Community Health Centers:The Foundation of Community Economic

Health

Healthy Communities: The Intersection of Community Development and Health

Sept. 28, 2011 Federal Reserve Bank of Dallas

What Are Community Health Centers?

• Primary care medical clinic• Located in low income areas – urban

and rural• Small federal operating grant• Delivers care regardless of patient’s

ability to pay.• High number of uninsured and

Medicaid.• It’s a doctor’s office! But more.

Services Provided by CHCs

• Individual and family medical care• OB/GYN services• Pre-natal care • Dental Services• Behavioral Health• Optometry

Outcomes and Costs?• Patient mix much higher for at-risk

individuals• Yet, health outcomes are significantly

better than private providers.• And, cost of services significantly

lower than private providers. • ER diversion is critical in some

communities. • Moreover…a whopping 22% better

outcomes on prevention!

© HealthChange, LLC 2004-2005

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Genetics Environment Behavior Care

20% 20%

50%

10%

What Creates Wellness?

Economic Impact

% of GDP0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

3% 6%

15%

25%

1900 1964 1994 2020

National Impact of Healthcare

7

Community Impact

• Tend to be the largest employer in the urban community.

• Create the foundation for a healthy workforce

• Are community activists for safe environment (traffic and general safety)

• Often, especially in urban areas, their building projects provide the largest economic impact in the community’s history.

Examples from Massachusetts

• Lowell CHC - $40 million expansion

• Fenway CHC - $65 million new facility

• Mattapan CHC- $32 million new facility

• Whittier Street CHC - $37 million new facility

• 350 – 450 staff members

Texas Association of Community Health Centers

• Worked with many CHCs individually in Texas on capital projects – two currently

• TACHC (Daniel Diaz) have provided educational seminars on business planning and grant applications

• Did a financial trends analysis for TACHC and 50 CHCs

Banks and CHC’s• Community Reinvestment Act –

perfect• Use of New Market Tax Credits –

perfect• Market analysis• Economic impact analysis• Financial trends analysis • Loans typically only 30% of total

project costs!• Typical debt service coverage ratio:

above 2.0

Health Care in the U.S.

• CHCs are on the front line of health care

• 49.9 million American’s are uninsured• 44% of all Americans are under-

insured (still can’t pay for health care)• What’s to come?

MedicaidMedicare

Social Security, Medicare & MedicaidOutlays as a Percentage of GDP 1990-2075

1990 2000 2010 2020 2030 2040 2050 2060 20700

4

8

12

16

20

24 Social Security

13

Source: C. Eugene Steurle and Adam Carasso, (Budget Crisis at the Door), The Urban Institute, 2003. Based on data from the Congressional Budget Office, “A 125-Year Picture of the Federal Government’s Share of the Economy, 1950-2075,” July 3, 2002, table 2.

Federal Receipts vs. Entitlement Spending

1970

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12034

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0

2

4

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22

Baseline SS, Medicare, and Medicaid

Baseline receipts (includes JGTRRA)

Return to 2002

Continue at same rate

14Source: C. Eugene Steurle and Adam Carasso, (Budget Crisis at the Door), The Urban Institute, 2003 Based on data from Budget of the U.S. Government, FY 2004 and CBO’s “Analysis of the President’s Budget, FY 2004.”

(As percent of GDP)

International Monetary Fund Determined that the U.S.

must increase taxes by 60% or

Reduce Medicare, Medicaid and Social Security Benefits by 50%

CHCs on The Front Line

• The most cost effective source of health care in the U.S.

• The most “health effective”• The most effective source of preventative

care.• And yet, they are on the front line against

highest risk and lowest economic cohort of Americans.

• The future capability of America’s health care system may largely depend on its CHCs

• As well may the economic sustainability of thousands of urban and rural communities.

Terry GlasscockCapital Link, Inc

tglasscock@caplink.org781-789-6847