Substantial Medicaid Savings

Significant Community Impact: Employment and Economic Effects, Contribution to Community Well-Being, Development of Community Leaders

The Access for All America Plan

Grow health centers program to serve 30 million people by 2015 by – Developing new CHC sites and expanding existing

sites Funding every health center for oral and mental

health, and for pharmacy services Increasing workforce training programs (especially

NHSC) to build primary care workforce for all Increasing support for new facilities, equipment, HIT,

and quality/performance improvement Maintaining Medicaid and SCHIP coverage, and

expanding it wherever possible

Who and How Many Need Care Americans of all income levels, race and

ethnicity, and insurance status have inadequate access to a primary care

physician

56 million Americas are “medically disenfranchised”

No Usual Source of Care Nearly 1 in 5 (19.3%) Americans (55.5 million people)

reported lacking a Usual Source of Care –same as our medically disenfranchised number;

Of those without a USC, 32% are uninsured and 21% are low income;

52% of all uninsured people under 65 years of age have no USC;

Nearly a quarter (24%) of all poor or near-poor are without a USC; and

32% of all Hispanic or Latino Americans have no USC

23% of all Black,non-Hispanic people have no USC

Source: 2004 Medical Expenditure Panel Survey

40% or greater

20 - 39.9%

19.9 -10%

Less than 9.9%

Map 1Percent of Medically Disenfranchised By

State, 2005

DC

National Average = 19.4%Note: Does not subtract health center patients as state and U.S. medically disenfranchised figures do.Source: The Robert Graham Center. 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.

DE

No State is Immune

21 States each have more than one million medically disenfranchised residents.

Florida, Texas, and California together make up 29% of the 56 million

2 in 5 residents in nine states have threatened or limited access to basic health care.

55.9% of Alabama residents are medically disenfranchised.

The Primary Care Payoff

American currently spends $2 trillion health care.

Health centers generate substantial savings

Americans could potentially save the health care system $67 billion.

CHCs and Hospitalizations

Average annual cost reduction of $1,810 (median reduction ($959) = 41% reduction

Average annual cost reduction for Medicaid $996

(median reduction $399)

Source: 2004 Medical Expenditure Panel Survey

CHCs and ED visits

For Medicaid beneficiaries, 35.5% relative reduction in ED visits

37% reduction for Blacks

CHCs may facilitate more appropriate ED use for uninsured and poor

Source: 2004 Medical Expenditure Panel Survey

Health Center Savings

Health Centers generate between $9.9 and $17.6 billion.

By 2015, health centers would generate at least $22.6 billion, and as much as $40.4 billion.

Health Center Economic Benefits

Impact on predominantly low-income communities served:Health center spending that flows to/through

communitiesEmployment of local residentsBusinesses in community that benefit from

health center’s presence (directly and indirectly)

Methods

IMPLAN (Impact analysis for PLANning) – complete economic planning tool.

IMPLAN’s output, earnings, and employment figures are aggregated based on the following:Direct effects Indirect effects Induced effects

Table 1Total Economic Activity Stimulated by Federally-Funded Community

Health Centers’ Operations, 2005

Total Economic Impact Employment (Full Time Equivalents)

Direct $7,261,975,096 89,922

Indirect $1,124,387,922 10,233

Induced $4,172,328,893 42,918

Total $12,558,691,911 143,073Note: Total Economic Impact includes Value-Added Impact. For an explanation, see Appendix B. Payroll (Value-

Added), estimated at 73% of Operating Expenditures, is based on Capital Link’s financial database Fiscal Year 2005 median value for health centers nationally. Each Full Time Equivalent (FTE) denotes one full time employee. Total FTEs denote total workforce generated by health centers. For the definition of FTE, see Appendix B.

Source: Capital Link, Inc with MIG, Inc. IMPLAN Software Pro version 2.0.1025 and 2004 structural matrices with the 2002 state level multipliers. Direct CHC Operating Expenditures derived from Bureau of Primary Health Care, HRSA, DHHS, 2005 Uniform Data System.

Table 2Total Economic Activity Stimulated by an Average Large Urban and

Small Rural Health Center, 2005

Large Urban Health Center Small Rural Health Center

Total Economic Impact

Employment (Full Time

Equivalents)

Total Economic Impact

Employment (Full Time

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

Note: Total Economic Impact includes Value-Added Impact. For an explanation, see Appendix B. Actual health center with an annual budget of $12.3 million (large) and $3.3 million (small), based on Capital Link’s financial information database. Each Full Time Equivalent (FTE) denotes one full time employee. Total FTEs denote total workforce generated by health centers. For the definition of FTE, see Appendix B.

Source: Capital Link, Inc with MIG, Inc. IMPLAN Software Pro version 2.0.1025 and 2004 structural matrices with 2004 county level multiplier. Direct CHC Operating Expenditures derived from Fiscal Year 2005 audited financial statements.

Table 3Health Center Economic Impact by State, 2005

Alabama $ 121,382,364 Kentucky $ 145,069,297 North Dakota $ 14,662,971

Alaska $ 144,528,348 Louisiana $ 78,432,187 Ohio $ 232,736,644

Arizona $ 286,830,888 Maine $ 95,132,259 Oklahoma $ 59,581,749

Arkansas $ 78,795,465 Maryland $ 201,502,347 Oregon $ 292,735,806

California $2,037,609,155 Massachusetts $ 610,958,760 Pennsylvania $ 337,934,781

Colorado $ 373,364,151 Michigan $ 323,832,254 Rhode Island $ 67,410,498

Connecticut $ 199,959,243 Minnesota $ 127,925,653 South Carolina $ 201,023,876

Delaware $ 15,092,736 Mississippi $ 148,879,146 South Dakota $ 33,223,901

District of Columbia $ 71,586,512 Missouri $ 278,798,343 Tennessee $ 171,825,379

Florida $ 537,168,777 Montana $ 44,619,157 Texas $ 560,203,991

Georgia $ 163,682,141 Nebraska $ 34,274,030 Utah $ 60,401,822

Hawaii $ 117,206,087 Nevada $ 33,600,556 Vermont $ 34,069,199

Idaho $ 64,286,155 New Hampshire $ 59,285,597 Virginia $ 143,116,890

Illinois $ 658,087,959 New Jersey $ 225,955,243 Washington $ 610,452,536

Indiana $ 123,745,679 New Mexico $ 192,466,789 West Virginia $ 294,209,387

Iowa $ 77,082,402 New York $ 1,143,732,348 Wisconsin $ 229,500,072

Kansas $ 35,089,879 North Carolina $ 203,433,165 Wyoming $ 18,383,772

United States $ 12,558,691,991Source: NACHC, Access Granted: The

Primary Care Payoff, 2007 www.nachc.com/research

Future Impact Federally qualified health centers could

serve 30 million patients by 2015.

The estimated operating expenditures is $23.5 billion.

Projected expenditures - an estimated total economic impact of $40.7 billion.

Creating more than 460,000 full time equivalent jobs in 2015.

Challenges Ahead

Expansion Investment Workforce

For More InformationContact:

Dan Hawkinsdhawkins@nachc.com

Bob Phillipsbphillips@aafp.org

Falayi Adufadu@caplink.org

View Both Access Denied and Access Granted at: www.nachc.com/research