Community Health Centers Providing Return On Investment

A hefty infusion of cash for community health centers in last year’s federal stimulus package may be paying off.

A new study, released Tuesday, just before the first anniversary of the stimulus package becoming law, found that $1.85 billion the federal government gave to clinics under the American Recovery and Reinvestment Act of 2009 has generated $3.2 billion in economic activity.

The research was done by the George Washington University Department of Health Policy along with the RCHN Community Health Foundation and the United Health Foundation.

Although large portions of the money awarded through the stimulus legislation have proven to be controversial–including increased spending on green energy technology, high speed railways, mass transit and direct cash payments to Social Security beneficiaries–the early sign of success in funding of health clinics isn’t altogether surprising.

And although many Republicans say the stimulus has failed to save or create the number of jobs Americans were promised, both parties basically agree that an expansion of the community health center model was a good way to provide care for the uninsured. Sen. Mike Enzi, R-Wyo., even called such centers “absolutely critical” on the Senate floor in December. Even before the recession, President George W. Bush doubled funding for the centers and provided money for the creation or expansion of 1,297 clinics in 2008.

Today, the centers provide a safety net of health care for much of America’s poor at a subsidized rate by targeting care to places with higher poverty and unemployment rates and fewer numbers of care providers.

The National Association of Community Health Centers says the stimulus money has funded care for 1.6 million more people, including 900,000 uninsured, at 1,100 centers around the country. Visits by the uninsured to health centers rose 21 percent last year, NACHC says. Centers in California alone are expected to serve more than 380,000 new patients through 2011, according to Capital Link, which provided modeling for the study.

The $3.2 billion in economic activity the researchers cite comes from expanding operations of the centers and creating more jobs there via hiring additional care providers and support staff.

Researchers say the clinics’ stimulus funding shows that the clinics are able to quickly turn funding into new services and additional jobs. Federal funds given to health centers, however, used to provide a “nearly four-fold return on investment,” but higher unemployment and a sluggish economy has caused a lower rate of return this time around, the researchers write.

Still, such returns could well raise support for funding the clinics. The president’s new budget would provide $290 million in sustaining funding for the centers that would otherwise expire after the one-time infusion of stimulus cash.