Health Clinics Stretch Hours and Services With New Federal Dollars

The collapse of the housing market in Loudoun County, Va., which had been a fast-growing suburb of Washington, has left many construction workers, real-estate agents, and landscapers without sufficient health insurance. A growing number of them are finding their way to the Loudoun Community Health Center, in Leesburg.

Six months ago, the organization had to create its first waiting list. New patients wait an average of four weeks for routine appointments.

But this spring the health center got a big boost in its effort to meet the new demand — two grants, totaling $1.4-million over two years, that were awarded as part of the federal economic-stimulus law.

With the new money, the Loudoun center will soon be open two additional evenings a week and Saturdays, and it plans to add three part-time employees: a doctor, a nurse, and a front-desk person.

Nearly $500-million of the $2-billion in stimulus dollars allocated for local health centers has already been awarded, with the goal of saving or creating jobs and expanding health-care services for the uninsured. The remaining $1.5-billion will go toward construction or renovation projects and health-information technology at centers that already receive federal grants.

“This money couldn’t have come at a more important time,” says Dan Hawkins, policy director at the National Association of Community Health Centers, in Bethesda, Md. “There’s not a single health center that doesn’t tell me that they have more patients coming in the door any given day than they can possibly handle.”

Quick Work

Just two weeks after the federal economic-recovery act was signed into law, the U.S. Department of Health and Human Services awarded $155-million to 126 health centers. The department was able to act so quickly because it drew from a pool of applications from a grant competition last year.

In 2008, 260 health clinics applied to become “federally qualified health centers,” but the department had only enough money to give 42 new organizations such status. In return for serving all patients, regardless of their ability to pay, clinics with the designation receive federal grants, higher Medicare and Medicaid reimbursements, free malpractice-insurance coverage, and other benefits.

Because the applications had already been reviewed and scored, the department was able to go back and award stimulus grants of up to $1.3-million apiece to the next-highest-scoring applicants.

Then, in late March, the department awarded additional grants, totaling $338-million, to 1,128 health centers in the federal program.

While the organizations had to apply for the money, the amount for which each one was eligible was determined by a formula based on the total number of patients they served in 2008 and what percentage of those patients was uninsured.

Most of the health centers applied for and received the full amounts for which they were eligible.

The next round of grants, involving approximately $850-million for capital projects, is open only to health centers that are part of the federal program. Applications are due in June, and the recipients are expected to be announced this summer.

Health centers are grateful for the new money, but some experts fear that state governments, struggling with budget problems of their own, will use the awarding of the federal funds as a reason to cut the amount of money they provide.

“The state capital looks to Washington and says, ‘Oh, they’re going to fund these guys. We can pull that money out and use it elsewhere,’” says Mr. Hawkins. “Well, that completely negates the purpose of the stimulus funding.”

Last month the National Association of Community Health Centers wrote a letter to the Department of Health and Human Services that cited examples of state legislators in Arizona, North Carolina, and Ohio noting the stimulus funds as they proposed state cuts. The association asked for the department’s help in fighting those cuts.

Funds to the Rescue

Grants awarded as part of the stimulus measure have helped some health centers stave off what would have been painful cuts in the services they provide.

Greater Baden Medical Services, in Upper Marlboro, Md., runs seven clinics, including one in rural Nanjemoy, Md., that has lost money in each of the past five years.

With the downturn in the economy, it was becoming harder and harder for Greater Baden to keep the clinic afloat. The group feared that it would have to close the location early this summer.

The $270,372 stimulus grant that the organization received doesn’t solve the troubled clinic’s problems, but it does offer a reprieve, says Justin Britanik, a program manager at Greater Baden.

“That’s going to allow us to keep the doors open and to strategize,” he says, noting that residents of Nanjemoy have few other health-care options nearby. “Hopefully, when we weather the recession, we’ll have a plan to keep operations going there.”

For other health centers, the new money offers an opportunity to both strengthen current services and invest in the future.

Over the past year, the South Central Family Health Center, in Los Angeles, has seen the number of patients in its waiting room grow steadily, especially in the past six months.

The organization is using its $302,871 grant to respond to increased demand for services to lengthen its hours and add a doctor, two physicians’ assistants, and one nurse to its staff.

But South Central received an additional grant, of $1.3-million, to expand its operations. This summer it will take over the Boyle Heights Family Health Center and a residency program there to train new doctors.

Both the Boyle Heights clinic and the residency program have been losing money. The hospital that runs the program for new doctors was thinking about ending it, and the clinic was considering limiting care to patients who have insurance.

South Central thinks that the monetary benefits of Boyle Heights’s new designation as a federally qualified health center will stabilize the finances of both the clinic and the training program.

Teaching new physicians to treat low-income people is critical, says Richard A. Veloz, chief executive of South Central. Nationwide, he says, primary-care physicians are in short supply, and community health centers struggle as they compete with larger health-care institutions to hire them.

Mr. Veloz believes that if more young doctors receive their residency training at community health centers, more will choose to spend their careers at such organizations.

If South Central can devise a way to make the residency program financially sustainable over the long term, he says, other health centers across the country will be able to copy it.

But as excited as Mr. Veloz is about the residency program and the new employees that the stimulus funds make possible, he emphasizes that South Central did not take lightly the decision to expand.

“When funding like this comes down,” he says, “we have to be very careful when we expand, because the demand is there, but many times the reimbursements for that demand aren’t.”

Challenges Ahead

Despite the influx of stimulus dollars, community health centers say they still face a challenging financial landscape.

The Manet Community Health Center, in North Quincy, Mass., received $203,851 in April, which the organization will use to add four more doctors to its staff.

It plans to apply for future rounds of stimulus funds as well. But as a result of state budget cuts in the fall, Manet had to trim its budget by more than $300,000.

The health center canceled raises for employees and reduced its spending on training, travel, and supplies.

With the Massachusetts economy still languishing, the organization is bracing for a further decrease in state aid, which the group anticipates will cost it $300,000 to $400,000 during the next fiscal year.

The resulting reductions that Manet will have to make are likely to be deeper than before, says Henry N. Tuttle, the organization’s chief executive. Once the new doctors have settled in, he expects the patient-care reimbursements that the health center receives to more than pay for their salaries.

But Manet will probably have to reduce the benefits its employees receive — which Mr. Tuttle says will make it even harder to attract and retain health-care professionals — and trim the nonreimbursable services it provides, such as nutrition education, domestic-violence counseling, and assistance in managing chronic conditions.

“We’ll have to look at what’s core and what’s ancillary and what we may have to eliminate,” he says.