More health clinic capacity needed

Federally Qualified Health Centers (FQHCs) – of which there are nearly 130 in the state — have long served as the safety net for California’s most vulnerable residents living in both urban and rural communities.

Yet, as we look into the future, that net is fraying.

Under current trends, low-income residents face a stark reality that includes treatment at outdated facilities, longer wait times for care, or lack of access altogether.  From kids with excessive absences falling behind in school, to illness-related loss of work hours for adults, to untreated illness becoming worse and requiring more extensive care, the lack of health care access due to this shortfall will have severe repercussions across the state.

In California, Ole Health, Lifelong Medical Care, and Axis Community Health are all models organizations at the forefront of this effort.

It is estimated that between enrollments in Covered California, expanded Medi-Cal, and the on-going needs of California’s remaining uninsured population, community clinics and health centers throughout the state will be treating 5.9 million patients annually by the end of 2016. While it is great news that more Californians will have access to medical care, there exists a huge gap in physical capacity to serve them.  If insurers begin to pull out of California health exchanges, as they have done in many other states, this problem will be exacerbated as more people will become uninsured and have no other option for their primary care needs than a health center.

In addition, FQHCs – that have long been working under a model where they are paid by the patient visit – are still figuring out how to adapt to the Affordable Care Act’s new pay-for performance regulations, where they are paid for the health outcome.

Fortunately, bright spots exist.

Addressing the manner in which facilities provide care is an important step as we all look to improve outcomes. The integrated model of care, which provides primary care, labs, pharmacy, mental health, social services, and dental care—all through the same facility and closely linked partner facilities —is proving to be a more efficient way to manage health care. Because it is more coordinated, with health providers connected and communicating more closely, patients are more likely to have their health needs addressed effectively, ultimately requiring fewer return visits and hospitalization.

In California, Ole Health, Lifelong Medical Care, and Axis Community Health are all models organizations at the forefront of this effort.

Still, additional capacity is needed to support more effective and efficient treatment approaches like integrated care at FQHCs and other community clinics. A 2013 study by the nonprofit Capital Link, found that for the state to adequately serve its residents, community clinics and health centers in the state will require an additional $2.26 billion in capital investments to upgrade and build facilities in which to treat these patients.

This is where mission-driven lenders, like Capital Impact Partners, from the Community Development Financial Institution (CDFI) sector, can play an important role.  Where traditional banks perceive risk, our experience has shown a history of strong and consistent operations, despite tighter margins. Our goal is to create social impact, and thus we find ways to provide the flexible and low-cost loans that FQHCs need to expand in these challenging economic times.

One example of this type of funding is the $20 million Healthier California Fund launched in partnership with The California Endowment.  This fund provides financing to help California’s clinics and health centers build capacity, pursue innovation in how care is delivered, and offer financial support for technical assistance.

One example of this work is our $1 million loan to Tri-City’s new Irvington Dave Clinic in Fremont. This financing helped the clinic open a new 20,000-square-foot facility, including 10 medical and 10 dental exam rooms that will serve 8,000 new patients by the end of 2017.  The facility will implement a Patient Centered Medical Home model that coordinates patient visits across medical teams, including primary care, laboratory, mental health, dental care, and radiology. Most of the patients who will use this facility live below the federal poverty line and approximately 70 percent use Medi-Cal. The surrounding community is primarily Hispanic and Asian with roughly 40 percent best served in their native languages.

We all want to ensure California’s newly covered and low income patients have access to quality care in their communities. To ensure clinics have the approach and capacity to meet this need, communities, providers, non-profits, and financial institutions will need to work together to pursue solutions. Because solutions do exist. If we do not work together to address this soon, the health and economic stakes will be high and have a negative impact on the well-being of our residents, particularly for our low-income, elderly, and communities of color.
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Ed’s Note: Scott Sporte is the chief lending officer of Capital Impact Partners,  a national, nonprofit, Community Development Financial Institution.