Stimulus Funding for Health Centers: The Right Medicine at the Right Time, But Not the Cure

stimulus report-1

To kick off National Health Center Week 2009, Michigan Primary Care Association is releasing a report showing how Michigan Community Health Centers are using stimulus dollars to expand health care services, increase accessibility to health care for more patients, and create and stimulate jobs. Click here to download this report in its entirety.

As the cost of health care continues to increase and more and more Americans are losing their jobs and losing health care coverage, the need for affordable quality health care is more pressing than ever before. In Michigan, the number of uninsured now tops 1 million, and over 1.5 million residents lack a health care home. In June 2009, the state’s unemployment rate hit 15.2% (Michigan Department of Labor and Economic Growth). For every 1% increase in unemployment, more than 1 million people lose their health insurance and another million people enroll in Medicaid and SCHIP (George Washington University School of Public Health and Health Services).

To help those in need access quality health care that they can afford, where they need it, and when they need it, the federal government is making a one-time investment of $2 billion in American Recovery and Reinvestment Act funding in Community Health Centers (CHCs) over the next two years (2009-2010). This will enable 1,129 CHCs in 50 states—including 29 CHCs in Michigan—and eight territories to provide expanded service (

Community Health Centers were among the first recipients of stimulus funding through the American Recovery and Reinvestment Act (ARRA).

In March 2009, President Obama announced $155 million in one-time New Access Point (NAP) funding to establish 126 new Health Center sites that will help provide health care to an estimated 750,000 low-income Americans. Two Michigan Community Health Centers—Ingham County Community Health Centers (Lansing) and Western Wayne Family Health Centers (Inkster)—received a total of $2.6 million to provide care for an additional 13,890 patients and protect 105 jobs.

Also in March 2009, the U.S. Health Resources and Services Administration (HRSA) released $338 million in Increased Demand for Services (IDS) grants to enable CHCs to provide quality care to an additional 2.1 million patients over the next two years. Michigan’s 29 CHCs received over $8.5 million of this one-time funding to serve an additional 53,749 new patients (including 27,621 new uninsured patients), retain or stimulate 152 jobs, and meet the significant increase in demand for primary health care services among uninsured and underserved populations.

In June 2009, HRSA released $851 million in Capital Improvement Program (CIP) funding to CHCs nationwide, including over $23.5 million to 29 Michigan CHCs. This one-time funding addresses immediate and pressing Health Center facility and equipment needs and increases access to health care for millions of Americans. It supports the construction, repair, and renovation of over 1,500 CHC sites across the country, as well as equipment purchases and the acquisition of health information technology systems.

On August 6, CHCs submitted grant proposals for a new Facility Investment Program (FIP) funding opportunity through ARRA. This one-time funding through competitive grants totaling $515 million will address major facility improvement needs in Health Centers that will increase access to health services for underserved populations and create CHC and construction-related jobs.

Stimulus funding for Community Health Centers was undoubtedly the right medicine at the right time. The investment allowed CHCs to quickly begin responding to increased demand for health care from people who are unemployed, uninsured, or underinsured in today’s economic crisis. As of July 2009, Michigan CHCs have received a total of nearly $35 million through three rounds of ARRA funding. This will enable the Health Centers to provide care to 67,639 additional patients (27,621 uninsured) and create / stimulate 257 jobs. Success stories beginning on page 5 detail how each Michigan CHC is using this funding to benefit individuals and the communities it serves.

Although the stimulus funding was the right medicine at the right time, it wasn’t the cure. The cure is health care reform. A long-term solution is needed for the 50 million Americans who are uninsured, and also for the 60 million people who lack a medical home. Stimulus funding is the first step in laying the foundation required to serve communities and vulnerable people for years to come. Since stimulus funding is one-time funding (the federal government will not provide ongoing support of stimulus-funded grant activities after the end of the two-year project period), ongoing funding is now needed to sustain, strengthen, and build on that foundation.

Comprehensive health reform is urgently needed to assure high-quality, cost-effective health care for all, particularly as the recession lingers and demand for services continues to increase. Whatever its final shape, health reform must ensure that people are free to choose Community Health Centers as their health care homes, that CHCs are adequately reimbursed for their services, and that CHCs have the workforce, financing, and other tools needed to expand their reach and provide quality care that is accessible to all. As President Obama said in his announcement of the New Access Point funding in March 2009, “Health centers, primary care and prevention are at the heart of my plan for an affordable, accessible health care system.”

Today, Community Health Centers are health care homes for more than 20 million people across the United States—including nearly half a million Michigan residents—at locations in more than 7,500 communities. They provide comprehensive primary and preventive health care; mental health, substance abuse, oral health, and pharmacy services; and enabling services (e.g., translation, transportation, culturally sensitive health care) that promote access to health care. All of this is available for everyone in the community in all stages of the life cycle, regardless of ability to pay or insurance status. Patients are charged for services on a sliding-fee scale that is based on family size and income.

For over 40 years, the Community Health Centers program has received broad bi-partisan support because it consistently delivers results in the critically important areas of access, quality, and cost (National Association of Community Health Centers).

A study conducted by the Institute for Health Care Studies at Michigan State University unequivocally demonstrated that Medicaid beneficiaries using CHCs cost the state less money. The report showed an overall savings to Medicaid of $44.87 per member per month when comparing Medicaid recipients cared for in CHCs to those cared for elsewhere, for a total savings of $42,009,580 to the State of Michigan in 2007. These savings are likely attributed to prevention, chronic disease management, reduced pharmaceutical costs, and reduced emergency room utilization.

Community Health Centers stand ready to do more—to fill the void for the uninsured and medically disenfranchised.


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