Minnesota’s Community Health Centers Face a Funding Crisis

The most vulnerable Minnesotans faced a new challenge October 1st. When the previous budget expired, Congress failed to provide stable funding for community health centers (CHCs) that serve these populations. Though Congress passed a 90-day extension of funding as a temporary salve for this problem, it failed to address the massive threat to the financial viability of the safety net. Without a funding bill for 2018, Minnesota health centers face staffing cuts, or even site closures.

Approximately 70 health centers in Minnesota receive Section 330 federal funding. These clinics serve the uninsured, others serve migrant populations, and still others serve the homeless. In their role as backstops to the American health care system, CHCs provide primary care, family planning, prenatal care, substance abuse and mental health counseling, nutrition guidance, and social services to thousands of Minnesotans every year.

CHCs depend on public assistance

Community health centers rely on public programs far more than traditional health centers do. The government mandates that CHCs accept any patient regardless of ability to pay. In Minnesota, only 3% of 175,000 CHC patients earn over 200% of the federal poverty level—$49,000 for a family of four—so most of these patients qualify for public insurance options like Medical Assistance, Medicare, the Children’s Health Insurance Program (CHIP), or MinnesotaCare. According to the Health Resources and Services Administration (HRSA), only 14% of CHC patients in Minnesota have private insurance; 57% of patients have public insurance; 29% of patients have no insurance. Most community health centers face financial challenges due to a comparably small percent of patients that own commercial insurance policies.

Private insurance groups reimburse clinics at much higher rates than public insurance programs. At private practices, commercial insurance reimbursements usually cover the health centers’ costs in full.

By contrast, the government reimburses care for patients on public insurance at reduced rates that do not completely pay for the actual costs of care. To supplement the public insurance reimbursements, the federal government also gives direct grants, offers exclusive discounts on prescription drugs, and forgives loans owed by young health professionals that work in underserved communities. These programs are the lifeblood of community health centers. Without a plan to fund these programs or replace their funding, they will die.

Those programs also need to ease the pressures community health centers face when providing care for the uninsured. Federal law requires CHCs to provide care to anybody in their service area, regardless of their ability to pay. CHCs gladly take on this task, but they hardly recoup any costs from uninsured patients. Uninsured patients pay based on a sliding-fee scale that rarely exceeds $20 per visit.

Before the holidays, Congress passed a continuing resolution that included CHC grants through March. Without grant funds the average Minnesota clinic would lose 15% of revenue, but some could lose over half. Without this revenue, Minnesota’s clinics will need to make tough decisions about how they move forward. Layoffs, program cuts, and closures loom.

According to the Minnesota Association of Community Health Centers, at least eight sites would close across the state, primarily in Greater Minnesota. Some clinics would also have to lay off staff. Many have already suspended efforts to replace existing vacant positions. Physician vacancies already plague community health centers—70% of CHCs reported at least one vacancy nationwide as of two years ago. Because clinics cannot plan beyond the next few months, they cannot easily recruit (or retain) staff.

And while Minnesota already grants millions of dollars to health centers, state plans to provide stopgap funds have not materialized.

Why this matters

The stakes for patients of community health centers are high, with the health outcomes for thousands of Minnesotans in jeopardy as early as April. According to HRSA, over 6,600 CHC patients in Minnesota have asthma, 21,000 have hypertension, and 12,000 have diabetes. CHCs screen thousands of Minnesotans a year for breast cancer, hepatitis, sexually-transmitted infections, and HIV. Providers at CHCs saw patients almost 8,000 times for substance use disorders. These clinics treat victims of the opioid crisis every day. These health centers actively seek out and treat marginalized groups like migrant farm workers and the homeless—populations with no alternative source of primary care.

Community health centers are also incredibly cost effective. They reduce both costs and time spent in hospitals more effectively than other types of clinics, and even reduce expensive visits to emergency rooms. CHC patients also utilized inpatient care and specialty care less frequently, and spent fewer days in the hospital.

Congress needs to renew CHC funding before its inaction irrevocably harms the health and livelihood of Minnesotans. Health professionals, both in Minnesota and across the country, have demanded health center funding for months. Some lawmakers added their voices to this call for action as Congress hurdled past the funding cliff. Community health centers provide a cost-effective, vital service for historically underserved Minnesotans. We should all recognize that our health centers need this funding lapse addressed now, and embrace the incredible work that properly funded health centers can do.