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Report Analyzes Effect of ‘Sequestration’ on Community Health Centers

Nation’s CHCs at risk of losing $120 million in grant funding, reducing visit capacity by 3 million (Mar. 4)

A new report from the George Washington University School of Public Health and Health Services in Washington, D.C., examines the potential financial impact of so-called “sequestration” on community health centers (CHCs) and their patients and communities. The report estimates that the nation’s 1,200 federally funded CHCs will lose $120 million in grant funding, and that this funding drop can be expected to translate into 900,000 fewer patients served and 3 million fewer visits.

In addition, the authors find that because of its timing, the impact of sequestration will be concentrated in the second half of fiscal year 2013, thereby necessitating dramatic and immediate program reductions that in turn will affect the local economies in which CFCs operate.

“Given whom health centers serve and where they are located, it is not surprising that our findings reveal that the funding reductions will hit the most vulnerable patients the hardest,” said lead author Peter Shin, PhD, MPH.

Sequestration is expected to affect all 8,500 CHC locations. The personnel and service cuts needed to absorb $120 million in grant funding losses can be expected to result in an additional loss of $230 million in third-party insurance revenues needed to support operations, the report claims. Among the 900,000 patients losing access to CHCs:

  • 72% will have family incomes below the federal poverty level (FPL); virtually all will have family incomes below twice the FPL.
  • 32% will be children under the age of 18 years.
  • 57% will be members of racial/ethnic minority populations.
  • 26% will be residents of the Southeastern and South Central states, where poverty is the deepest and Medicaid coverage of poor adults is the most limited.
  • 52% will have two or more chronic health conditions.

Sources: George Washington University; March 4, 2013; and Policy Research Brief; March 4, 2013.

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